10 Steps to Compare Medicare Advantage Plans

Many people choose Medicare Advantage plans that are too expensive and don't offer the right coverage. You could save money - possibly thousands per year - on your health insurance by comparing Medicare Advantage plans and finding one that has, for example, good customer service, a large doctor network or prescription coverage.

Side-by-side comparison of Medicare Advantage plans

The average cost of Medicare Advantage plans ranges from $0 to $131 per month depending on the company you choose.

Consider your current provider to see how its overall prices and quality ratings compare to other insurers. For example, if you currently have Oscar, switching to Cigna could give you a plan that's much better quality for only a few more dollars per month.

1. Start with a list of Medicare Advantage plans and providers in your area

In 2023, each eligible person has an average of 22 Medicare Advantage plans to choose between, but the list of plans and their costs changes by county.

To discover what plans are available near you, use the Medicare Plan Finder or request personalized quotes from insurers or brokers.

It's not just the insurance companies that change by location. The cost of plans and their benefits can change too.

For example, Medicare Advantage plans in Florida cost an average of $12 per month, and AARP/UnitedHealthcare is a good choice because of its widely available free plans and large network of medical providers. On the other hand, it costs an average of $39 per month for a Medicare Advantage plan in New York, and Humana provides the best combination of low cost and good quality.

2. Exclude any plans that don't include prescription drug coverage

Start narrowing down your options by only looking at Medicare Advantage plans that cover prescription drugs.

With Medicare Advantage, most people can't add on a stand-alone prescription drug plan through Medicare Part D. To get prescription drug coverage, you usually need to bundle it with your medical coverage.

Prescription drugs can be expensive, costing hundreds or thousands of dollars per month. It's a good idea to only compare plans that include prescription drug coverage. On average, this will eliminate about four plans from your available options, helping you to start focusing on the best plans.

3. Determine if you qualify for a Special Needs Plan (SNP)

A Special Needs Plan (SNP) is a type of Medicare Advantage plan designed for people in specific situations, such as those who live in a nursing home, have a medical condition like cancer or have a low income. If you qualify for an SNP, this plan will usually give you the best coverage.

Types of Special Needs Plans

An SNP will cover all of the same Medicare services as other plans, but there could be expanded coverage based on the type of plan.

For example, all Medicare Advantage plans cover some level of skilled nursing facility care, but an Institutional SNP will provide better coverage for these services. Similarly, all Medicare Advantage plans will cover treatments for heart disease. But those who meet the criteria for a Chronic Condition SNP (C-SNP) could have access to more providers who specialize in the condition and have better coverage for relevant medications.

4. Compare monthly costs for the plan to your expected medical costs

On average, a Medicare Advantage plan costs $28 per month in 2023. But you'll usually be able to find plans for less. Most people in the country have access to $0 Medicare Advantage plans. With these plans, you won't pay anything on top of the cost of Original Medicare.

The goal is to find a Medicare Advantage plan that has the right balance of affordable monthly costs and good medical benefits.

The health insurance rule of thumb is that more expensive plans usually have better benefits, making them a good choice if you have significant health care needs. A cheaper plan will save you money each month, but you could pay more each time you need medical care.

When comparing plans, look at the copayments for the treatment you expect to need such as the cost for specialist visits, MRIs or joint replacement surgery. Also, compare plans by their structural benefits, including the deductible and out-of-pocket maximum, to see how much you could have to spend during the policy year.

Let's look at two situations to compare how an expensive or cheap Medicare Advantage plan would function.

Scenario: Significant health care needs

For someone who expects to need frequent medical treatment or expensive medical procedures, paying more for a plan can help them save overall.

In this example, let's assume you need an expensive surgery that costs $30,000 in total, and your portion of the medical bill would be $6,000. Plan A, a typical cheap plan, costs $0 per month, has a $500 deductible and has an out-of-pocket maximum of $5,000. Plan B, which is more expensive, costs $25 per month, has a $250 deductible and has an out-of-pocket maximum of $3,000.

By paying $25 more per month with Plan B, you would pay less overall if you needed surgery, saving $1,700 that year. That is because the more expensive plan has a lower out-of-pocket maximum, which caps the amount you pay for in-network health care, an important benefit for those who expect to need expensive procedures.

Scenario: Low health care needs

On the other hand, if you expect to only need routine or moderate amounts of health care, a cheaper plan could be a better deal. In this situation, choosing the more expensive plan would mean being over-insured with more coverage than you need.

