If you’re 65 or older, by now you should have received your annual installment of the official U.S. government Medicare handbook, Medicare & You 2025. Your mailbox is also probably full of Medicare-related flyers from insurance companies trying to win your business.   

The annual open enrollment period for Medicare started on October 15 and lasts until December 7. It is the one time every year that Medicare beneficiaries have an opportunity to modify their Medicare coverage. During the open enrollment period, you can switch or add a Medicare Advantage plan, switch or add a Part D prescription drug plan, and in some states, like Massachusetts, switch or add a Medigap plan. Any changes you make take effect on January 1 of next year.   

You should not assume that the plan you have now will be the best plan for you next year. Premiums, benefits and coverage all change, so you need to determine the best plan for you every year.  

Note: Medicare Advantage users have an additional Medicare Advantage open enrollment period, from January 1 through March 31 each year, during which users can switch Medicare Advantage plans or disenroll from their current plan. It’s sort of like a second look. You can also switch to a five-star-rated Medicare Advantage plan once per year outside of the open enrollment periods.   

This blog post cannot cover everything that you will find in the 128-page Medicare & You 2025 publication, but we’ll cover the basics to give you a general understanding of Medicare and your options during the open enrollment period. Some 2025 amounts have not been issued yet, and we have noted the prior year amounts where that is the case. 

Medicare in General  

Navigating Medicare and all its parts can be confusing, mainly because of the difficulty in understanding the differences between Medicare Part C, aka Medicare Advantage, and Medigap, aka Medicare Supplement Insurance. Let’s begin with a summary of each part of Medicare. 

Part A: Covers the cost of inpatient care in hospitals, skilled nursing facilities, and hospice and home health care. Part A coverage is free if you (or a current or former spouse) paid Medicare taxes for 40 or more quarters while you were working. If you did not, the monthly premium for Part A ranges from $278 to $505 in 2024. The deductible for Part A is $1,676 in 2025, and then you pay coinsurance for additional days spent in the hospital, at a skilled nursing facility, or while in hospice or using home health care.   

Part B: Covers the services necessary to diagnose and treat medical conditions, including doctors’ visits, outpatient care, emergency department care, preventive care, and vaccinations. The standard premium in 2025 is $185/month but could be higher if you are subject to an income-related monthly adjustment amount (IRMAA) surcharge or late enrollment penalty. The deductible for Part B in 2025 is $257. After you meet the deductible, you pay 20% coinsurance on the Medicare-approved amount for the coverage that you receive.   

 Medicare Advantage is Medicare Part A and Part B, and typically Part D, rolled into one plan administered by a private insurance company. In Part C, the Part A and Part B deductibles and coinsurance are replaced with the private insurance company’s own deductibles, copays, coinsurance, and out-of-pocket limits.    

Part D: Covers prescription drugs. Premiums vary based on the insurer providing the coverage and the plan selected (covered later), and you could be subject to an IRMAA surcharge. The deductible for Part D varies by plan but will not exceed $590 in 2025. After you have paid the deductible, you will start paying copays for your prescriptions. Important and new for 2025: covered Insulin costs are capped at $35/month, and no senior will pay more than $2,000 per year for their covered Part D drugs. You may find fewer insurers offering coverage due to this limitation. Please be aware that the new $35 insulin cap and $2,000-per-year cap do not apply to drugs provided as part of outpatient care, such as drugs administered at a dialysis facility or certain cancer drugs (e.g., orally administered chemotherapy). The yearly cap also only applies to drugs covered by Medicare. Not all generic drugs are covered, so an individual’s drug costs can easily exceed $2,000. 

Another important fact is that noncovered pharmacies are not subject to the above caps. Whether your pharmacy is covered can change year to year. Do your research! 

Medigap.

Medigap coverage is aptly named, because it fills the deductible and coinsurance gaps of Medicare Part A and Part B. Most states offer 10 Medigap plans, while some other states, like Massachusetts, have just three plans.   

Medicare Advantage

Medicare Advantage Plans (Medicare Part C) Overview 

Medicare Advantage is a Medicare-approved plan from a private insurance company that offers an alternative to original Medicare for your health and drug coverage. These “bundled” plans include Part A, Part B and usually Part D. Plans may have lower out-of-pocket costs than Medicare Part A and Part B, but if you enroll in a Medicare Advantage plan, you will need to use doctors and medical providers that are in the plan’s network and may need a referral to see a specialist. Medicare Advantage plans may also offer some extra benefits that don’t come with Part A and Part B, like vision, hearing, and dental services.   

