The best Medicare plan depends on how you use healthcare, where you live, and what you can afford to pay each month

There is no single "best" plan because Medicare comes in different shapes, and each one works better for different people. Some plans let you see any doctor but cost more upfront. Others lock you into a network of doctors but charge less. The choice comes down to three things: how much healthcare you think you'll need this year, which doctors and hospitals you want to use, and how much you're willing to spend on premiums and out-of-pocket costs.

The four main types of Medicare coverage are Original Medicare (Parts A and B), Medicare Advantage (Part C), Medigap (supplemental insurance), and Part D (prescription drug coverage). You can combine some of these, but not others. Understanding what each one covers and what it costs is the first step to finding the right fit.

Key Takeaways

  • Original Medicare (Parts A and B) gives you the most freedom to choose doctors and hospitals, but you pay a percentage of costs after you meet your deductible.
  • Medicare Advantage plans (Part C) usually have lower monthly premiums and include prescription drug coverage, but limit you to in-network doctors except in emergencies.
  • Medigap policies cover costs that Original Medicare leaves behind, like copays and coinsurance, but work only with Original Medicare, not Advantage plans.
  • Part D prescription drug plans vary widely in cost and which medications they cover, so comparing plans year to year matters even if you liked your plan last year.
  • Your choice can change every year during the Annual Enrollment Period (October 15 to December 7), so you do not have to stay with a plan that stops working for you.

Original Medicare versus Medicare Advantage: The core trade-off

Original Medicare is run by the federal government. It covers hospital stays (Part A) and doctor visits and outpatient care (Part B). You pay a monthly premium for Part B, and then you pay a percentage of the cost of care after you meet your deductible. In 2024, the Part B deductible is $240 per year, but this amount changes annually. Once you hit that deductible, you typically pay 20 percent of the cost of most services. There is no yearly cap on what you can spend out of pocket.

Medicare Advantage (Part C) is sold by private insurance companies under contract with Medicare. These plans bundle hospital, doctor, and usually prescription drug coverage into one monthly premium. Many Advantage plans charge $0 per month, though some charge $50 to $200. The trade-off is that you must use doctors and hospitals in the plan's network, except in emergencies or urgent situations. You also typically pay a copay (a fixed amount like $20 for a doctor visit) rather than a percentage of the bill. Most Advantage plans have an out-of-pocket maximum — usually $6,700 to $7,550 per year — which means your costs stop there, even if you need a lot of care.

Choose Original Medicare if you want to see any doctor without asking permission first, or if your current doctors do not accept Medicare Advantage in your area. Choose Medicare Advantage if you want predictable monthly costs, do not mind staying in-network, and want prescription drugs included in one plan.

How Medigap fills the gaps in Original Medicare

If you choose Original Medicare, you will pay 20 percent of most bills after your deductible. Medigap (also called supplemental insurance) is a policy sold by private companies that pays some or all of those costs. Medigap does not work with Medicare Advantage — you can have one or the other, not both.

There are ten standardized Medigap plans, labeled A through N. Plan G and Plan N are the most common choices for new beneficiaries. Plan G covers almost everything Original Medicare does not, including the Part B deductible. Plan N covers most costs but leaves you paying a small copay for doctor visits and emergency room visits. The monthly premium for Medigap varies by insurance company, your age, and where you live. In some states, premiums range from $100 to $300 per month for Plan G, but this varies significantly.

Medigap makes sense if you want the freedom of Original Medicare but do not want to pay 20 percent of every bill. The downside is that you pay both a Part B premium and a Medigap premium, so your total monthly cost is higher than an Advantage plan upfront — though your out-of-pocket costs when you actually need care are lower and more predictable.

Prescription drug coverage: Part D and what it includes

Whether you choose Original Medicare or Medicare Advantage, you need prescription drug coverage. If you have Original Medicare, you add Part D, a standalone drug plan. If you have Medicare Advantage, drug coverage is usually included.

Part D plans vary widely. Each plan has a formulary — a list of medications it covers — and medications are sorted into tiers. Tier 1 drugs (usually generics) cost less; Tier 5 drugs (usually brand-name) cost more. You pay a monthly premium, then a copay or coinsurance for each prescription. Once you spend $5,030 out of pocket in 2024 (this amount changes yearly), you enter the "donut hole," where you pay a higher percentage until your total spending reaches $7,550, at which point catastrophic coverage kicks in and you pay just 5 percent.

