As Medicare open enrollment looms, we here at the Blog have a very important question for you: Are you among the thousands enrolling in Medicare for the very first time?
If so, then you have a key choice to make, one whose implications can affect all the years of your retirement. What’s more, you only have a short window in which to get it right. The choice is whether to enroll in a Medicare Advantage plan or stick with traditional Medicare and add a supplemental policy, referred to as a Medigap plan.
This week here on the Blog, we’re beginning our fall focus on Medicare in preparation for open enrollment. If you’ve been paying attention, you already know that Medicare Advantage plans get all the marketing attention. That’s why MA plans are currently the choice of over half of all Medicare enrollees – 55 percent, to be precise. However, as this article from Yahoo Finance emphasizes, the popular choice is not necessarily the right choice.
More Than 1 Million First-Time Enrollees This Fall
Published reports remind us that tens of thousands of Americans will become Medicare-eligible every month as the baby boomers grow older. While it’s impossible to get an accurate number based solely on age, estimates are that more than one million people will be eligible for Medicare for the first time during this fall’s open enrollment period lasting from October 15th through December 7th.
As the Yahoo Finance article observes, most will probably choose Medicare Advantage – but if they do, they’re choosing short term gain and risking long-term pain. Reporter Ian Cooper wrote the article, which first appeared last May. (We’ve done our best to update his 2026 article with 2027 statistics where needed.) Cooper’s unabashed recommendation: first-time enrollees are far better off choosing a Medigap plan, specifically Plan G, than Medicare Advantage.
Let’s consider Cooper’s arguments and see if they hold up.
The Lure of Low Premiums Leads Many to the Wrong Choice
“You turn 65 next month,” Cooper begins. “The Medicare mailers are stacking up. And a friendly broker just told you that you can get a Medicare Advantage plan for about $14 a month. Meanwhile, a Medigap Plan G will cost you closer to $200.”
On paper, Cooper acknowledges, the Medicare Advantage is the better choice. It certainly appears cheaper. However, he adds, surface appearances are deceiving.
“The math changes once you actually get sick,” Cooper warns.
Medicare Choice: A New Retiree’s “Single Biggest Financial Decision”
Cooper is unambiguous in his opinion. “This is the single biggest financial decision most new retirees make in their first year of Medicare,” he writes, “and the default choice (cheapest premium) is often the wrong one.”
It’s also a choice that’s often impossible (or very costly) to undo, because of the rules governing Medicare.
In Cooper’s scenario, he envisions a healthy 65-year-old enrolling for the first time. He has a basic choice: stick with Original Medicare and add Medigap Plan G (Cooper’s recommendation) plus a standalone Part D drug plan, or choose the all-in-one Medicare Advantage plan.
“The trap,” says Cooper, “is that the cheaper option today can become far more expensive the year you get a cancer diagnosis or need a hip replacement.”
Premium Savings Today, but Costly Exposure Later
In Cooper’s illustration, our hypothetical new enrollee has to choose between a $14 per month Medicare Advantage plan (the 2026 average premium) and Medigap Plan G, for which Cooper estimates a premium of $180 to $250 per month.
“Choosing Advantage saves a healthy retiree roughly $2,000 a year in premiums compared with Plan G,” he notes. But a health episode can come with a hefty cost penalty.
“An in-network bad year can cost $9,350 out of pocket [$9,850 in 2027], and serious illness involving out-of-network specialists can push that to $14,000 [$14,800 in 2027]. With Plan G, after the $283 Part B deductible, your covered-service exposure for the year is essentially zero.”
That predictability matters, says Cooper, because stubborn inflation plus declining savings rates mean less cash available for emergencies. “Fixed-income retirees have less cushion to absorb a $9,000 surprise medical bill,” he notes.
Five Reasons Why Medigap Plan G is the Better Choice for Most Retirees
Cooper outlines what he says are the five aspects of this choice that clearly tip the scales in favor of the Medigap Plan. We’ve edited his words slightly due to space constraints.
Predictable out-of-pocket costs. “Medigap Plan G covers nearly all out-of-pocket costs in Original Medicare,” says Cooper, “after you pay the annual Part B deductible [$283 in 2026, rising to $292 or more in 2027].” Cooper reminds us that original Medicare alone does not cap annual out-of-pocket costs. He adds that Plan G does provide valuable protection as a “wraparound policy.” (We would add that Medicare Advantage plans are legally required to provide an out-of-pocket cap.)
