Medicare Annual Enrollment Period: Your Complete Strategy Guide

Every fall, millions of Medicare beneficiaries face the same decision: keep your current coverage or switch to something better? The Medicare Annual Enrollment Period (AEP) — running from October 15 through December 7 — is your once-a-year opportunity to make changes that take effect January 1. Use it strategically and you can save hundreds or thousands of dollars a year. Ignore it and you might pay for coverage that no longer fits your needs.

This guide walks through everything you need to know about AEP: what you can change, how to evaluate your options, and a practical decision framework for making the right call.

What Is the Medicare Annual Enrollment Period?

The Annual Enrollment Period is the primary window during which Medicare beneficiaries can switch, join, or drop Medicare health and drug plans. It runs each year from October 15 to December 7, with changes taking effect January 1 of the following year.

AEP is not to be confused with:

• Initial Enrollment Period (IEP): The 7-month window when you first become eligible for Medicare
• Special Enrollment Period (SEP): Triggered by qualifying life events (moving, losing employer coverage, etc.)
• Open Enrollment Period (OEP): January 1–March 31, limited to switching Medicare Advantage plans or dropping MA to return to Original Medicare
• Medicare Advantage Disenrollment Period: Former name for OEP — same window, rebranded

During AEP, you can make the following changes:

*Medigap (Medicare Supplement) plans operate outside the AEP framework. In most states, you can apply for Medigap at any time, but underwriting applies unless you’re in a guaranteed-issue period.

Why AEP Matters More Than You Think

Medicare plans are not static. Every year, insurance carriers can change:

• Premiums — your monthly payment
• Deductibles and copays — your out-of-pocket costs at the point of care
• Drug formularies — which medications are covered and at what tier
• Provider networks — which doctors and hospitals are in-network
• STAR ratings — Medicare’s quality score for each plan
• Extra benefits — dental, vision, hearing, fitness, transportation (particularly common in MA plans)

If you do nothing during AEP, you remain in your current plan — even if its premium jumps, it drops your doctor from the network, or your key medication moves to a more expensive tier. That inaction is a choice with real consequences.

Step 1: Review Your Annual Notice of Change

By September 30 each year, your current plan must mail you an Annual Notice of Change (ANOC). This document details exactly what is changing about your current coverage for the upcoming year.

Read it carefully before AEP begins. Look for:

• Premium changes (even a $10/month increase is $120/year)
• Changes to your drug’s cost-sharing tier
• Network changes (check whether your primary care doctor and specialists remain in-network)
• Changes to out-of-pocket maximums (for Medicare Advantage plans)
• Loss of extra benefits you rely on

If you don’t receive your ANOC by October 1, contact your plan directly or call 1-800-MEDICARE (1-800-633-4227).

Step 2: List Your Health Care Needs

Before comparing plans, create an honest inventory of your expected health care needs for the coming year:

Medications: List every prescription drug, its dosage, and how often you take it. This is the single most important factor in choosing a Part D or Medicare Advantage plan.

Regular providers: Which doctors, specialists, and hospitals do you use regularly? For Medicare Advantage, these must be in-network for the plan to cover care at normal rates.

Upcoming procedures: If you know you’ll need surgery, physical therapy, or other significant care, model the costs under different plan structures.

Chronic conditions: Plans cover chronic disease management differently. If you have diabetes, heart disease, or other ongoing conditions, look for plans with strong care management programs.

Travel: If you spend significant time outside your plan’s service area, Original Medicare plus a Medigap plan offers broader geographic coverage than most Medicare Advantage plans.

Step 3: Use the Medicare Plan Finder

The Medicare Plan Finder at medicare.gov/plan-compare is the official tool for comparing plans available in your zip code. It’s free, comprehensive, and updated every year for AEP.

How to use it effectively:

1. Create an account or sign in — Medicare.gov can pull your current coverage and enrollment history, simplifying comparisons
2. Enter your prescriptions — Add every drug with dosage and quantity. The tool will calculate your estimated annual drug costs for each plan
3. Filter by provider — Enter your doctors to see which plans include them in-network
4. Compare total cost estimates — The tool combines premium, deductible, copays, and drug costs into an estimated annual total

Don’t just compare premiums. A plan with a $0 premium but high drug costs could easily be more expensive than one with a $50/month premium and better formulary coverage for your medications.

