“I’ve put this much into it, so I’ve got to hold on to it until it pays off” is the Sunk Cost Trap. A Medicare supplement was once the only option for protection against the holes that Original Medicare leaves behind if beneficiaries have just Original Medicare and no other coverage. However, in 2003, Medicare Advantage Plans were introduced, and they provide an affordable Medicare option for many people. Medicare Advantage Plans are relatively new, and new things take a while to catch on. The traditional model of supplements was a “pay me now whether you need me or not, but pay me no more.” The Advantage Plan model is “pay-as-you-go,” in the form of co-pays. If you don’t use services, you do not have to pay anything.
In comparison to plans that charge a monthly premium whether you use them or not, it is not difficult to see why some might try to make the point that “you get what you pay for” and by that logic, advantage plans look “cheap.” But quality health care that you can comfortably afford is not cheap at all; in fact, having the peace of mind that you can afford the insurance plan you choose regardless of unpredictable circumstances is priceless to many of our clients. ”Getting something for nothing” “no free lunch” “get what you pay for” …these are all scripts that we have heard to discount the value proposition advantage plans offer…BEWARE OF THIS TRAP!