Medicare plan comparison guide — making the annual enrollment decision

Reviewed by Dr. Carol Whitfield, MD, Board-Certified Geriatrician

Comparing Medicare plans means looking at total annual cost (premiums plus deductibles plus copays plus drug costs), not just the monthly premium. Run your parent's actual medications through Medicare.gov's plan comparison tool, verify that their doctors are in-network, and make this comparison every year during open enrollment because formularies and networks change annually.

Every fall, Medicare sends notices about plan options and changes. Premiums shift. Drug formularies change, meaning which medications are covered and what they cost. Doctor networks expand or contract. It's easy to ignore all of it, keep the same plan, and hope for the best. It's also easy to miss hundreds or thousands of dollars in savings, or to end up with worse coverage than you could have had.

According to CMS, more than 65 million Americans are enrolled in Medicare, and the majority don't compare plans during open enrollment. The process feels overwhelming because Medicare is genuinely complex. But the actual decision-making is manageable if you focus on the right questions: how much will you pay in total across the year, and are the doctors and drugs your parent uses covered?

Original Medicare Versus Medicare Advantage

Original Medicare is the traditional program. Part A covers hospital care. Part B covers doctor visits and outpatient care. You can see any doctor in the country who accepts Medicare. You pay the costs Medicare doesn't cover (deductibles, copays, coinsurance) unless you have supplemental coverage.

Medicare Advantage is an alternative run by private insurance companies. These plans must cover everything Original Medicare covers, but they operate through networks. You typically have a primary care doctor, need referrals to see specialists, and are limited to in-network providers. Premiums are often lower, and many plans include extras like dental, vision, and hearing coverage that Original Medicare doesn't offer.

Which is better depends entirely on the situation. If your parent travels frequently or values the freedom to see any doctor anywhere, Original Medicare is usually the better fit. If they have a primary doctor they like, don't mind a network structure, and want dental and vision included, Medicare Advantage might save money. The decision isn't permanent: you can switch during annual enrollment.

Prescription drug coverage is built into most Medicare Advantage plans. With Original Medicare, you need a separate Part D plan for drug coverage, which means another premium and another set of rules.

Understanding Prescription Drug Coverage

This is where careful comparison makes the biggest financial difference. Two plans that look similar on paper can cost hundreds of dollars differently based on the specific medications your parent takes.

Start by listing every medication your parent takes with exact names, doses, and frequencies. Then look up each drug in each plan's formulary, which is the list of covered medications. Is each drug on the list? If a needed medication isn't covered, that plan may not be workable regardless of how good the rest of it looks.

Coverage tiers matter. Preferred drugs have lower copays. Non-preferred drugs cost more. Some require prior authorization, meaning the doctor must get insurance company approval before the pharmacy will fill it. Some have quantity limits. These details affect the real cost of each plan.

The deductible is what you pay before the plan starts paying for drugs. If the deductible is $500 and monthly drug costs are $40, your parent pays full price until they've spent $500 total. After that, the plan's copay structure kicks in.

Watch for the coverage gap (sometimes called the donut hole) if your parent has high drug costs. After you and the plan have spent a certain combined amount on drugs, you enter a gap where you pay a larger share of costs. Then, after reaching the catastrophic coverage threshold, your costs drop significantly. The specific dollar amounts change each year and vary by plan. For someone taking expensive medications, the gap rules dramatically affect total annual cost.

The most useful thing you can do is run your parent's actual medications through the plan comparison tool on Medicare.gov. It calculates the real out-of-pocket cost for each plan based on the exact drugs they take. Real numbers beat general principles every time.

Supplemental Coverage: Medigap

If your parent has Original Medicare, they likely also have a Medigap plan (supplemental insurance). Medigap covers costs that Original Medicare doesn't: deductibles, copays, and coinsurance. There are ten standardized Medigap plans, labeled A through N, with Plan G and Plan N being among the most popular.

When comparing Original Medicare options, the real cost is the Medicare Part B premium plus the Medigap premium plus the Part D drug plan premium, plus whatever deductibles and copays they'll actually face based on their usage. Looking at any one of those numbers in isolation is misleading.

If someone is considering switching from Medicare Advantage to Original Medicare with Medigap, the cost structures are different even when the totals are similar. Advantage plans tend to have lower premiums but higher out-of-pocket costs when you use care. Medigap has higher premiums but covers most out-of-pocket costs. For someone who uses a lot of medical services, Medigap often comes out ahead financially despite the higher premium.