The medications you take matter enormously. If you take a drug that is on Tier 1 of one plan but Tier 4 of another, your yearly cost could differ by hundreds of dollars. Use the Medicare Plan Finder tool on Medicare.gov to see which Part D plans cover your specific medications and what you will pay.

Comparing plans side by side: What to look at

When you are deciding between plans, make a list of the doctors, specialists, and hospitals you use most often. Then check whether they are in-network for each plan you are considering. For Medicare Advantage plans, call the plan or check its website to confirm that your primary care doctor, cardiologist, or any other specialist you see regularly accepts that plan. Out-of-network care is usually much more expensive or not covered at all.

Next, list the medications you take and check the formulary for each plan. The Medicare Plan Finder lets you enter your medications and see the cost for each plan. Do not assume a generic version of your medication will work the same way or be covered the same way as the brand name.

Then add up the total yearly cost for each plan: monthly premiums, deductibles, copays or coinsurance for the care you expect to use, and prescription drug costs. If you are healthy and rarely see a doctor, a plan with a low premium and high deductible might be cheaper. If you have chronic conditions and see specialists regularly, a plan with higher premiums but lower copays and an out-of-pocket maximum might save you money.

When and how to change your plan

You can change Medicare plans once a year during the Annual Enrollment Period, which runs from October 15 to December 7. Changes take effect on January 1. If you miss this window, you generally cannot switch until the next year, unless you have a may have access to life event like moving to a new state, losing employer coverage, or becoming may be able to access for Medicaid.

Some people stay with the same plan for years. Others find that their plan changes — the network shrinks, a medication gets moved to a higher tier, or the premium goes up — and they need to switch. Even if you were happy with your plan last year, spend an hour in October comparing it to other options. Plans change every year, and what was the best choice in 2023 might not be in 2024.

To switch plans, go to Medicare.gov, use the Plan Finder tool, and select a new plan. You can also call 1-800-MEDICARE to speak with someone who can walk you through the options. Some local Area Agencies on Aging and senior centers also offer free one-on-one counseling to help you compare plans.

Special situations: When the standard choice does not fit

If you are still working and have employer coverage, you may not need to sign up for Medicare right away. However, if you do not sign up for Part B when you first become may be able to access, you may pay a penalty later. Talk to your employer's benefits office about how your employer plan coordinates with Medicare.

If you have a low income, 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 for Part D. These are run by your state, and income limits vary. Contact your state Medicaid office or call 1-800-MEDICARE to learn about you may have access to.

If you live in a rural area, your choices may be limited. Some areas have only one or two Medicare Advantage plans, or none at all. In that case, Original Medicare with Medigap may be your only real option. Check what is available in your area early, because some plans close enrollment if they reach capacity.

Frequently Asked Questions

Can I switch from Medicare Advantage to Original Medicare outside the enrollment period?

No, not usually. You can switch during the Annual Enrollment Period (October 15 to December 7) or if you have a may have access to life event like moving out of your plan's service area. If you move and your current plan is no longer available where you live, you can switch when ready.

If I choose Original Medicare now, can I switch to Medicare Advantage later?

Yes. You can switch to Medicare Advantage during the Annual Enrollment Period. However, if you have been on Original Medicare for a while and then switch to Advantage, you cannot switch back to Original Medicare with Medigap without going through underwriting, which means the insurance company can deny you or charge you more based on your health. This is called "may provide issue" protection, and you lose it after your first year on Advantage.

What happens if my doctor leaves my Medicare Advantage plan's network?

If your doctor stops accepting your plan, you can usually continue seeing them out-of-network at a higher cost, or you can switch to a different Medicare Advantage plan during the Annual Enrollment Period. Some plans allow you to switch mid-year if your doctor leaves the network, so call your plan to ask.

Do I have to choose a plan every year, or can I keep the same one?

You can keep the same plan if you want to. However, plans change every year — premiums go up, networks shrink, formularies change. Spending an hour comparing plans in October can save you hundreds of dollars a year, so it is worth doing even if you were happy last year.

What if I cannot afford any of the plans available to me?

If your income is low, you may may have access to for the Medicare Savings Program, which helps pay your Part B premium, deductible, and copays. You may also may have access to for the Low-Income Subsidy for Part D, which lowers your prescription drug costs. Contact your state Medicaid office or call 1-800-MEDICARE to learn what you might be able to get.