Compare the same two plans for a scenario where you go to the doctor five times a year and have $100 in miscellaneous health care costs for tests or treatment.

In this situation, paying more for a health plan wouldn't be worth it because you wouldn't spend enough on health care to reach the deductible.

You'll choose your coverage based on the amount of care that you expect to need. If you end up needing more or less medical care than you expect, you'll still have coverage. The difference is that you won't be getting the best possible deal.

5. Consider the cost of prescription drugs

In addition to comparing plans by their medical benefits, you should also compare plans based on the cost of the medications that you currently take.

The prescription drug portion of your Medicare Advantage plan will usually have its own set of benefits. This can include a drug deductible, which is separate from the medical deductible, and drug copayments for different tiers of medication. You'll also have to consider the plan's drug formulary to find out which drugs are covered.

Compare coverage based on total annual costs. The insurance rule of thumb applies here too, and those who spend a lot for prescription drugs may be able to get a better deal overall by paying more for a policy that has better benefits.

6. Choose your plan type based on your network preferences

The type of plan you choose will affect your coverage and your costs, and network restrictions are a key disadvantage of Medicare Advantage plans.

For example, an HMO plan will usually be a cheaper option, but your coverage is limited to the doctors and facilities that are in the plan's network. In contrast, paying more for a PPO plan will give you the option to get out-of-network health care if you're willing to pay a higher rate.

By comparing the plans by their type of coverage, you'll see how much more you'll have to pay if you want access to out-of-network providers. This can help you decide if it's worth it.

7. Check the list of in-network doctors and providers

No matter what type of plan you choose, it will usually cost more to get medical care from providers that are outside of the plan's network. This means you can save money if the Medicare Advantage plan has a network that includes the doctors and hospitals that you intend to use and live nearby.

While Original Medicare has a very large network that includes most of the doctors in the country, Medicare Advantage plans have a network that's determined by the insurance company.

For example, Blue Cross Blue Shield has one of the largest networks overall and has affiliations with 90% of the country's doctors and hospitals. In contrast, Kaiser Permanente's network is focused on Kaiser health facilities, with a network of just 80,000 physicians and nurses.

8. Look at the extra included benefits

A Medicare Advantage plan bundles coverage across the standard categories of hospital care, medical care and prescription drugs. However, many Medicare Advantage plans also include extras. Options can include:

The value of these add-ons can add up. For example, rather than spending an extra $25 per month on dental insurance, those benefits could be included in your Medicare Advantage plan. That could save you $300 per year because you wouldn't have to enroll in a separate plan.

These add-ons provide tangible value to the bundle of coverage that you get through Medicare Advantage. However, you should first narrow down your plan options based on health benefits before weighing the add-ons.

Many insurance marketing materials will push these add-ons. However, the financial benefit from the add-ons is usually much less than the value of having good benefits for medical care and prescription drugs. In other words, make sure the plans you're considering have good coverage for medical situations like a heart attack or a stroke. Then let perks like an included gym membership tip the scales with their extra value.

9. Compare Medicare star ratings

Medicare star ratings that display on Medicare.gov will help tell you how good or bad each plan is. Star ratings do not consider a plan's benefits such as deductibles or copayments. Instead, Medicare star rating calculations reveal more about the experience of having the plan.

The 40 measurements combined into the overall star ratings include customer satisfaction, the number of complaints, the appeals process, access to preventive care, if common prescriptions are affordable and more.

A plan with a good star rating is not necessarily more expensive, and there are 5-star Medicare Advantage plans that cost $0 per month. In fact, if a 5-star plan is available in your area, you can switch to it at any time, even if it's not open enrollment.

10. Consider provider reviews and trade-offs

With most Medicare Advantage plans, there's a trade-off with a plan having some great qualities while falling short on others.

Insurance reviews can help you to quickly understand these trade-offs so that you can choose the best coverage for your needs and priorities. For example, consider some of the pros and cons of Medicare Advantage plans from these top companies.

Frequently asked questions

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Methodology and sources

Medicare Advantage cost data and star ratings were sourced from the Centers for Medicare & Medicaid Services (CMS) public use files. Average costs are based on plans that include prescription drug coverage. Our analysis excludes employer-sponsored plans, Special Needs Plans, PACE plans, sanctioned plans and Health Care Prepayment Plans (HCPPs). The rate of savings is based on the inflation-adjusted average savings as a percentage of the average plan cost. Additional sources include Medicare.gov and the Kaiser Family Foundation.