Evaluating Networks and Providers

If looking at Medicare Advantage plans, verify that every doctor your parent sees is in-network. A plan that looks affordable becomes expensive or unusable if your parent's longtime cardiologist isn't in the network. Look up each provider individually; don't rely on a general assurance that "most doctors" participate.

Check hospitals too. If your parent has a preferred hospital or one they've been treated at before, make sure it's in-network.

Ask about specialist referrals: are they required, how easy are they to get, and how quickly can your parent see the specialist after a referral?

Why Annual Review Matters

Premiums change every year. The Part B premium may increase. Medigap premiums rise. Plan costs shift. A plan that was the cheapest option this year might be expensive next year. According to CMS, Medicare Advantage plan availability and costs change annually, with plans entering and exiting markets each year.

Formularies change too. A drug covered this year might be dropped next year, or its copay tier might change. If your parent takes medications that are at risk of formulary changes, or if they've been prescribed a new expensive drug, checking coverage annually prevents a January surprise.

Deductibles and out-of-pocket maximums reset every January 1st. Someone who's already met their deductible in December starts fresh in January. If high-cost procedures are coming, the timing relative to the calendar year can affect total out-of-pocket costs.

Special Situations

Life changes can trigger special enrollment periods outside the annual window. Losing coverage, getting married, moving to a different state, or experiencing a major income change may all qualify. If any of these apply, ask about special enrollment rather than waiting for the next open enrollment period.

If income is low, your parent might qualify for Extra Help (subsidies for prescription drug costs) or for Medicaid to supplement Medicare. These programs can lower costs significantly. It's worth checking eligibility even if you think income is too high to qualify.

The Actual Comparison Process

Create a simple spreadsheet listing each plan option. For each plan, record the monthly premium, the annual deductible, copays for regular doctor visits and specialist visits, and the out-of-pocket maximum. Then estimate the real costs based on how often your parent actually sees doctors and what procedures are likely in the coming year.

Run their medications through Medicare.gov's drug cost calculator. Add the drug costs to the other costs. That gives you the true total annual cost for each plan.

Plans that look expensive at first glance sometimes turn out cheaper once you factor in real usage. Plans that look cheap on the premium line sometimes become expensive once you add medications and out-of-pocket costs. The total number is what matters, not any single component.

This review takes an hour or two, and the savings can be substantial. For someone you're helping manage Medicare, spending that time during open enrollment each fall is one of the highest-return investments of your caregiving effort.

Frequently Asked Questions

When is Medicare open enrollment, and what can I change?
The Annual Election Period runs from October 15 to December 7 each year. During this window, you can switch from Original Medicare to Medicare Advantage or vice versa, change Medicare Advantage plans, or change Part D prescription drug plans. Changes take effect January 1.

What's the easiest way to compare plans for my parent's specific situation?
Medicare.gov's Plan Finder tool. Enter your parent's zip code, current medications, preferred pharmacies, and doctors. It calculates estimated annual costs for each available plan. This is the single most useful comparison tool available.

Should my parent stick with Original Medicare or switch to Medicare Advantage?
There's no universal answer. Original Medicare with a Medigap supplement gives maximum provider choice and predictable out-of-pocket costs, but premiums are higher. Medicare Advantage often has lower premiums and includes extras like dental and vision, but limits you to a network and can have higher costs when you need significant care. The right choice depends on your parent's health, doctors, medications, and financial situation.

What happens if my parent's medication isn't covered by the plan we chose?
They can ask their doctor to file an exception request with the plan, requesting coverage of the specific drug. If denied, they can appeal. They can also ask the doctor about therapeutic alternatives that are on the formulary. During the next open enrollment, switching to a plan that covers the medication is the longer-term solution.

Is there free help available for comparing Medicare plans?
Yes. Every state has a State Health Insurance Assistance Program (SHIP) that provides free, unbiased Medicare counseling. SHIP counselors can help compare plans, explain coverage, and assist with enrollment. Find your local SHIP through Medicare.gov or by calling 1-800-MEDICARE (1-800-633-4227).

Can my parent switch plans if they're unhappy after January 1?
There's a Medicare Advantage Open Enrollment Period from January 1 to March 31 that allows switching between Medicare Advantage plans or dropping Advantage to return to Original Medicare. Outside of that, changes generally require a qualifying life event or waiting for the next Annual Election Period.