Start with what you actually use

The best Medicare plan for you depends on three things: which doctors and hospitals you want to use, how much you expect to spend on prescriptions, and what you can afford to pay each month. There is no single "best" plan — the plan that works for your neighbor might cost you hundreds more or leave you stuck with an out-of-network doctor.

Before you compare plans, write down the names of the doctors you see regularly, the pharmacy where you fill prescriptions, and any hospitals you have used in the past two years. Then check whether each plan you are considering includes those doctors and that pharmacy in its network. A plan with a low monthly premium is not a bargain if your primary care doctor is not in it.

If you take prescription medications, look up each drug on the plan's formulary — that is the official list of drugs the plan covers. The same drug can cost $15 a month under one plan and $80 under another, so this step alone can save you hundreds of dollars a year.

Key Takeaways

  • Write down your current doctors, pharmacy, and any hospitals you use before comparing plans, because a cheap plan does not save money if your doctor is not in the network.
  • Check the plan's formulary to see what your prescriptions will actually cost under each option, since the same drug can vary by hundreds of dollars a year between plans.
  • Original Medicare, Medicare Advantage, and Medigap are three different structures, and you cannot be enrolled in more than one at the same time.
  • Your costs under any plan depend on how much health care you actually use, so estimate your likely spending rather than picking based on the lowest premium alone.
  • You can change plans once a year during the annual enrollment period, which runs from October 15 to December 7, so a choice now is not permanent.

Understand the three main structures

Medicare comes in three different shapes, and you have to pick one. You cannot combine them — for example, you cannot have both Original Medicare and a Medicare Advantage plan at the same time.

Original Medicare is run by the federal government. You get a red, white, and blue card. You can see any doctor or hospital that accepts Medicare (most do), and you pay a deductible and coinsurance for each service. There is no monthly premium beyond what you already pay for Part B, but you have no cap on how much you spend out of pocket in a year. Many people add a Medigap policy to cover the gaps — that is a separate insurance policy you buy from a private company.

Medicare Advantage (Part C) is sold by private insurance companies. You get a different card from the insurance company. You usually pay a lower or zero monthly premium, but you have to use doctors and hospitals in the plan's network, and you have a yearly cap on out-of-pocket costs. Most Advantage plans include prescription drug coverage built in. You cannot have Medigap at the same time as Advantage.

Medigap is not a choice between plans — it is an add-on to Original Medicare. It is a separate insurance policy sold by private companies that covers the deductibles and coinsurance that Original Medicare does not. You pay a monthly premium for Medigap on top of your Medicare Part B premium. Medigap does not cover prescription drugs, so if you choose Original Medicare plus Medigap, you also need a separate Part D plan for prescriptions.

Compare your actual costs under each plan

The monthly premium is only one piece of your cost. You also pay deductibles, copays, and coinsurance — and those vary widely between plans. To know which plan actually costs less, you need to estimate how much health care you will use and calculate the total.

Start with a realistic picture of your health. If you see your doctor four times a year, take three prescription medications, and have not been hospitalized in five years, your costs will look very different from someone who sees a specialist monthly and takes eight medications. Use your past year as a guide.

Then pick two or three plans that include your doctors and pharmacy, and for each one, add up: the monthly premium, the annual deductible, the copay for each doctor visit you expect, the coinsurance for any procedures or tests you anticipate, and the total cost of your prescriptions under that plan's formulary. The plan with the lowest total is usually the best choice for your situation — not the one with the lowest premium.

Use Medicare's official comparison tool

Medicare.gov has a plan comparison tool that lets you enter your doctors, pharmacy, and prescriptions and see side-by-side costs for every plan available in your area. You can access it at Medicare.gov/plan-compare. You will need your prescriptions listed by their generic names, and the exact names of your doctors and pharmacy.

The tool shows you the monthly premium, the annual deductible, the copay for common services, and the total estimated cost for your prescriptions under each plan. It also tells you whether your doctors are in the network. This is the most reliable way to compare because it uses the actual plan documents and formularies.

