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Here’s why you should shop around for the best Medicare plan right now

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Abe Wischnia

Special features columnist

Ben Franklin famously said, “A penny saved is a penny earned.” How about saving nearly $1,000? That’s how much my wife’s sister-in-law saved just by comparing Medicare prescription drug plans. 

If this were an advertising scam, the headline might say, “Click here to find out how she earned $1,000 in less than an hour.”

But this isn’t some kind of advertising sales come-on. There is a real way to save money on your annual Medicare costs that most people overlook: shopping around for the best plan. 

Medicare’s annual enrollment period allows you to change plans and save money

From Oct. 15 through Dec. 7, 2022, Medicare has its annual enrollment period. That’s when Medicare beneficiaries can elect to make changes to their prescription drug coverage. The changes become effective on Jan. 1.

Leading up to the annual enrollment period, Medicare drug plans are required to send out their “annual notice of change” in September. It lays out whether and how much their premiums, co-pays, deductibles, and formularies (the list of the drugs covered by a plan) will change with the new calendar year. Generally speaking, those costs go up. That notice of change should be a Medicare beneficiary’s trigger to compare coverage choices.

Very few Medicare beneficiaries take time to compare

Unfortunately, according to a survey by the Kaiser Family Foundation, fewer than three out of ten people enrolled in a Medicare stand-alone prescription drug plan compared the costs of their plan’s drug coverage with the drug coverage offered by other plans in their area. 

Most people don’t compare drug plans because they think it doesn’t matter. For many, figuring out which plan is best can seem overwhelming. 

That’s because most Medicare enrollees have between 25 and 30 plans to choose from. They are all sold by private insurance companies which set their own premiums and co-pays. The monthly premiums for those plans vary dramatically. Depending on where you live the premiums range from a low of $4.50 to a high of $172.50 per month. The national average is a little over $33. Those premiums don’t include the costs for the drug co-pays. The cost of co-pays for the same drugs are all over the place. 

Then there are the deductibles which range from nothing to $505 per year. Some plans have a zero deductible with high premiums while others have a high deductible with a zero premium. 

I’ve known retired engineers who spent hours building complex spreadsheets and more hours trying to decide. But you don’t have to do that. There is a much easier and more reliable way.

So how should you shop around for a better Medicare plan?

Have you ever looked at the official Medicare website? That same Kaiser Family Foundation survey found that fewer than half of Medicare beneficiaries said they had ever visited the official Medicare website for information.

That’s unfortunate because the Medicare website has a lot of information to help you understand what it does and doesn’t cover. The Medicare site should be your first stop when you begin your search for a better plan.

Use the official Medicare drug plan finder

On the Medicare site, you will find the really useful Medicare health and drug plan finder that makes it easy to compare the total cost of premiums and co-pays for all of the prescription medications you take. 

There, you enter each of your prescription drugs along with the pharmacies near you. The website will then analyze the data provided by the various insurance companies and sort the plans from low to high by total annual out-of-pocket cost for premiums and co-pays. It will also show whether all of your meds are on a plan’s formulary, and whether there are any restrictions on a particular drug. 

The site makes it easy to compare plans to be sure they fit your needs. The process generally takes less than an hour, even if you take a lot of medications.

If you see a plan that can save you money, there is a link to sign up securely for the new plan via the Medicare website.

Spend a little time reviewing your Medicare Plan possibilities now and save money later

Our family member is one of those who did not compare in the past. Each year during this annual enrollment period, my wife would suggest she do so. However, our relative felt comfortable leaving things as they were. But now she’s fully retired and living on a fixed income. So this year she is more focused on saving money.

The drug plan finder showed that her current plan, which she has had for several years, will have a total out-of-pocket cost (premiums plus drug co-pays) in 2023 for her current prescriptions of $1,226.40. It also showed her that there is another plan available that covers all of her medications for a total our-of-pocket cost of $242.40 for the year. Especially on a retiree’s income, that’s a substantial savings. 

What if that was your money? Isn’t it better in your pocket than handing it to some insurance company? 

My wife and I are both on Medicare. Every year at this time, we use the Medicare plan finder on the Medicare website to compare drug plans for the next year. We’ve both changed plans several times and have saved money each time.

I can’t promise you will save as much as my wife’s sister-in-law. Depending on the prescription drugs you need, your savings might be less or they might be more. But you won’t know until you do the comparison.

Choose the best source of drug plan information

When you compare prescription drug plans, please be careful of the online information sources you use. If you just do an online search for Medicare drug plans or the plan finder, you’ll encounter links that are actually tied to insurance companies or insurance brokers, often representing a limited selection of plans. They are unlikely to give you full information about the plans that are available to you. Google requires that ads be labeled as such so be careful and don’t click on those links.

The one website you should trust for this information is the official Medicare site.

The Commonwealth Fund did a study of how insurance agents influence the choices made by Medicare beneficiaries. The study found that “The agent–plan model can limit plan choice in ways that are not obvious to beneficiaries.” 

Their analysis of online agent plan selection tools found that, on average, each online agent studied included less than two-thirds of Medicare prescription drug plans available in their areas.

If you really want to know what all of your choices are, use the Medicare.gov plan finder. If you need help with that, contact SHIP, your local State Health Insurance Assistance Program. SHIP provides unbiased help to Medicare beneficiaries, their families, and caregivers. It’s not affiliated with the insurance industry and the help is free.

One more thing: Please, please ignore the Medicare advertising blitz. It will only get more intense between now and Dec. 7. (Abe Wischnia for Consumer Rescue)

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Abe Wischnia

Abe Wischnia is a special features columnist at Consumer Rescue, focusing heavily on the Medicare system. His goal is to help seniors navigate the complex rules, coverage issues, plans, and premiums while also helping his readers steer clear of scams and fraud. Abe started his career as a television news reporter and newscaster. He later transitioned to roles as a senior public relations and investor relations executive for companies in technology and biotech. With degrees in journalism and an MBA, Abe has written for newspapers, television news and documentaries, magazines, and corporate publications.