Out of pocket Maximums

stop and do the math: part 1

   Once upon a time, there was a husband and wife who, upon retirement at 65, signed up for $0 premium Medicare Advantage plans. For several years they remained in good health, neither having to stay at length in a hospital.
Meanwhile, several of their acquaintances who had retired around the same time had opted to sign up for higher premium Medicare Supplements, paying per person, an average of $175/month. They too remained in good health for many years.
    Eight years later, the wife in our couple scenario became ill and was in and out of the hospital several times throughout the year. They ended up hitting their out of pocket maximum of $3600.
    When they found out that an old acquaintance had also been in and out of the hospital, but all of her bills had been taken care of because she had been on a Medicare Supplement, the couple was furious. Why hadn’t they been on a Medicare Supplement?
     Now, it’s time to stop and do the math for this particular scenario:
The couple who hit an out of pocket maximum of $3600 one time in eight years (and let's not forget they also probably had a few small co-pays here and there each year) did not pay anywhere near what the customer on the Medicare Supplement paid throughout that same time. $175/mo  = $2100/yr  x 8yrs = $16,800. And if she had a spouse on the same supplement plan, together they would have paid out $33,600 in eight years!
    Now who is coming out on the better end of the deal? 
    The trouble with using hypothetical situations is, of course, that every person’s situation is unique. However, by thinking through some of these scenarios, having the facts, and paying attention to all of the details of your plan, you can make the best decision for you!