Who Actually Spends More on Medicare: Medicare Advantage or Medicare Supplement Members?
By Tyler Haskell, CFP®
One of the most common questions I get from clients approaching Medicare is:
“Which option costs less over time: Medicare Advantage or a Medicare Supplement?”
Well, let’s talk about.
Many people assume Medicare Advantage always costs more because of copays.
Others believe Medicare Supplements are always worth the higher premium.
The truth is, both can be great options depending on your health, budget, and priorities.
Let’s compare what people actually spend.
Who Actually Spends More on Medicare: Medicare Advantage or Medicare Supplement Members?
First, Let’s Talk About Monthly Premiums
One of the biggest differences between the two options is how you pay for your healthcare.
Medicare Advantage
Many Medicare Advantage plans available in Utah have a $0 monthly premium in addition to your Medicare Part B premium.
That means your monthly costs are often much lower.
Instead of paying higher premiums every month, you pay for healthcare as you use it through copays and coinsurance.
Medicare Supplement
With a Medicare Supplement, you’re typically paying:
- Medicare Part B premium
- Medicare Supplement premium
- Stand-alone Part D prescription drug plan
Depending on your age and carrier, those additional premiums can easily total a couple thousand dollars each year.
In exchange, your out of pocket medical expenses become very low and much more predictable.
What Does the Average Person Actually Spend?
This is where many people are surprised.
There isn’t a national study that tells us the exact average out-of-pocket spending for every Medicare Advantage enrollee compared to every Medicare Supplement enrollee.
However, we do know several important facts.
Most Medicare Advantage Members Never Reach Their Maximum Out-of-Pocket
Every Medicare Advantage plan has an annual maximum out-of-pocket limit for Medicare-covered Part A and Part B services.
In 2026, the average in-network maximum out-of-pocket for Medicare Advantage plans in Utah is about $5,500.
That sounds high…
But here’s what many people don’t realize.
Most Medicare Advantage members never come close to reaching that amount.
Many members only visit their primary care physician a few times each year, see an occasional specialist, and fill a few prescriptions.
For those individuals, total healthcare spending can be relatively low.
Medicare Supplement Members Usually Spend More Every Month
Medicare Supplement members generally know exactly what they’re paying every month.
They trade higher premiums for fewer surprises.
Even during years when they use very little healthcare, they’re still paying those monthly premiums.
Many retirees appreciate that predictability.
Others would rather save those premium dollars and accept some financial risk if they become seriously ill.
Neither approach is wrong.
Let’s Compare Three Real-Life Examples
Scenario 1: Healthy Retiree
John is 67 years old.
He:
- Has one annual physical
- Sees his primary care doctor twice
- Takes two generic medications
- Rarely visits specialists
Medicare Advantage
John pays:
- Medicare Part B premium (202.90/month in 2026)
- Very little in copays ($0 for primary doctor visit and around $30 per specialist visit)
- Low prescription costs
His total healthcare spending is relatively low.
Medicare Supplement
John pays:
- Medicare Part B premium (202.90/month in 2026)
- Medicare Supplement premium (around $150-200/month)
- Part D premium ($40/month on average)
Even though he hardly used his insurance, he still paid those premiums every month.
Winner: Medicare Advantage
Scenario 2: Average Healthcare Use
Mary sees:
- Primary care physician
- Cardiologist
- Orthopedic doctor
- Has an MRI
- Attends physical therapy
- Takes several medications
Now the costs become much closer.
Mary may pay several hundred dollars—or more—in Medicare Advantage copays.
The Medicare Supplement member continues paying higher monthly premiums but often has very little additional medical expense.
Winner: It depends on the premiums and the amount of care received.
Scenario 3: Serious Illness
Now imagine someone requires:
- Hospitalization
- Surgery
- Multiple specialists
- Chemotherapy
- Extensive physical therapy
The Medicare Advantage member may have several thousand dollars in copays during that year.
The Medicare Supplement member often continues paying mostly the same predictable monthly premiums.
This is one of the biggest reasons many people choose a Medicare Supplement.
They aren’t necessarily trying to save money every year.
They’re buying financial predictability if something unexpected happens.
The Tradeoff
I often explain it this way.
Medicare Advantage asks:
“Would you rather save money most years and accept some financial risk if you become seriously ill?”
A Medicare Supplement asks:
“Would you rather pay more every month so your costs stay more predictable if you need extensive healthcare?”
Neither answer is right or wrong.
It’s simply a matter of personal preference.
What I Tell My Clients
One thing I try to help clients avoid is comparing plans based only on the monthly premium.
Instead, I encourage them to consider:
- Their current health
- Family medical history
- Prescription medications
- Budget
- Travel plans
- Preferred doctors and hospitals
- Comfort with financial risk
The “best” Medicare plan isn’t the cheapest.
It’s the one you’ll still be happy with if your health changes five years from now.
Frequently Asked Questions
Is Medicare Advantage always cheaper?
NO, not necessarily.
Many healthy people spend less overall with Medicare Advantage because of the lower premiums. However, someone who has a year with significant medical expenses may pay more out of pocket than someone with a Medicare Supplement.
Do most Medicare Advantage members reach their maximum out-of-pocket?
No.
While every plan has a maximum out-of-pocket limit, only a relatively small percentage of members reach that limit in a given year.
Why do people still buy Medicare Supplements?
Many people value:
- Predictable healthcare costs
- Freedom to see any provider nationwide that accepts Medicare
- Fewer unexpected medical bills
They’re willing to pay higher monthly premiums for that peace of mind.
My Advice
I’ve found that Medicare isn’t about finding the “cheapest” plan—it’s about finding the best value for your situation.
Some of my clients save thousands of dollars over the years with Medicare Advantage because they stay healthy and appreciate the lower premiums.
Others sleep better knowing they have a Medicare Supplement that keeps their out-of-pocket costs more predictable, even if they’re paying more each month.
The right choice depends on your health, your budget, your goals, and your tolerance for financial risk. That’s why I believe every Medicare decision should be personalized rather than based on what worked for a friend or neighbor.
If you’re approaching Medicare in Utah and want help comparing your options, I’d be happy to walk through the numbers with you so you can make an informed decision.
