Why The Lowest Cost Health Plan May Not Be The Best Choice

Oct 9, 2021

When it comes to Original Medicare (Part A and Part B), it doesn’t cover much. The gaps in coverage left by enrolling in only basic Medicare coverage can lead to significant out-of-pocket costs. Because of the gaps in coverage, many beneficiaries choose to enroll in a Medicare Advantage or Medicare Supplement plan to fill in those gaps.

However, a common mistake many individuals make is choosing a plan based solely on the monthly cost. While a low monthly premium may sound enticing, it might actually cost you more in the long run. The reason? The monthly premium is only one of many costs to consider when choosing additional Medicare coverage.

Before enrolling in the cheapest Medicare Advantage or Medicare Supplement plan, consider all costs and benefits to ensure you are actually saving in the long run. Keep reading to see what you should look at before enrolling in a plan.

Overall Cost

Before enrolling in any plan you should always look at the total costs associated with the plan. Here are a few questions to consider when reviewing a plans overall cost:

  • Does this plan have a copay?
  • How much will it cost for doctor visits, specialist, and urgent care visits?
  • Does the plan have a deductible?
  • What is the maximum out of pocket cost?
  • Will I have to pay for extra benefits like prescription drug coverage, vision, dental, etc?

As you can see there are more costs to consider other than the monthly premium amount. When it comes to choosing a plan there is no one size fits all even when it comes to cost. For example, your health situation may require you to see specialists a few times a month. You enrolled in a plan with no monthly premium but soon realize you are on the hook for a $50 copay for each time you see a specialist. The zero dollar premium is quickly replaced with a high monthly co-pay amount. A plan with a moderate monthly premium amount and no copay might have been a better choice for your situation. While another beneficiary who rarely visits the doctor and doesn’t require a lot of medical attention may benefit from a lower monthly premium plan.


Another area often overlooked when choosing a health plan, is the plan’s details. What’s allowed and what’s not? Enrolling in a plan without knowing the coverage rules may end up costing you in the long run through unexpected out of pocket costs. When choosing a health plan consider the following:

  • Does this plan allow me to use my regular doctor, pharmacy, or hospital?
  • Will I need a referral if I have to see a specialist?
  • Can I easily change plans if my current plan no longer suits my needs?
  • Am I covered while traveling?

Extra Benefits

Finally, consider the extra benefits provided by the plan. Does the low cost plan provide any benefits you regularly use like:

  • Dental
  • Vision
  • Hearing
  • Prescription drug coverage
  • Coverage while traveling

If not, consider the amount you are paying out-of-pocket monthly for these services. If you regularly see the dentist or optometrist it may be wise to enroll in a plan that includes these benefits. Or if you are a snowbird and live in another state part of the year, you may benefit from a plan that doesn’t have network restrictions.

Bottom Line

Choosing a plan with the lowest monthly premium without considering the overall costs, restrictions, and extra benefits can leave you paying more in the long run if the plan doesn’t hit all your needs. There is no one-size-fits-all when it comes to Medicare coverage, so it’s important to compare all your coverage options before enrolling in a plan to ensure you receive the best coverage for your health and financial needs.

Interested in a Medicare Savings Account?

Speak with a qualified and licensed Independent Insurance Agent in your area to discuss whether an MSA plan is right for you. All consultations are FREE with no obligation.

Oct 9, 2021 | | 0 comments


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