Looking to Relocate in Retirement? Factor in the Cost of Your Medicare Advantage Plan, too.

One of the best parts of retirement is planning on where you’ll relocate. And you’ll find no lack of “best places to retire” in a Google Search. Though, US News & World Report ranks them every year – hint, most of the top 10 are in Florida (no state taxes, hello!)

Looking at the cost of housing (rental or purchases) as well as state and local taxes is a great way to determine where to retire. We’re not sure why US News factors in commute time – but it’s good to know. However, one consideration in choosing where to live in retirement should be the cost of your Medicare Advantage Plan.

Of note is that Original Medicare coverage is national; a Medicare Advantage likely is only accepted in your state or local area. So check with your insurance agent if you travel a lot, plan to be a nomad, or will be living in the south in the winter.

How Are Medicare Advantage Premiums Determined?

Medicare Advantage premiums are determined by each private insurance company according to the plan (PPO, HMO, etc). It's important to know Medicare Advantage rates can increase each calendar year. Essentially, you’re replacing Original Medicare with the Advantage Plan. So instead of paying premiums to Medicare, you’ll pay it to Kaiser, Humana, etc.

As the whitepaper put out by BMA states, Medicare Advantage plans are priced according to the base rate, risk adjustment, premiums, and rebates. All this to say that it’s a regulated plan and there are many, many options to choose from. 

“​​Unlike the original program, Medicare Advantage plans operate in limited geographical areas. HMOs usually require you to go to doctors and hospitals within the plan’s provider network, except in emergencies; PPOs allow you to go out of network for higher copays.” AARP

Do Medicare Premiums Vary By State?

The short answer is yes, Medicare premiums vary by state when it comes to Medigap, Part D, and Medicare Advantage Plans. Those are all underwritten by private insurance companies. Original Medicare will be the same premium regardless of where you live since it is a Federal Program. So, if you plan to travel often, you may prefer to keep Original Medicare and add Part D for prescriptions

“​​These private plans are regulated by state insurance commissions and they differ from state to state.” Retire Guide

What States Have the Cheapest Medicare Advantage Plans?

Are you still excited about retiring to Florida? Maybe reconsider if Medicare Advantage is your plan of choice. It’s not on the list of the lowest Medicare Advantage Premiums and Florida Medicare Advantage plans run about $68/month but are still far from the most expensive. Would you believe that it’s North Dakota at $116? 

“​​Maine, South Carolina, New Mexico, Idaho, Missouri and Nevada have the lowest average monthly Medicare Advantage premiums in 2022, with all five states having average plan premiums of $42 or less per month.” MedicareAdvantage.com

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