Millions are about to choose the wrong Medicare plan

As the annual Medicare Open Enrollment period progresses, approximately 68 million Americans are facing a crucial deadline: December 7. This date marks the final opportunity for individuals over age 65 or those with major disabilities to review and select their Medicare health coverage for the upcoming year, with new plans taking effect on January 1, 2026. The decisions made during this critical window can significantly impact beneficiaries’ healthcare access, costs, and overall well-being throughout the next year.

Despite the profound implications of these choices, research from the University of Michigan (U-M) has consistently shown that a substantial portion of Medicare beneficiaries do not undertake the necessary steps during Open Enrollment. This inaction often leads to missed opportunities for cost savings, unnecessary administrative burdens, and heightened anxiety about healthcare coverage. Experts emphasize that proactive engagement and informed decision-making are paramount for optimizing Medicare benefits.

The Evolving Landscape of Medicare: A National Imperative

Medicare, a cornerstone of American social welfare policy, was established in 1965 to provide health insurance for Americans aged 65 and older, as well as younger people with certain disabilities and End-Stage Renal Disease. Over the decades, it has evolved into a complex system comprising several parts:

• Part A (Hospital Insurance): Covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Most people don’t pay a monthly premium for Part A if they or their spouse paid Medicare taxes through employment.
• Part B (Medical Insurance): Covers certain doctors’ services, outpatient care, medical supplies, and preventive services. Most people pay a monthly premium for Part B.
• Part C (Medicare Advantage): An alternative to Original Medicare (Parts A and B) offered by private companies approved by Medicare. These plans often include Part D prescription drug coverage and may offer additional benefits like dental, vision, and hearing.
• Part D (Prescription Drug Coverage): Helps cover the cost of prescription drugs. It is offered by private companies approved by Medicare and can be a standalone plan or included in a Medicare Advantage plan.
• Medigap (Medicare Supplement Insurance): Private insurance plans that help pay some of the healthcare costs that Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles.

The annual Open Enrollment period, running from October 15 to December 7, is designed to allow beneficiaries to reassess their coverage in light of changes to their health needs, financial situation, and the plans themselves. Each year, insurance companies adjust their offerings, including premiums, deductibles, formularies (lists of covered drugs), and provider networks. For the 68 million individuals currently enrolled in Medicare, comprising seniors and those with disabilities, this period is not merely a formality but a vital opportunity to ensure their health plan remains optimally aligned with their requirements. Failing to act typically results in automatic re-enrollment in the current plan, which may no longer be the most cost-effective or comprehensive option.

Leveraging Digital Tools for Empowered Decision-Making

One of the most powerful yet underutilized resources for Medicare beneficiaries is the official Medicare website, Medicare.gov. This platform offers a suite of intuitive and straightforward tools designed to help individuals understand their coverage options and explore plans available in their area. Despite the ease of access and the potential for significant savings and improved care, a recent U-M study highlighted that only 33% of people with Medicare utilized the internet to explore their options.

The choices available can be overwhelming. Many beneficiaries have dozens of plans to consider; nearly all have access to more than 10 Medicare Advantage plans, alongside multiple Part D prescription drug and Medigap supplemental plans if they opt for traditional Medicare. The sheer volume of options underscores the necessity of using comparative tools.

The Medicare Plan Compare site (medicare.gov/plan-compare) is the primary gateway for this essential research. Even in periods of government uncertainty, these critical plan-navigation tools remain operational, having been built prior to any potential shutdowns. Through this portal, users can:

• Identify Available Plans: See which Medicare Advantage and Part D prescription drug plans serve their specific geographic area.
• Compare Services and Drugs Covered: Understand the scope of services included and ascertain if their preferred medications are on a plan’s formulary.
• Analyze Costs: Compare monthly premiums, copayments, deductibles, and other out-of-pocket expenses associated with healthcare services and prescription refills.
• Assess Quality Ratings: Review plans’ overall "star ratings," which reflect past members’ opinions on quality and service, helping to gauge satisfaction levels.
• Check Current Plan Status: For those already enrolled in a Medicare Advantage plan, the tool confirms if their current plan will continue to be available next year, as some plans may be discontinued or merged.

A particularly impactful feature is the ability to enter specific prescription drug names and dosages to compare estimated costs across various Part D plans. This includes drug coverage embedded within Medicare Advantage plans and standalone Part D plans for those with traditional Medicare. U-M researchers have demonstrated that utilizing this prescription drug comparison tool can lead to substantial financial savings, even with the introduction of an annual cap on Medicare prescription costs in 2025.

