Patient Profile: A 69-year-old female with Type 2 Diabetes.
Annual Health Events:
- Routine Care: 4 Primary Care visits, 4 Specialist (Endocrinologist) visits, 4 Podiatrist visits.
- Supplies: Covered diabetic testing supplies and insulin.
- Major Event: A foot ulcer becomes infected, leading to:
- A 7-day Inpatient Hospital Stay
- A 14-day Skilled Nursing Facility (SNF) Stay for wound care/rehabilitation.
Cost Category
Option 1:
The Lower Monthly Bill
Medicare Advantage (MA) Plan
Option 2:
The Higher Monthly Bill
Original Medicare + Medigap Plan G
Part 1: Monthly Premiums (The upfront cost)
| Cost | Medicare Advantage (MA) | Original Medicare + Medigap G |
|---|---|---|
| Part B Premium (Standard Rate) | $185.00/month | $185.00/month |
| Plan Premium | $0 (Common for MA plans) | $146.35 (Medigap Plan G average) |
| Part D Drug Plan (Average Premium) | $0 (Usually included in MA plans) | $46.50 (Separate Part D plan) |
| Total Monthly Premium | $185.00 | $377.85 |
| Total Annual Premium | $2,220.00 | $4,534.20 |
The MA plan starts the year $2,314.20 cheaper in premiums.
Part 2: Out-of-Pocket Costs (The surprise costs)
This section calculates the out-of-pocket costs from the yearly health events.
| Service | MA Plan (Copays/Coinsurance) | Original Medicare + Medigap G |
|---|---|---|
| Routine Care (12 Total Visits) | 12 visits × $30 Copay (Avg.) | All covered by Medigap (after Part B deductible). |
| Part B Annual Deductible ($257) | Covered by the first few copays/services. | Covered by Medigap Plan G. |
| Inpatient Hospital Stay (7 Days) | 7 days × $300 Daily Copay (Avg.) | $0 (Medigap covers the $1,676 Part A deductible). |
| Skilled Nursing Facility (14 Days) | 14 days × $20 Daily Copay (Avg.) | $0 (Days 1-20 are $0 for all plans). |
| Wound Care/DME/Diabetic Supplies (20% Part B cost) | 20% of the cost until the annual maximum is hit (est. $500 for this scenario). | $0 (Medigap Plan G covers the 20% coinsurance). |
| Insulin ($35 Cap) | $420 (12 months × $35 cap) | $420 (12 months × $35 cap) |
| Total Out-of-Pocket Service Costs | $3,400 | $420 |
Part 3: The Final Annual Cost Comparison
| Cost Category | Medicare Advantage (MA) | Original Medicare + Medigap G |
|---|---|---|
| Annual Premiums (From Part 1) | $2,220.00 | $4,534.20 |
| Annual Service Costs (From Part 2) | $3,400.00 | $420.00 |
| Total Estimated Cost for the Year | $5,620.00 | $4,954.20 |
| DIFFERENCE | MA Patient Paid $665.80 MORE | |
The Trade-Off
This scenario illustrates that the patient who chose the plan with the higher monthly premium (Original Medicare + Medigap) ended the year with a lower total cost because the Medigap plan covered almost all major out-of-pocket expenses.
- Medicare Advantage: Low monthly payment is attractive, but the $300/day hospital copay and service copays quickly made the annual cost higher.
- Original Medicare + Medigap G: High monthly payment is a burden, but it acted like a total protection plan, ensuring the patient’s out-of-pocket costs for all major medical services were $0 when the hospital stay occurred.