Understanding STAR Ratings

Medicare rates every Medicare Advantage and Part D plan on a 1–5 STAR scale. Ratings are based on:

• Member outcomes (how well the plan keeps members healthy)
• Member experience (customer service, ease of getting care)
• Administrative measures (accuracy of claims processing, appeals outcomes)
• Process measures (screenings, vaccinations, chronic care management)

What STAR ratings mean in practice:

• 5-star plans: Highest quality; can enroll at any time during AEP or use a Special Enrollment Period year-round
• 4–4.5 stars: Very good quality; worth serious consideration
• 3.5 stars: Average; not necessarily bad, but worth scrutinizing why
• Below 3 stars: Underperforming; proceed with caution
• “Low-performing” designation: Plans rated below 3 stars for three consecutive years can lose Medicare contracts

Note that STAR ratings for the upcoming year are released each October — right when AEP begins. A plan that was excellent last year may have declined; a newer plan may have improved.

Evaluating Medicare Advantage Plans

Medicare Advantage (Part C) plans replace Original Medicare and typically include Part D drug coverage. Key things to evaluate:

Network Type

• HMO: Lowest premiums; requires referrals for specialists; little or no out-of-network coverage (except emergencies)
• PPO: Higher premiums; no referrals needed; some out-of-network coverage at higher cost
• HMO-POS: HMO with limited out-of-network option for specific services
• PFFS: Pay-as-you-go network; providers choose whether to accept the plan’s payment terms
• SNP: Specialized plans for people with specific chronic conditions, dual Medicare/Medicaid eligibility, or institutional care needs

For most people, the HMO vs. PPO decision comes down to: do you have specialists you need to see regularly? If yes, confirm they’re in the HMO network or pay for a PPO’s flexibility.

Out-of-Pocket Maximum

Medicare Advantage plans must have a maximum out-of-pocket limit. In 2025, the limit is $9,350 for in-network services. Once you reach it, the plan pays 100% for covered services.

Compare OOP maximums across plans — lower is better, but it often comes with higher premiums or more restrictive networks.

Drug Formulary

Even within a Medicare Advantage plan that includes Part D, drug formulary coverage varies widely. A plan may cover your medication on Tier 3 (mid-level copay) while another covers it on Tier 1 (lowest copay). Over 12 months, this difference on a single medication can amount to hundreds of dollars.

Always use the Plan Finder to enter your specific medications and compare annual drug costs — never assume coverage is the same across plans.

Extra Benefits

Medicare Advantage plans often offer benefits beyond Original Medicare:

• Dental coverage (cleanings, X-rays, sometimes major services)
• Vision (eye exams, eyeglass frames/lenses)
• Hearing (hearing exams, hearing aids)
• Fitness membership (SilverSneakers or equivalent)
• Transportation to medical appointments
• Over-the-counter allowances ($0 copay for basic health supplies)
• Telehealth services

These extras have real dollar value. A plan offering $2,000 per year in dental coverage has a meaningful advantage over one that doesn’t, even if its premium is slightly higher.

Evaluating Part D Standalone Plans

If you have Original Medicare plus Medigap, you’ll need a standalone Part D plan for drug coverage. Evaluation criteria:

Formulary Coverage

Does the plan cover all your medications? Check the formulary carefully, including:

• Tier placement (which tier your drug is on, and what the copay/coinsurance is for that tier)
• Step therapy requirements (must you try a cheaper alternative first?)
• Prior authorization (does the plan require approval before covering the drug?)
• Quantity limits

Deductible

In 2025, Part D plans may charge a deductible up to $590 before coverage begins. Many plans waive the deductible for Tier 1 and Tier 2 drugs. If all your medications are on lower tiers, deductible comparison matters less.

Preferred Pharmacy Network

Part D plans contract with preferred pharmacies where your copays are lower. If you have a preferred pharmacy, verify it’s in your plan’s network. Switching pharmacies can dramatically affect your annual drug costs.