Dr. A. Mark Fendrick, director of U-M’s Center for Value-Based Insurance Design, stresses the importance of this annual review: "Given changing clinical circumstances and the fact that insurance plan costs and benefits are often modified from year to year, it is very important that people with Medicare coverage use the available tools during Open Enrollment to identify a plan that best meets their medical needs and fits their financial situation." For those who require assistance navigating the Plan Finder site or setting up an account, seeking help from a trusted friend, family member, or neighbor is encouraged, as is contacting independent support services.

The Indispensable Value of Independent Guidance: State Health Insurance Assistance Programs (SHIP)

The Medicare landscape is heavily influenced by private insurance companies. Roughly half of all Medicare beneficiaries receive their coverage through Medicare Advantage plans, which are run by these private entities. Of the remaining half who choose traditional Medicare, nearly half enroll in Part D prescription drug plans and Medigap supplemental plans, also offered by private insurers.

This commercial involvement leads to an aggressive marketing season during Open Enrollment. Beneficiaries are inundated with mail, emails, phone calls, and even in-person events promising free meals in exchange for listening to sales pitches. Insurance brokers and agents also play a significant role, offering one-on-one consultations but receiving commissions for enrolling individuals in specific company plans. While these channels can provide information, they are inherently biased by financial incentives.

This is where independent sources of information become critical. The State Health Insurance Assistance Program (SHIP) is a vital, unbiased resource available in every state. SHIP programs employ paid staff and trained volunteers who have no financial stake in which plan a beneficiary chooses. Their sole mission is to provide free, objective counseling and assistance.

Dr. Lianlian Lei, an assistant professor in the U-M Medical School’s Department of Psychiatry who has studied Medicare enrollment, emphasizes the importance of these services: "With the overwhelming number of plans and the vast amount of information available, it’s essential to remember that free help is available. Seeking independent, unbiased assistance is crucial to making the best choice."

Despite their invaluable service, SHIP programs often lack the marketing budgets of insurance companies, leading to low public awareness. A recent U-M poll revealed a startling statistic: 75% of older adults had never heard of SHIP, and another 21% were aware but had never utilized its services. Only 4% of older adults had actually used SHIP services, despite their free availability to anyone eligible for Medicare.

In Michigan, for example, the state SHIP program, MiOptions, can be reached by calling 1-800-803-7174 from 8 a.m. to 8 p.m., Monday through Friday. Agents can schedule appointments or provide referrals to certified counselors in the community. MiOptions staff can also help older adults and their caregivers discover eligibility for other assistance programs. Many local public libraries and senior centers also host trained SHIP volunteers offering free in-person counseling sessions. These independent resources are critical for navigating the complexities and biases of the commercial Medicare market.

Beyond the Premium: Evaluating the Total Coverage Package

A common pitfall in insurance selection, including Medicare, is an overemphasis on the monthly premium at the expense of the overall coverage package. While the Medicare Plan Compare tool allows for side-by-side comparison of monthly premiums for different Medicare Advantage plans, it also provides crucial data on other costs like copayments, deductibles, and annual out-of-pocket maximums. These variable costs can significantly impact a person’s total healthcare spending, especially for those who utilize more medical services.

For individuals considering traditional Medicare, the Plan Compare tool does not directly compare it to Medicare Advantage. Beneficiaries must independently research the costs associated with traditional Medicare (e.g., Part B premiums, deductibles), then explore separate Part D prescription drug plans and Medigap plans available in their area. It’s important to remember that a "zero-dollar premium" Medicare Advantage plan typically refers only to the premium for the additional coverage beyond Part B; beneficiaries will almost always still pay the standard Part B premium, which is at least $185 per month in 2026, or more depending on income. Often, a plan with a slightly higher monthly premium might offer lower out-of-pocket costs at the point of care or a more favorable annual out-of-pocket cap, leading to greater overall savings for individuals with significant health needs. The National Council on Aging provides excellent guides to understanding these various cost components.

U-M research reveals that factors beyond cost often drive changes in Medicare Advantage plans. Access to care providers and dissatisfaction with the quality of care are the primary reasons beneficiaries switch plans. This holds true for those transitioning from Medicare Advantage to traditional Medicare. Therefore, evaluating a plan’s provider network—ensuring preferred doctors and hospitals are in-network—and reviewing its star ratings, which reflect member satisfaction, are crucial steps. Similarly, for Part D plans, understanding drug formularies and any restrictions on specific drug classes is essential. This detailed information is usually found on each plan’s individual website.