National provider access. This is a major point of difference, Cooper writes. “Original Medicare plus Plan G is accepted by roughly 98 percent of physicians nationwide,” he says. “Advantage plans rely on narrow regional networks, a real problem for snowbirds, frequent travelers, or anyone seeking a top specialist in another state.”:
No prior authorization gatekeeping. Many policy holders who have lower-cost Medicare Advantage HMO plans complain about delays in referrals and prior authorization. “Original Medicare does not require prior authorization for most services,” Cooper explains. “Advantage plans require prior authorization for many services, and denials and delays are a documented friction point during serious illness.”
Plan stability. The availability of specific Medicare Advantage plans in various markets fluctuates from year to year, causing turmoil for providers and policy-holders. This degree of market upheaval forced an estimated ten percent of all Medicare Advantage customers to find new coverage for 2026, according to a study by Johns Hopkins University. By contrast, says Cooper, Medigap policies are standardized by law, which usually leaves core benefits mostly unchanged year after year.
Limited opportunity to enroll. First-time Medicare enrollees need to understand this one more clearly, we think, and Cooper certainly agrees. “You have a 6-month initial enrollment window at 65 when insurers must sell you Medigap with no health questions,” he stresses. “After that, switching from Advantage back to Medigap typically requires medical underwriting, and an insurer can deny you outright based on conditions you have developed since.” At the very least you’ll almost certainly pay a higher premium once the 6-month initial enrollment window closes.
Can Medicare Advantage Still Work for Some Retirees
As Cooper closes out his Yahoo Finance article, he backs off on his strident tone – just a bit.
“Medicare Advantage is not universally a bad choice,” he states. “A healthy retiree who lives full-time in a metro area with strong in-network hospitals, takes few prescriptions, values bundled dental and vision perks, and has the cash flow to absorb a worst-case out-of-pocket year can do well in MA.”
The bottom line, Cooper says comes down to this: How confident are you in your future health? Could your budget absorb a $9,000 medical expense? And, we would add, doesn’t it make better sense to choose the coverage that lets you see the vast majority of doctors and specialists without worrying about whether or not they’re “in network”?
“The cheapest move you will ever make in Medicare,” says Cooper, “is buying Plan G during your initial enrollment window, because that is the only time an insurer cannot refuse you for health reasons.” Even though Medigap Plan G costs roughly $170 a month more than the average MA plan, the risk of spending $9,000-plus in a bad health year makes the choice clear.
“The math,” Cooper states, “is not close.”
Rajiv Nagaich – Your Retirement Planning Coach and Guide
Rajiv Nagaich’s newest program on PBS, called Designing Your Ideal Future, is bringing Rajiv’s powerful message to Americans from coast to coast. This engaging and challenging PBS show is prompting thousands to take a fresh look at the type of planning that will help them succeed in retirement.
In this one-hour PBS special, Rajiv Nagaich takes viewers step-by-step through the principles of creating a retirement plan that truly supports the life you want to live. Instead of generic check-the-box paperwork, Rajiv reveals how to infuse your perspective — your values, goals, and priorities — into every legal document and life plan component so your plan becomes a living system for your future.
Designing Your Ideal Future includes insights from real-world planning examples and a live Q&A with Rajiv Nagaich that answers viewer questions about retirement planning, legal readiness, and family communication. It’s perfect for anyone approaching retirement, currently retired, or responsible for a loved one’s future care — and for those who want a clear, effective approach to planning that prioritizes personal choice and quality of life.
What About You?
You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then these materials are your key to retirement success.
Visit your local PBS station’s schedule to find airtimes and learn how to access companion resources — including a free Legal Readiness Quiz and tools to help build your complete LifePlanning system.
Don’t remain among the millions of Americans sleepwalking their way into a retirement they never wanted. Instead, your retirement can be the exciting and fulfilling life you’ve always hoped it would be. Start by watching, reading and sharing Rajiv’s important message.
And remember, Age On, everyone!
The post For Most, Medigap Plan G Clear Winner Over Medicare Advantage Plan appeared first on Home.
