How to Choose a Medicare Plan

Once you qualify for Medicare, it will cover most of your medical bills but it won’t pay for all of them. If you have Original Medicare, you are responsible for a $1,632 Part A deductible and a $240 Part B deductible in 2024, as well as 20% copayments on most medical services. To minimize these expenses, you could instead choose a Medicare Advantage plan, also known as Medicare Part C. 

Medicare Advantage plans are a way to receive your Original Medicare benefits but often come with more coverage, additional benefits, and lower out-of-pocket costs. However, coverage and quality can vary significantly between companies and plans. You need to understand your options and your needs in order to choose which Medicare Advantage plan is best.

Understand How Medicare Works 

To start, familiarize yourself with the different parts of Medicare.

• Medicare Part A (hospital insurance): Medicare Part A covers inpatient care in a hospital or skilled nursing facility. Most people receive Medicare Part A for free once they turn 65 and qualify for Social Security. 
• Medicare Part B (medical insurance): Medicare Part B pays for services from doctors, other healthcare providers, outpatient care, preventive care, and medical equipment. When you turn 65 and qualify for Medicare Part A, you can enroll in Medicare Part B. The 2024 premium is $174.70 for most people. 
• Medicare Part C (Medicare Advantage): Medicare Advantage is a way to receive your Original Medicare benefits. To join Medicare Advantage, you must have enrolled in Medicare Part A and Medicare Part B first. Most Medicare Advantage plans include prescription drug coverage, and some, not all, charge a premium in addition to your Part B premium.
• Medicare Part D (prescription drug coverage): Original Medicare Part A and Part B do not cover prescription drugs. Instead, you can buy Medicare Part D prescription drug coverage through private insurers or buy a Medicare Advantage plan with drug coverage. You must have Medicare Part A and/or Part B before you can buy a Part D prescription drug plan. 
• Medigap (Medicare supplement plans): Medigap plans, also known as Medicare supplement plans, are a type of private insurance designed to supplement Original Medicare rather than replace it. They pay for uncovered, out-of-pocket costs, such as Part A and B coinsurance costs and deductibles. The extent of coverage varies depending on which Medigap plan you choose. You can’t buy Medigap if you have a Medicare Advantage plan.

Decide Between Original Medicare vs. Medicare Advantage

In 2022, more than 22 million people were on a Medicare Advantage plan (nearly half of all who were eligible for Medicare). Choosing one or the other deserves careful consideration, as there are pros and cons of using Original Medicare or Medicare Advantage.

Original Medicare Pros

• No network restrictions: It’s easier to see any medical provider you want because there are no network restrictions, and nearly nine out of 10 doctors accept new Medicare patients.
• You can buy Medigap: Medigap plans aren’t available to Medicare Advantage members. And if you buy a Medigap plan to supplement your Original Medicare benefits, out-of-pocket costs may be more predictable relative to a Medicare Advantage plan. 

Original Medicare Cons

• Premiums could be higher with Medigap and Part D: You may pay more in premiums by supplementing Original Medicare with a Part D drug plan and Medigap plan, relative to buying a Medicare Advantage plan.
• No limit on out-of-pocket costs: Original Medicare does not limit out-of-pocket costs, unless you supplement with a Medigap plan that does. 

Medicare Advantage Pros

• $0 premium plans: Many Medicare Advantage plans do not charge a premium (aside from your Part B premium).
• Additional benefits included in coverage: Many Medicare Advantage plans offer additional benefits such as vision, hearing, and dental coverage, plus transportation benefits, gym memberships, and other perks.
• Part D drug coverage included: Many Medicare Advantage plans include Part D prescription drug coverage.
• Annual limits on out-of-pocket costs: Medicare Advantage plans cap out-of-pocket costs at $8,850 for 2024.
• Low copays: Medicare Advantage plans frequently have lower copays and/or coinsurance requirements when using in-network providers.

Medicare Advantage Cons

• Network restrictions: To receive the maximum benefit, you are limited to your plan’s network.
• Ineligible for Medigap: You’re ineligible to purchase Medigap which can help pay Part A and B deductibles.

