Dropping My Subsidized Retiree Health Plan for a Medigap Plan G—Am I Crazy to Pay $2K+ More?

Background: My wife and I are in our late 60s. Up until now, we’ve used a Medicare Advantage retiree plan heavily subsidized by my former employer. We pay  $1,100/year combined in premiums, with an enviable $1,500 annual out-of-pocket maximum per person.

So why drop it?

Shrinking Networks: Two years ago, the plan dropped my dermatologist. A few weeks ago, they notified me that my primary care doctor of 20 years will be completely out-of-network in 2027.

Prior Authorization: We want to avoid the administrative hoops and coverage delays common with Advantage plans as we get older.

The Strategy: We are switching to Original Medicare paired with a Medigap Plan G and a standalone Part D drug plan.

This will increase our estimated annual costs from ~$1,750/year (premium + typical copays under Advantage) to ~$4,000/year (Plan G premiums + Part D premiums + Part B deductibles).

Why lock it in now? Both of us are currently in good health, but that won’t last forever. If we wait until a major health issue strikes, medical underwriting will forever lock us out of Medigap in our state. We realized that if we wanted to make this move, we had to pounce while we could pass underwriting. We applied, passed, and are officially approved.

The Trade-off: We aren’t thrilled about spending an extra $2,000+/year right out of the gate. Plus, once I drop my employer-sponsored retiree plan, there’s no going back.

However, we view this extra cost as buying insurance on our medical freedom—ensuring we can see any doctor in the country who accepts Medicare, without network limitations or prior authorization friction, for the rest of our lives.