If you do not have internet access or want help using the tool, you can call 1-800-MEDICARE and speak with a counselor who can walk you through the comparison over the phone. They cannot tell you which plan to pick, but they can help you understand the costs and what each plan covers.

Know the rules about switching plans

You can change Medicare plans once a year during the annual enrollment period, which runs from October 15 to December 7. Any changes you make during this window take effect on January 1 of the following year. This means a plan choice is not permanent — if you pick a plan in October and realize in March that it is not working for you, you can switch during the next enrollment period.

There are a few exceptions where you can change plans outside the enrollment period. If you move to a different state, lose employer coverage, or have a major life event like the death of a spouse, you may be able to switch. These are called may have access to life events, and you have 60 days from the event to make a change. Call 1-800-MEDICARE to report a may have access to event and ask whether you can switch.

Account for changes in your health and medications

Your best plan today might not be your best plan next year. If you start taking a new medication, your prescription costs could change dramatically under the same plan. If you change doctors or move, your network might no longer include the people you see. If you are hospitalized or diagnosed with a chronic condition, your expected health care use will shift.

Set a reminder for September to review your current plan and your medications. Check whether your doctors are still in the network, look up your prescriptions on the formulary again (formularies change every year), and compare your plan against two or three others using the Medicare.gov tool. This annual review takes an hour and can save you hundreds of dollars.

If a medication you take is no longer on the formulary or has moved to a higher cost tier, contact the plan's pharmacy department and ask about a formulary exception. You can also ask your doctor to request an exception on your behalf. Plans sometimes cover drugs off-formulary if your doctor documents that you have tried the formulary alternatives and they did not work.

Understand what "network" means and why it matters

A network is the list of doctors, hospitals, and pharmacies that have a contract with the insurance plan. If you see a doctor in the network, you pay the plan's copay or coinsurance. If you see a doctor outside the network, you pay much more — sometimes the full bill.

Original Medicare has no network — any doctor or hospital that accepts Medicare is "in network." This is why Original Medicare appeals to people who want flexibility or who live part of the year in different states.

Medicare Advantage plans have networks, and they vary. Some networks are very broad and include most doctors in your area. Others are narrow and include only a few hospitals. Before you pick an Advantage plan, call the plan and ask whether your primary care doctor, any specialists you see, and your preferred hospital are in the network. Do not rely on the online directory alone — call and confirm, because directories are sometimes out of date.

Frequently Asked Questions

What if my doctor is not in any plan's network?

If your doctor does not participate in Medicare Advantage plans in your area, you have two options: switch to Original Medicare (which has no network), or ask your doctor whether they will see you as an out-of-network patient under an Advantage plan and what that will cost. Some doctors will do this for established patients, though you will pay more.

Can I change my mind after I pick a plan?

Yes. You can change plans once a year during the annual enrollment period from October 15 to December 7. If you pick a plan in November and change your mind in December, you can switch to a different plan, and the new plan takes effect on January 1. After January 1, you are locked in until the next enrollment period unless you have a may have access to life event.

What happens if my prescription is not on the plan's formulary?

You can ask the plan for a formulary exception, which means the plan will cover a drug that is not on its list. Your doctor can request this on your behalf by submitting a letter explaining why you need that specific drug. Plans often approve exceptions if you have tried the formulary alternatives and they did not work or caused side effects.

Is Original Medicare or Medicare Advantage cheaper?

It depends on how much health care you use. Advantage plans usually have lower monthly premiums and a cap on out-of-pocket costs, which helps if you use a lot of care. Original Medicare has no cap on out-of-pocket costs, but you can see any doctor, and you might pay less if you use very little care. Use the Medicare.gov comparison tool to calculate your actual costs under each option.

What if I cannot afford any of the plans?

If your income is low, you may be able to get help paying premiums and out-of-pocket costs through the Medicare Savings Program or the Low-Income Subsidy program. Contact your state Medicaid office or call 1-800-MEDICARE to find out whether you may have access to. These programs are based on income, not on your assets.