Why Your Medicare Coverage Deserves an Annual Review

Once you have been on Medicare for a few years, it is easy to let your coverage roll over without giving it much thought. You chose your plan, it has worked reasonably well, and unless something has gone wrong, there may not seem to be much reason to revisit the decision.

But the plan you chose is not necessarily the same plan you will have next year. Medicare Advantage and prescription drug plans can change their costs, drug coverage, pharmacy arrangements, provider networks, and other benefits from one year to the next. At the same time, your own healthcare needs may have changed since you originally chose the plan.

That is why the annual Medicare Open Enrollment Period, which runs from October 15 through December 7, is a good time to take a look, even if you are happy with your current coverage. The point is not to find a new plan every year. It is to make sure the plan you are keeping still works for you.

Start With the Plan You Already Have

If you are enrolled in a Medicare Advantage or Medicare prescription drug plan, you receive an Annual Notice of Change each fall explaining what will be different in the coming year. It is the kind of paperwork that can be easy to skim or set aside, especially when you have been happy with your coverage and expect to keep the same plan.

But keeping the same plan does not necessarily mean keeping the same coverage. Premiums and deductibles can change, drugs can move to different tiers or be removed from a formulary, providers can leave a network, and copayments and coinsurance can increase. The plan may have the same name and still look different when you actually use it.

The numbers being reported for 2027 are a good example of why it is important to look past the headlines. The Centers for Medicare & Medicaid Services projects that the average Medicare Advantage premium will decline next year. That is welcome news, but an average says very little about what any one person will pay or receive under a particular plan.

A lower premium does not help much if one of your medications becomes more expensive, a specialist you see is no longer in the network, or your share of the cost rises when you need care. The Annual Notice of Change gives you a chance to identify those differences before the new plan year begins and decide whether the coverage you have still fits the way you actually use healthcare.

Take Another Look at Your Prescription Coverage

Even if your medications have not changed, your prescription costs can.

Medicare drug plans use formularies that determine which medications they cover and what you will pay for them. From one year to the next, a drug can move to a different cost-sharing tier, coverage requirements can change, and the pharmacy that was the least expensive place to fill a prescription this year may not be the least expensive next year.

Your prescriptions can change too. A plan that was a good fit when you originally selected it may look very different once you compare its coverage with the medications you take today.

That is why it is worth reviewing more than the monthly premium. What matters is how the plan covers the prescriptions you actually take, what you will pay to fill them, and whether those costs change depending on the pharmacy you use. A plan with a low premium can still be the more expensive choice once your prescription costs are taken into account.

Make Sure Your Doctors Are Still in the Network

If you are enrolled in Medicare Advantage, check whether your provider network is changing for the coming year. A doctor, specialist, hospital, or other provider that participates in your plan today may not necessarily be in the network next year.

Start with the providers you already use, but do not stop there. If you regularly see specialists, receive ongoing treatment, or have a medical condition that requires more specialized care, the hospitals and treatment centers you may need can be just as important as your primary care physician. Also check whether the plan requires referrals or prior authorization for the care you use. Finding out that a key provider is outside the network or that your care requires additional approval after you need it is very different from discovering it during Open Enrollment, when you still have an opportunity to evaluate your options.

Your healthcare needs may have changed since you originally selected the plan. Someone who needed very little medical care a few years ago may now see several specialists or receive ongoing treatment. The coverage that made sense then may not provide the same flexibility or access you want today.

Look Beyond the Monthly Premium

A Medicare Advantage plan can look inexpensive when you are healthy and use relatively little care. The differences between plans often become more apparent when you actually need healthcare.

Medicare Advantage plans set an annual limit on what you can pay out of pocket for covered Part A and Part B services, but those limits can vary by plan. Deductibles, copayments, and coinsurance can vary as well. Someone who sees a doctor only occasionally may barely notice those differences, while someone receiving regular treatment, seeing multiple specialists, or spending time in the hospital may experience them very differently.

When reviewing coverage, consider what the plan is likely to cost based on the healthcare you normally use as well as what you could pay in a year when you need considerably more care than expected. The plan that costs less in a healthy year will not necessarily be the one that costs less when you need it most.

Medicare Advantage and Medigap Are Different Decisions

Open Enrollment may also prompt you to reconsider the larger question of how you receive your Medicare benefits. Someone enrolled in Medicare Advantage may wonder whether moving back to Original Medicare, potentially combined with a Part D prescription drug plan and Medigap coverage, would provide a better fit.

That decision requires more care than switching from one Medicare Advantage plan to another. Leaving Medicare Advantage does not necessarily mean you will be able to purchase the Medigap policy you want. Outside your initial Medigap enrollment period and certain situations that provide guaranteed-issue rights, you may be subject to medical underwriting when applying for Medigap coverage, although some states provide additional protections.

Before making a change, it is important to understand whether the supplemental coverage you want will be available to you and what it will cost. You do not want to leave your current coverage based on an assumption about what you will be able to purchase afterward.

IRMAA Is Part of the Cost Too

Your Medicare plan is not the only thing determining what you pay for coverage. Higher-income Medicare beneficiaries may also pay IRMAA surcharges on their Medicare Part B and Part D premiums, and those additional costs are based on income rather than the plan you select.

That creates a connection between Medicare and decisions elsewhere in your financial plan. A Roth conversion, realized capital gains, or other additional income can potentially increase future Medicare premiums. That does not necessarily mean those decisions should be avoided. Paying more for Medicare in a future year may still be worthwhile if the financial decision that caused the increase improves your overall plan.

IRMAA is another cost to account for when evaluating a financial decision, not necessarily a cost that needs to be avoided. Looking at it alongside taxes, investment decisions, and retirement income provides a more complete picture of what a decision actually costs.

Staying Put Should Still Be a Decision

Reviewing your Medicare coverage every fall does not mean you should expect to change plans every year. In many cases, the review will confirm that the coverage you already have remains a good fit.

What matters is knowing that you are staying with the plan because you have looked at what is changing and decided it still works for you. Your prescriptions, doctors, healthcare needs, and costs can change over time, and so can the plan itself. Open Enrollment gives you an opportunity to make sure those pieces still line up before another year begins.

Your Medicare coverage may renew automatically. That does not mean the decision should be automatic.