A significant consideration, highlighted by U-M’s research into Medicare’s "revolving door," is the issue of "Medigap lock-in." Most states do not guarantee the right to purchase Medigap plans regardless of health status, except for an initial enrollment period when a person first becomes eligible for Medicare. This can create a challenging situation for individuals with costly care needs who have been in a Medicare Advantage plan and wish to switch to traditional Medicare. They may find themselves unable to obtain affordable Medigap coverage, leaving them exposed to high out-of-pocket costs that traditional Medicare doesn’t cover. Understanding these Medigap rules, particularly if considering a switch from Medicare Advantage, is paramount.

Accessing Extra Assistance for Low-Income Beneficiaries

For older adults and individuals with disabilities who have limited incomes, various programs and supports are available that can significantly reduce healthcare costs. While some assistance is automatic, many programs require an application. For 2026, new programs and enhancements build upon existing supports from 2025.

Key assistance programs often include:

• Low-Income Subsidy (LIS), also known as "Extra Help": This program helps pay for Part D prescription drug costs, including premiums, deductibles, and co-payments.
• Medicare Savings Programs (MSPs): These state-administered programs help pay for Medicare Part A and/B premiums, deductibles, coinsurance, and copayments.

Beneficiaries can ascertain their eligibility for these and other programs through the Plan Compare tool or by contacting their state’s SHIP program. These programs can provide a vital financial safety net, ensuring that essential healthcare remains affordable for those with limited means.

Individualized Choices: The Importance of Separate Plan Selection for Couples

While convenience might tempt married couples or partners to enroll in the same Medicare plan, this is frequently not the optimal strategy. Health needs can vary dramatically between individuals, even within the same household. One partner might be retired, while the other is still working and covered by employer-sponsored insurance. Differing medical conditions, past employment coverage, or military service can also lead to unique requirements. For instance, a partner living with dementia may benefit from specialized plans and programs offering more comprehensive services tailored to cognitive health, which might not be relevant or beneficial for their spouse.

U-M research has indicated that people with and without dementia often make very similar Medicare Advantage choices, suggesting a potential lack of thorough individual evaluation. Furthermore, another U-M study observed that many Medicare Advantage-covered couples tend to make synchronized changes to their coverage. While a shared decision-making process is valuable, the underlying health and financial realities of each individual should dictate their plan selection.

The online Medicare tools are designed for individual input; there is no "couples" setting. Therefore, each person should independently go through the process, inputting their specific health conditions, medications, and preferred providers. While couples can seek SHIP counseling together, they may need to schedule separate appointments depending on their local program’s structure to ensure a comprehensive, individualized assessment. Making distinct choices based on personal circumstances is crucial for maximizing benefits and minimizing costs for both individuals.

Beyond the Deadline: Flexibility and Special Enrollment Periods

The December 7 deadline is critical, but it does not always represent an irreversible decision for the entire year. For those who choose a Medicare Advantage plan, there is a subsequent window from January 1 to March 31, known as the Medicare Advantage Open Enrollment Period. During this time, beneficiaries can switch to a different Medicare Advantage Plan or opt to return to traditional Medicare.

Furthermore, significant life changes can trigger a Special Enrollment Period (SEP). Events such as a change in income, employment status, relocation, or alterations in living situations (e.g., moving in or out of a nursing home) may qualify beneficiaries for an SEP, allowing them to change their plans outside of the standard Open Enrollment window. While these periods offer flexibility, it is always advisable to make the most informed decision possible during the primary Open Enrollment to ensure stable and appropriate coverage from the start of the year.

The complexities of Medicare Open Enrollment demand proactive engagement and informed decision-making. The wealth of resources available, from the official Medicare website’s Plan Compare tool to the invaluable, unbiased assistance provided by State Health Insurance Assistance Programs, empowers beneficiaries to navigate these choices effectively. As Dr. Fendrick and Dr. Lei underscore, taking the time to review and select the optimal plan is not just about compliance; it is about safeguarding one’s health and financial future. With the December 7 deadline fast approaching, the message for 68 million Americans is clear: act now, use the tools, seek independent help, and look beyond the surface to secure the best possible health coverage for 2026.

This article contains information based on research by, and expertise from, experts who are part of the U-M Institute for Healthcare Policy and Innovation, including Lianlian Lei, Ph.D., U-M Medical School Department of Psychiatry; Geoffrey Hoffman, Ph.D., U-M School of Nursing; Kristian Stensland, M.D., M.P.H., M.S., U-M Medical School Department of Urology; and A. Mark Fendrick, M.D., and Renuka Tipirneni, M.D., M.Sc., U-M Medical School Department of Internal Medicine, Division of General Medicine. Data on awareness of SHIP comes from the National Poll on Healthy Aging, based at IHPI.