Some Medicare Advantage plans are health maintenance organization (HMO) based, while others are HMO point of service (HMO-POS), preferred provider organization (PPO), or private fee-for-service (PFFS) based. The differences between these types of plans are beyond the scope of this blog post. When selecting the type of plan you want, be sure you’re okay with the network and its coverage area, requirements for preapproval and approvals from a primary care physician, and out-of-network coverage rules.   

Medicare Advantage plans can look attractive to healthy people who are new to Medicare and who don’t think they’ll need much medical care. However, as you get older, you may require more medical care, and the cost of these plans can increase and become unpredictable because you’re subject to coinsurance amounts up to the annual out-of-pocket limits, which can be significant and comparable to individual health plan amounts. 

Zero-Premium Advantage Plans

If you’re searching for Advantage plans, you may find some plans have very low or no premiums. How is this possible? Medicare pays insurance companies up to $1,000 per month to have them manage your health care needs, so insurance companies have an incentive to entice you to join their plan with low or no premiums. Even if you choose a zero-premium Medicare Advantage plan, you will likely still have to pay the Part B premium, as well as the Part A premium if you don’t have premium-free Part A.   

Not all doctors, specialists, and hospitals accept these plans. Your plan can be canceled at any time. You are subject to copays and other usage costs. The total out-of-pocket maximum is $9,350 per year in-network in 2025 ($14,000 out of network).  

These plans are also ending. Humana, Cigna, and CVS/Aetna have made significant Medicare Advantage service reductions for 2025. 

You cannot switch from Medicare Advantage to Medigap in most states (except MA, CT, ME, and NY). 

Medicare Advantage plans are aggressively marketed. Medicare pays three times more in commissions to brokers to sell an Advantage plan than to sell a Medigap plan. 

In fact, some members of Congress have proposed renaming Medicare Advantage as “Alternative Private Health Plan” to eliminate confusion. Medicare Advantage is not Medicare.  

Medicare Advantage Open Enrollment

If you are covered by a Medicare Advantage plan (or want to be covered by one), during open enrollment you can review all the Advantage plans that are available to you where you live. You can go to the Medicare Plan Finder to review the Advantage plans available in your area.    

Medigap

Medigap Overview  

A Medigap policy is coverage administered by private insurance companies. It helps fill the gaps in coverage of Medicare Part A (hospital insurance) and Part B (medical insurance). These costs include deductibles, copayments, and coinsurance for medical services. There are currently 10 different standardized Medigap plans (see chart below), and each one covers different types of costs. Not all insurance companies offer each type of plan, and the most popular are Plans G and N, which account for most of all traditional Medicare supplement plans sold.   

Massachusetts has three Medigap plans: Core Plan, Supplement 1, and Supplement 1A. Supplement 1A is like Plan G. 

To purchase a Medigap policy, you must have Medicare Part A and Part B. Different companies charge different premiums for the exact same coverage. As a result, once you determine which Medigap benefits you want, you can determine which policy you’ll buy based on the company and price.   

Medigap plans offer cost predictability, because if you choose Medigap Plan G, all out-of-pocket costs except for the Part B deductible of $257 (for 2025) are covered. So your total out-of-pocket costs for a given year are limited to the plan premiums plus $257. This also includes any excess charges that private medical providers that do not accept Medicare can charge (limited to 15% above Medicare rates).  

With Medigap plans, there is no network and no requirement for referrals, so you can get medical care from any public hospital in the country and from most private hospitals. This is especially important for patients who travel (think snowbirds) or want to seek medical care in areas that would be out of network with their Medicare Advantage plan. Medigap plans are portable and can be continued if you move to a new state.   

Medigap plans do not include prescription drug coverage, so you will also need to purchase a stand-alone Part D prescription drug plan.   

