What You Need to Know About Changing or Dropping Your Medicare Advantage Plan Coverage for 2023

If you're a Medicare beneficiary enrolled in an Advantage Plan, now's the time to reassess your 2023 coverage to see if it's still a good fit.

If you're not happy with the Medicare Advantage Plan you chose during the annual open enrollment period, you can switch to a different one between January 1 and March 31. Or, you can drop your current plan and switch to basic Medicare (Part A hospital coverage and Part B outpatient care coverage).

"This is the time of year when only beneficiaries in Advantage Plans who feel they made the wrong plan selection for 2023 can change it," said Elizabeth Gavino, founder of Lewin & Gavino and an independent broker and general agent for Medicare plans.

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There are several reasons why people might choose to switch health insurance plans. For example, they may discover that their preferred doctor or other provider is not in-network under their current plan, which means they would have to pay more to see them. Or, they may find that their prescriptions are not covered or cost more than they expected.

Approximately 29.1 million of Medicare's 64.5 million beneficiaries are enrolled in Advantage Plans, which deliver Parts A and B coverage, as well as prescription drug coverage under Part D. These plans also typically offer extras such as basic dental and vision coverage. However, they come with their own cost-sharing structures (e.g., deductibles and copays) and their lists of drugs covered (and their cost) can differ from plan to plan. Additionally, these lists are likely to change from year to year.

This Advantage Plan-related window comes with restrictions, in contrast to Medicare's annual fall enrollment when a variety of options were available for those who wanted to modify their coverage.

You can only make one switch at a time. This means that if you move to a different Advantage Plan or drop it for basic Medicare, the change is locked in for the year.

It's important to choose a Medicare plan that will work for you for the rest of 2023. You can use Medicare's online plan finder to find a plan that's right for you.

"If you want to make sure your doctor or other key provider is in network with a plan you're considering switching to, you can check directly with them," said certified financial planner and physician Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida.

According to McClanahan, a member of CNBC's Financial Advisor Council, the best way to find out which Medicare Advantage Plan is right for you is to call your doctor's office and ask for their recommendation.

You can also ask your pharmacy if your prescriptions are covered by an Advantage Plan. According to McClanahan, pharmacies often have knowledge of which plans cover which drugs.

It is important to be aware that the current three-month window for enrollment in Medicare Part D plans differs from fall enrollment in that you cannot switch from one standalone Part D plan to another.

If you chose a Part D plan during the fall open enrollment period based on inaccurate or deceptive information, you can call 1-800-Medicare to find out if your circumstances would permit you to make a change.

If you drop an Advantage Plan in favor of basic Medicare, you may lose drug coverage. In that case, you would need to enroll in a standalone Part D plan.

The 63-day period without drug coverage is important, because if you go without coverage for that long, you could face a lifelong late-enrollment penalty that gets tacked on to your monthly premiums. That charge is 1% of the national base premium ($32.74 for 2023) for each full month you go without drug coverage.

If you're thinking about switching to basic Medicare and adding a supplemental policy (known as Medigap), be aware that you may not qualify for guaranteed coverage. Medigap policies help cover some of the costs associated with Parts A and B of Medicare, including deductibles, copays and coinsurance.

"However, Medigap policies come with their own rules for enrolling. Depending on your state, you may need to pass medical underwriting to get approved for a Medigap policy. This makes it worth knowing first that you would be able to be approved," said Danielle Roberts, co-founder of insurance firm Boomer Benefits.

The medical underwriting requirement has one exception: If you are within the first year of trying out an Advantage Plan, you usually can return to a Medigap policy without having to go through underwriting again.

If you missed your initial Medicare enrollment period, you can sign up during the separate Advantage Plan window from Jan. 1 through March 31. As of this year, coverage takes effect the month after you enroll (it previously was July 1).