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Medicare Annual Open Enrollment: 6 Steps for Picking the Best Plan

Lisa Zamosky

With all the media attention on Obamacare, it's easy to overlook the annual open enrollment period for the nation's more than 55 million Medicare beneficiaries, which runs from Oct. 15 through Dec. 7.

Now is the time to switch Medicare Advantage and stand-alone Part D prescription-drug plans. You can also drop your private plan and go back to Original Medicare.

Each year, both Medicare Advantage and Part D plans make changes to their benefits, cost-sharing, provider networks and monthly premiums, says David Lipschutz, senior policy attorney with the Center for Medicare Advocacy. That means the plan that best served you in 2016 may not be the same one in 2017 -- particularly if your health needs have changed during the year. "It's incumbent upon individuals to take a look at what they have now and how that plan might be changing next year," Lipschutz says. "If that doesn't meet their needs, they'd be well-served to shop around."

Here are six steps to take during Medicare's annual open enrollment period to make sure you're covered by the plan most likely to meet both your medical and financial needs:

1. Fight inertia, plan to shop. Most people are inclined to sit-out open enrollment. According to a recent analysis by the Kaiser Family Foundation, roughly 8 in 10 people enrolled in a Part D or Medicare Advantage plan stick with the same policy from one year to the next. That may be the path of least resistance, but it's probably not the cheapest. "Fewer than 1 in 10 people are in the plan that gives them the best cost of ownership," says Nate Purpura, vice president of consumer affairs with the online insurance broker eHealth, Inc.

Last year, eHealthMedicare.com found that people willing to switch policies to one that offered better coverage for their particular drug regimen saved roughly $600 on prescription drug costs when they switched Part D plans. Savings jumped to more than $1,000 for those who changed their Medicare Advantage plans.

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2. Start by looking for changes. By now, you should have received an Annual Notice of Change from your insurer. This document will list upcoming changes to your existing coverage, such as the cost of premiums and co-pays, and show a comparison of the plan between this year and next. "The lowest-level intervention is to just take a close look at the Annual Notice of Change your plan has sent you," says Casey Schwartz, senior counsel for education and federal policy with the Medicare Rights Center. "It's a way to make sure there's nothing about your plan you rely on that is changing."

Still, if that's all you do, you may miss out on savings. "There's a lot of movement in the market, so it's more important this year than any other year to shop," says Joe DeLuca, director at eHealthMedicare.com.

In 2017, there will be nearly 20 percent fewer stand-alone Medicare Part D drug plans available nationwide, according to HealthPocket Inc., a technology company that compares and ranks health plans. If yours is among the plans leaving the market, you'll need to take action to replace it.

3. Evaluate all plan costs. In 2017, premiums for stand-alone drug plans will average $53.22 (less than $1 more than in 2016). Deductibles -- the amount you'll pay before your plan kicks to help cover your medication costs -- will average $227.43, just $10 more than this year.

With Medicare Advantage plans, the average premium is actually dropping slightly for 2017 by about 4 percent, according to the consulting firm Avalere. Nearly 1 in 3 plans will have a $0 premium.

But to figure out which plan will best meet your needs, look beyond averages. "People don't look into other options because they hear overall costs [may be] going up, but they should because there might be a better priced plan for them," Schwarz says.

Finally, be sure to evaluate each plan's out-of-pocket costs, including deductibles, copays and coinsurance. "Don't go by premium alone, which a lot of people do," Lipschutz says. "Oftentimes, lower premiums will mean higher deductibles or other out-of-pocket costs when using services."

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4. Look for your doctor. More than half of all seniors say keeping their doctor is their No. 1 priority when it comes to Medicare, Purpura says. So if your doctor is important to you, make sure he or she accepts the plan you want to enroll in. "It's critical to make sure your doctor accepts your Medicare coverage," he says. "If your doctor is out-of-network or doesn't participate in Medicare, you'll face significantly higher costs for routine doctor visits and other types of care."

5. Take a close look at coverage for prescription drugs. Reviewing each plan's formulary, or list of covered drugs, is critical because the cost of drugs is likely to be among your biggest health care expenses during the year. "Most of the time and for most people, when all of your drugs are on the formulary, that will be the least expensive plan," Schwarz says.

And pay close attention to the list of pharmacies in a plan's network. You'll pay less when you fill prescriptions at a pharmacy listed as offering "preferred cost sharing."

"Another way [insurance companies] control costs is to narrow the network of pharmacies," says Ron Bolding, president and chief executive officer of Inter Valley Health Plan. "Check carefully to make sure the pharmacies that participate are convenient."

[See: How to Pick a Health Insurance Plan.]

6. Take advantage of free resources. There are tools and professionals available to help you choose the best Medicare Advantage and Part D plan for your needs. The Plan Finder tool on Medicare.gov will give you a sense of what your estimated drug costs will be for the year for each plan. Plan Finder will also show you the number of stars a plan has received -- a measure of Medicare's quality rating system, which ranks both Medicare Advantage and Part D drug plans from one to five stars.

eHealthMedicare.com also offers a tool that helps direct you to plans most likely to cover your drugs and save you money.

For free personalized counseling services, you can also reach out to your State Health Insurance Assistance program. Find yours at shiptacenter.org or call 1-800-677-1116. The Medicare Rights Center also has a national helpline, which can be reached at 1-800-333-4114.

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