If you want a Medicare Advantage plan, you likely have several options to choose from in your area. To pick the Medicare Advantage plan that best fits your needs, go through the following steps. 

Assess Your Needs

Before reviewing specific Medicare Advantage plans, determine what you need from your healthcare coverage. First, make a list of your prescriptions and note your preferred pharmacy. You should also consider:

The Type of Managed Care Network

Medicare Advantage plans have different types of provider networks. With an HMO, you generally can’t see an out-of-network provider except in emergencies. With a PPO, you’ll get the maximum benefit by seeing in-network providers, but out-of-network providers are also covered. With a PFFS plan, you can see any doctor. Plans that allow for more flexibility tend to charge a higher premium.

The Deductible

A deductible is an out-of-pocket cost you pay before your coverage kicks in. Plans with a high deductible tend to charge lower monthly premiums because your share of costs is higher. Someone who rarely uses healthcare might prefer a high-deductible plan to save on premiums, whereas someone who uses care frequently should choose a low-deductible plan.

Co-pays

A copay is a fee you pay each time you see a doctor or other provider. Some plans charge low copays or even $0 while others charge more. A low copay usually means a higher premium.

Maximum Out-of-Pocket Costs

Medicare Advantage plans have an annual out-of-pocket limit that may differ between plans. (The maximum OOP limit that Medicare Advantage plans can set is $8,850 for 2024.) Be sure you can afford the maximum limit amount for the plan you choose.

Prescription Drug Coverage

Consider how much your prescription drugs cost annually. If the total is more than $5,030 in 2024, you’ll enter a temporary coverage gap known as the Medicare donut hole or coverage gap. Plans can require that you pay up to 25% of drug costs in the gap until you’ve paid $8,000 out-of-pocket. However, some Medicare Advantage plans provide additional coverage during the coverage gap, making them ideal for those who expect to enter it.

Extra Benefits

Vision, dental, hearing aids, gym memberships, and transportation to doctor visits are a few of the extra benefits that are often available with Medicare Advantage plans.

Plan Star Ratings

Medicare and the National Committee of Quality Assurance (NCQA) give Medicare Advantage plans star ratings ranging from one to five. Each organization gives higher scores to plans with better coverage and customer service and fewer complaints. Decide whether you require a minimum quality level, or are willing to compromise quality for cost.

Get Medicare Advantage Quotes 

Medicare.gov offers a free online service for comparing different Medicare insurance plans, including Medicare Advantage plans. On the Medicare.gov homepage, click “Find Plans Now” and enter your ZIP code. Then, select the option to compare Medicare Advantage plans. Answer the prompts and enter your prescription drugs, including dosages. The tool also asks what pharmacies you prefer. 

Once this information is entered, Medicare.gov creates a list of all the plans in your area with each plan’s total drug and premium cost customized to your specific details.

Compare Medicare Advantage Plans

Depending on where you live, you could have several dozen plans to choose from. Each quote lists the premium, the deductible, copays, maximum out-of-pocket costs, benefits, and estimated drug and premium costs if you entered your prescription drug details. Use the list you made and consider the following to evaluate Medicare Advantage plans:

• Review drug coverage: If you click on “Plan Details” and scroll to “Estimated Total Monthly Drug Cost,” the Medicare.gov tool will predict how much you’ll pay per month for prescriptions. The tool also factors in what you would owe in the Medicare donut hole so you can see exactly how well each plan covers your drug costs.
• Compare “total drug and premium cost”: This quick comparison helps you see plan costs at a glance. Keep in mind that it doesn’t consider other costs like copays.
• Evaluate network restrictions: Check each plan’s network restrictions. If you want flexibility, filter results to only show PPO and PFFS plans. Plans with a more open provider network typically cost more.
• Consider additional benefits and services: One perk of Medicare Advantage plans is the additional benefits offered relative to Original Medicare. Quotes at Medicare.gov list which benefits each plan offers, such as vision, hearing, dental, over-the-counter drugs, and in-home support coverage.  
• Review plan ratings: The Medicare.gov tool gives each plan a star rating for quality. You can sort by star rating to see only those you’re comfortable with. 
• Visit a plan’s website for more information: While Medicare.gov gives a general overview of each plan, it doesn’t include every detail. For a complete list of what a plan covers, search for it on the insurer’s website, where you can also check if your doctor is part of its provider network.

