Those colorful Medicare Advantage commercials make it sound like you’re missing out on free dental cleanings and grocery allowances if you stick with traditional Medicare. But behind all that marketing sparkle lies some serious number-crunching that could impact your wallet and your health care for years to come.

Let’s break down what these two options actually cost – and what they cover – so you can make a decision based on facts, not flashy ads.

Understanding the Basic Cost Structure

Traditional Medicare comes with predictable costs that many people find reassuring. You’ll pay your Medicare Part B premium (around $185 per month for most people in 2025), plus a $257 annual deductible. After that, you typically pay 20% of most medical services with no annual cap on your out-of-pocket spending.

Medicare Advantage plans often advertise “$0 monthly premium,” but here’s what that really means: you still pay your Medicare Part B premium to the government, but the insurance company doesn’t charge you an additional monthly fee. However, you’ll face different cost-sharing rules that can add up quickly.

The Real Cost Comparison

When Medicare Advantage Might Save Money

If you’re relatively healthy and use primarily in-network providers, Medicare Advantage can offer genuine savings. Many plans cap your annual out-of-pocket costs at $3,000 to $9,350, which traditional Medicare doesn’t do. The cap protects you from catastrophic medical bills, but the real savings come from lower day-to-day costs. For someone who spends $2,000 annually on medical care, a Medicare Advantage plan with low copays might save $500 to $1,000 per year compared to traditional Medicare plus supplement coverage.

Take Maria, who visits her primary care doctor quarterly and takes two generic medications. Her Medicare Advantage plan charges $10 copays for doctor visits and $5 for prescriptions. Her annual medical costs: around $280. With traditional Medicare plus a supplement plan, she’d likely pay $1,200 to $2,000 annually.

When Traditional Medicare Costs Less

The math flips for people with chronic conditions or those who need specialist care. Traditional Medicare with a Medigap supplement plan might cost $150 to $300 monthly, but it covers 100% of Medicare-approved services after deductibles.

Consider Robert, who manages diabetes and sees a cardiologist regularly. His Medicare Advantage plan requires $40 specialist copays and prior authorization for certain tests. Annual costs could easily hit $3,000 to $5,000. With traditional Medicare plus Medigap Plan G, he’d pay around $2,400 annually with predictable coverage.

Network Restrictions and Hidden Costs

Medicare Advantage plans limit you to specific networks of doctors and hospitals. If your longtime physician isn’t in-network, you’ll either pay significantly more or need to switch providers. This restriction doesn’t exist with traditional Medicare – you can see any doctor who accepts Medicare nationwide.

Emergency situations highlight this difference dramatically. With traditional Medicare, you’re covered at any hospital. Medicare Advantage plans may require you to pay out-of-network rates if you’re hospitalized while traveling or end up at an out-of-network facility near home, potentially costing thousands more.

Prescription Drug Coverage Reality Check

Most Medicare Advantage plans include prescription drug coverage, which sounds convenient. However, these plans often use tiered formularies that can make your medications expensive. A drug that costs $20 monthly might jump to $100 if it moves to a higher tier next year.

Traditional Medicare requires separate Part D prescription coverage, adding another $30 to $80 monthly. But you can choose from dozens of plans to find one that covers your specific medications affordably. Starting in 2025, all Medicare prescription plans cap out-of-pocket drug costs at $2,000 annually.

The Fine Print on Extra Benefits

Those advertised dental, vision, and wellness benefits come with significant limitations. Dental coverage might include two cleanings annually but cap major work at $1,000. Vision benefits often cover only basic eye exams, not designer frames or progressive lenses.

Some plans offer grocery allowances or transportation benefits, but these typically target specific health conditions or income levels. The average person might qualify for $25 monthly in grocery credits – helpful but not life-changing.

Making Your Decision

Your health status, budget, and priorities should drive this choice. If you value predictable costs and provider flexibility, traditional Medicare with a supplement plan often provides better long-term value. If you’re healthy, prefer lower monthly premiums, and can work within network restrictions, Medicare Advantage might save money.

Consider using the Medicare Plan Finder to compare actual costs based on your medications and expected medical needs. The State Health Insurance Assistance Program also offers free, unbiased counseling to help you navigate these decisions.

Key Takeaways

• Medicare Advantage can save money for healthy individuals who stay in-network

• Traditional Medicare offers more provider flexibility and predictable costs

• Consider your current doctors, medications, and health conditions when choosing

• Extra benefits in Medicare Advantage plans often come with significant limitations

• Annual out-of-pocket caps in Medicare Advantage provide protection traditional Medicare lacks