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Before purchasing a new refrigerator, you’d likely explore different brands, read user reviews and compare prices at different stores. But would you put this same effort into shopping for a Medicare plan each year?

Only 30% of Medicare enrollees compare plans during open enrollment, notes U.S. News & World Report. And an eHealth survey found that just 10% of Medicare beneficiaries were enrolled in the most cost-effective prescription drug plan.

Medicare coverage is complex, but there are resources to help you examine plan costs and offerings. Taking the time and putting in the effort each year could pay long-term dividends through better health coverage and financial savings.

These Tips Can Help You Shop Around for Medicare Plans:

• Review key factors such as your current health status, health care providers and prescription drugs.
• Understand the differences between Original Medicare and Medicare Advantage, and variations among Medicare Advantage plans.
• Use available resources to explore Medicare plans.

Items to Review Each Year

To understand which plan is best for you, examine the following: 

• Your current and expected health needs
• Your current and expected prescription drug needs
• The network availability for your doctor and preferred health care providers

Health Needs

Your current health status is a major factor in choosing the right plan. If you experience changes in your health or receive a new diagnosis during the plan year, it becomes essential to pick a plan that covers your health needs. 

Consider your:

• Blood pressure, cholesterol levels, cardiovascular health and other key indicators
• Dental health
• Hearing
• Vision
• Prescription drugs
• Family medical history

Prescription Drug Needs

Review your plan’s list of covered prescription drugs. Coverage can change from year to year. Verify that the prescription drugs you need will be covered. In addition to drug coverage, other potential changes to prescription drug plans include:

• Monthly premiums
• Annual deductibles, copayments and coinsurance
• Prescription drug tiers

Prescription drugs can be added to or removed from a plan. And they can be moved between tiers. 

For example, generic drugs are typically found in Tier 1, which would have the lowest copay. Tier 2 might include common or preferred brand-name drugs, which would have a higher copay. Tiers 3 and 4 might cover nonpreferred brand-name drugs and high-cost drugs. These tiers would have the highest copays or coinsurance percentages. Understanding where your prescription drugs will be listed can have a big financial impact.

Doctors and Health Care Providers

Plans can also change provider networks each year. Your plan must provide you with an annual notice of change. This information will include network participation. 

Make sure your doctor, other health care providers, and preferred hospitals and medical facilities are in your plan’s network for the year ahead. This can save you from choosing new providers or facing higher costs from out-of-network charges.

Original Medicare and Medicare Advantage 

With the above information, you can better understand your cost and coverage options. Start by examining the differences between Original Medicare (Part A, Part B and often Part D) and Medicare Advantage (Part C), as well as the variations between Medicare Advantage plans.

KFF found similar rates of quality, satisfaction and care coordination between Medicare Advantage and Original Medicare. Medicare Advantage had better ratings for preventive care and hospital readmissions. Original Medicare had higher ratings for cancer care, skilled nursing facilities and home health agencies.

Premiums and out-of-pocket costs are typically lower for Medicare Advantage plans than Original Medicare. Many Medicare Advantage plans advertise zero-dollar or low-dollar monthly premiums. But as you examine different plans, don’t base your decision solely on the cost of monthly premiums. To get the full picture of cost-effectiveness, factor in a plan’s copays, coinsurance, deductibles, prescription drug coverage and out-of-pocket-limits.

Some Medicare Advantage plans come with high out-of-pocket costs if you have health challenges or receive out-of-network services. These can come from doctors, hospitals, skilled nursing care and other medical facilities.

Because of this, the type of coverage and network availability may influence your decision. Original Medicare has a broad network of doctors who accept Medicare payments. Networks in Medicare Advantage plans may fluctuate more each year. 

Many Medicare Advantage plans are Health Maintenance Organizations (HMOs). HMOs typically have smaller provider networks and may require prior authorizations and referrals to see specialists. However, HMOs might also offer better care coordination and communication for beneficiaries with chronic conditions. Your personal health history should guide your decision.

Geographic region is another consideration. If you live in a rural or medically underserved community, check the network differences between Medicare Advantage and Original Medicare. In addition to your general physician, explore network participation for medical specialists you may need.

If you travel, review your plan’s coverage and limitations for items such as medical transportation and international medical care.

There’s a lot to consider, so we’ve broken down the pros and cons of each below. 

Enrollment Periods

Medicare’s open enrollment period runs Oct. 15 through Dec. 7 each year. This is your chance to switch plans from Original Medicare to Medicare Advantage, or from one Medicare Advantage plan to another.

If you are already enrolled in a Medicare Advantage plan, you also can make changes during Medicare Advantage open enrollment. This enrollment period runs Jan. 1 through March 31 each year. You can switch from Medicare Advantage to Original Medicare, or from one Medicare Advantage plan to another.

Resources to Help You

Medicare is a massive program. As of 2024, there are nearly 4,000 Medicare Advantage plans nationwide. And the average person will choose from 43 different plans, reports KFF. 

You don’t have to navigate it alone. The following resources can help you find and select a Medicare plan.

Personal Research

If you’re comfortable with technology and health care benefits, you can compare and contrast Medicare information on your own. Medicare.gov offers a plan finder tool based on ZIP code. It can help you compare benefits and costs for all available plans.

Friends and Family

Talk to those closest to you about their experiences with Medicare. Individuals in the same geographic area can provide insights on what to look for and what to avoid. Try to seek advice from people of a similar age, financial situation and life standing.

Medicare Broker 

Brokers have a thorough understanding of the Medicare program. That includes Original Medicare, Medicare Advantage, Medigap and Medicare Part D prescription drug plans. State-specific training and licensing regulations require brokers to stay on top of key trends. And working with a Medicare broker is free. Online searches can help you locate a Medicare broker. The National Council on Aging requires its Medicare partners to meet specific Standards of Excellence. Medicare.gov also provides information on broker expectations. 

Medicare STARS

Medicare uses this rating system for Medicare Advantage and Medicare Part D prescription drug plans. Plans are rated from one to five stars, with five representing the highest quality. Medicare STARS is intended to help you spot plans with a quality track record — and avoid plans that aren’t measuring up. However, don’t rely solely on this tool. Forbes notes that the system has limited information and companies may have figured out how to inflate plan ratings.

State Health Insurance Assistance Programs

These state programs provide one-on-one support for understanding and comparing Medicare plans. Your state program is free. It includes counseling and assistance for Medicare-eligible individuals and their families and caregivers. You can receive help with: 

• Eligibility
• Reviewing health and prescription drug plans
• Understanding how Medicare interacts with supplemental policies, retiree coverage, Medicaid and other insurers 
• Your Medicare rights

Reviewing Your Medicare Options

As you examine Medicare plans each year, you have lots to consider. But the effort can have a big impact on your retirement, health care and financial planning. 

For more information, use one of the trusted resources above or contact your benefits adviser. They can help you understand plan options, costs and coverages for Original Medicare and Medicare Advantage.