Chart taken from the Medicare & You 2025 guide  

_{* Plans F and G also offer a high-deductible plan in some states. With this option, you must pay for Medicare-covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of $2,800 in 2024 before your policy pays anything. (You can’t get Plan C or F if you were new to Medicare on or after January 1, 2020.)}  

_{** For Plans K and L, after you meet your out-of-pocket yearly limit and your yearly Part B deductible ($257 in 2025), the Medigap plan pays 100% of covered services for the rest of the calendar year.}  

_{*** Plan N pays 100% of the Part B coinsurance. You must pay a copayment of up to $20 for some office visits and up to $50 for emergency room visits that don’t result in an inpatient admission.} 

Medigap Plan Open Enrollment

Only in specific and limited circumstances do you have a guaranteed issue right to purchase a Medigap policy, which means that you might not be able to change Medigap policies during open enrollment. This means that the policy you purchase during your Medigap open enrollment period when you turn 65 may be the policy you have for the rest of your life.   

The best time to buy a Medigap policy is during the Medigap open enrollment period, which begins on the first day of the month in which you are 65 or older and enrolled in Part B. If you do try to switch during the annual Medicare open enrollment period, you will likely be subject to medical underwriting. However, it does not hurt to weigh your options if you want to switch to Medigap from Medicare Advantage or switch Medigap plans.  

In Massachusetts, where Medigap plans are called CORE, Supplement 1, and Supplement 1A, residents have an annual opportunity to enroll in Medigap with guaranteed issue. This special rule is only available in Massachusetts, Connecticut, and New York. In Massachusetts it is available from February 1 to March 31 every year. Premiums for Medigap policies are community rated, which means that all members of each plan pay the same premiums. The premiums are not reflective of age.   

As mentioned above, in most states you cannot switch Medigap plans after the Medigap open enrollment period without going through medical underwriting, which means that there is no guaranteed issue. Other reasons you may be eligible for guaranteed issue include if your Medicare Advantage plan discontinues coverage in your area, if you move to an area where your Medicare Advantage plan has no coverage, and if your Medigap or Medicare Advantage plan goes bankrupt.   

Part D

Part D Prescription Coverage Overview 

Medicare Part D is drug coverage provided and administered by private insurance companies. Part D covers brand-name and generic prescription medication and insulin. Each plan determines the medications it will cover and the costs associated with each medication.   

Part D Open Enrollment

Your first consideration when selecting a Part D plan is to see whether the plan covers the medications that you need. You want to look at the plan’s coverage rules, specifically the quantity limit and need for prior authorization. Check out the plan’s network of preferred pharmacies because you will likely pay less for medications dispensed at a preferred pharmacy than you will at a standard network pharmacy.   

Next, look at all the plan costs, including the monthly premiums, deductibles, copayments, and coinsurance. You will also want to understand whether the plan will require you to use generics, even if you know the brand-name or specialty drug is more effective for you personally. Finally, check to see whether your doctor will need prior authorization from the insurance company before writing the prescription. This administrative requirement may disrupt your regular usage of a particular drug.   

It is also important to note that even if you do not take medications, you should still consider enrolling in a Part D plan. If you do not, you will be assessed a late-enrollment penalty if/when you next sign up for a Part D plan. The penalty is a surcharge of 1% for every month that you were eligible but not covered.   

Comparing Plans

The best resource for comparing Medicare Advantage and Part D prescription drug plans is the Medicare.gov Plan Finder. When using the tool, you’ll want to collect information related to the prescription drugs and the pharmacies that you use because this drives a large portion of your out-of-pocket costs. You also need the dosage and frequency of ALL the prescriptions, because the more accurate you are with this information, the more precise the estimate of your out-of-pocket costs will be.   

You do not want to assume that the Medicare Advantage or Part D prescription drug plan that you have this year is going to be the best plan for next year. Any part of the plan, including the premiums, deductibles, copays, coinsurance, out-of-pocket limits, and prescription drug coverages, can change from year to year, so you have to do your homework and review your options each year. 

It is important to remember that your health coverage preferences are unique and a plan that works for you may not work for someone else. You need to evaluate plans and coverage based on your own individual health, lifestyle, health care usage, preferences, and ability to pay premiums.   

You may also want to look at each plan’s star ratings, which indicate the overall satisfaction of current and past plan participants.   

We suggest you meet with a qualified Medicare representative along with your financial advisor to determine which Medicare plan is right for you.  

Although there is a lot to consider regarding Medicare, you don’t have to do it alone. If you need assistance with your Medicare planning or retirement planning in general, please reach out to our team.  You can also learn more information about this year’s Medicare changes at our recent webinar with Medicare consultant Marcia Mantell.