Best Medicare Advantage Plans

Based on our review of the 11 largest providers of Medicare Advantage, here are the best Medicare Advantage plans:

• AARP/UnitedHealthcare: UnitedHealthcare is the largest provider of Medicare Advantage plans in the country. It offers HMO, PPO, and private fee-for-service (PFFS) options with additional drug coverage in the Medicare donut hole (also known as the “Medicare coverage gap”) plus a range of extra benefits, including free annual house calls.
• Cigna: Based on CMS data, Cigna has the lowest average premium ($6.81 per month) and the second-lowest average drug deductible ($23.96 per month) for its 2023 Medicare Advantage plans with drug coverage. Cigna offers plans with prescription drug coverage, and dental and vision benefits in 26 states.
• Humana: Humana provides Medicare Advantage plans in 49 states, making it the second largest provider nationwide. In addition to great customer service, it offers a variety of Medicare Advantage plans and an over-the-counter drug benefit.
• Aetna: If you spend a lot on prescription drugs, you should know that Aetna offers more Medicare Advantage plans with additional drug coverage in the Medicare donut hole than any other company we considered. Its plans offer a good value and many have $0 co-pays for primary care providers and specialists. 
  
• Kaiser Permanente: Coverage is only available in California, Colorado, Georgia, Hawaii, Maryland, Oregon, Virginia, Washington, and the District of Columbia. However, Kaiser members are very satisfied with the company. Kaiser’s average Medicare star rating is 4.77 out of 5. Its NCQA rating is 4.5 out of 5 stars. This makes Kaiser Permanente the highest-rated company we reviewed in both of those categories. 

Enroll In the Plan of Your Choice

Once you’ve picked a Medicare Advantage plan, start the enrollment process at Medicare.gov by clicking the “Enroll” button for the quote you’re interested in. You will need to provide your Medicare number and effective dates plus other information to confirm your eligibility. 

From there, the website will send your information to the insurer. If the insurer determines you’re eligible to join, it will send your policy contract including your card for coverage. 

Medicare Advantage Enrollment Periods

To join a Medicare Advantage plan, you must have Medicare Part A and Part B and enroll during a designated enrollment period.

• Initial enrollment period: When you first become eligible for Medicare, you have a seven-month window during which you can join any Medicare Advantage plan in your area. For most people, this period includes the three months before they turn 65, the month they turn 65, and the three months after they turn 65. 
• Annual open enrollment: Every year, there is an open enrollment period for Original Medicare and Medicare Advantage from Oct. 15 to Dec. 7. During this time, you can switch from Original Medicare to Medicare Advantage and sign up for any Medicare Advantage plan in your area. Your coverage will start on Jan. 1 of the following year.
• Medicare Advantage open enrollment: If you already have a Medicare Advantage plan, you have the option to switch to another one from Jan. 1 to March 31 each year. This is also the general enrollment period if you missed your initial enrollment period and don’t qualify for a special enrollment period.
• Special enrollment period: There are special circumstances when you can buy a Medicare Advantage plan outside these dates, such as if you had and lost employer-provided health insurance, moved to another area, moved in or out of a long-term care facility, or if Medicare officially sanctioned your plan for a problem.

The Bottom Line

Remember that Medicare Advantage plans only last one year. If your insurer doesn’t renew your plan or if you’re unhappy with the plan you have, you’ll need to sign up for a new Medicare Advantage plan through whichever enrollment period applies.

For help buying other types of Medicare plans, see our reviews of the best Medicare Part D plans and the best Medigap plans.