Coverage Gap (Donut Hole) Status

In 2025, the coverage gap (“donut hole”) has been effectively eliminated thanks to the Inflation Reduction Act, with out-of-pocket drug costs capped at $2,000 annually. This makes formulary and premium comparison more straightforward than it was in previous years.

The Decision: Switch or Stay?

After reviewing your options, apply this framework:

Stay if:

• Your plan’s ANOC shows minimal changes that don’t affect your key medications, providers, or costs
• The plan’s STAR rating is 4 or above and hasn’t declined significantly
• You’ve compared alternatives and your current plan remains competitively priced
• You’re mid-treatment and switching networks could disrupt care

Consider switching if:

• Your key medication moved to a higher tier, increasing your annual drug costs significantly
• Your primary doctor or a specialist you rely on left the network
• A competitor plan offers similar or better coverage at meaningfully lower total cost
• Your plan’s STAR rating dropped below 3.5 (quality signal worth heeding)
• You’ve shifted from Medicare Advantage to wanting Original Medicare’s flexibility (e.g., you travel frequently or want to see any Medicare provider without referrals)

Red flags to avoid:

• Switching to a plan with a $0 premium without checking drug costs and out-of-pocket maximums
• Choosing a plan based on brand name rather than actual performance in your zip code
• Ignoring the STAR rating when multiple plans appear similar in cost

Getting Free Help: SHIP Counselors

Every state has a State Health Insurance Assistance Program (SHIP) that provides free, unbiased counseling on Medicare choices. Counselors are not insurance agents — they have no financial incentive to steer you toward any plan.

SHIP counselors can:

• Help you use the Plan Finder tool
• Explain your coverage options in plain language
• Review your Annual Notice of Change
• Assist with appeals or billing problems

To find your local SHIP, call 1-800-Medicare or visit shiphelp.org.

Common AEP Mistakes to Avoid

Waiting until the last minute. AEP ends December 7. If you decide to switch on December 5 and encounter technical problems, you may miss the window. Start comparing in mid-October.

Ignoring the drug formulary. Premium is just one piece of cost. A $0 premium plan that doesn’t cover your medications well can cost you far more than a plan with a monthly premium.

Assuming your current plan is unchanged. Plans change every year. Your comfortable routine from last year may not apply to your plan’s 2025 version.

Switching Medicare Advantage plans for the extras alone. Extra benefits like dental and vision have caps and limitations. A plan with $2,000 in dental coverage that excludes major services may be worth much less than it appears.

Forgetting to check the network. If you’re switching to a new HMO, call your doctors’ offices directly to confirm they participate in the plan — don’t rely solely on the online directory, which can lag behind actual contracts.

How AEP Interacts with Medigap

Medigap (Medicare Supplement) plans operate differently from Medicare Advantage and Part D. They:

• Don’t use the AEP framework
• Can be purchased at any time of year
• Are subject to medical underwriting in most states (except during guaranteed-issue periods)
• Don’t change their benefit structure annually (benefits are standardized by plan letter)

If you currently have a Medigap plan, your main decision during AEP is whether to adjust your standalone Part D drug plan. If you’re considering switching from Medicare Advantage to Original Medicare plus Medigap, be aware that Medigap underwriting applies — you may not qualify if you have significant health conditions.

See our comparison of Medigap plans and Medicare Advantage vs. Original Medicare for a deeper analysis of both options.

Key Dates to Remember

Summary

The Medicare Annual Enrollment Period is your most important annual decision point. Medicare plans change every year — premiums rise, formularies shift, networks evolve. Treating AEP as routine and doing nothing is itself a choice, and often a costly one.

The right approach: start in October, review your ANOC carefully, enter your actual prescriptions into the Plan Finder, verify your doctors are in-network, and compare total annual costs rather than just premiums. If you’re unsure, a free SHIP counselor can walk you through the comparison at no cost.

Related resources on Senior Finance Hub:

• Medicare Enrollment Periods Explained — IEP, GEP, SEP, and AEP in detail
• Medicare Part D: How Drug Coverage Works — formularies, tiers, and cost structure
• Medicare Advantage HMO vs. PPO — which network type fits your needs
• Medigap Plans Compared — all 10 standardized supplement plans
• IRMAA: Medicare’s High-Income Surcharge — income thresholds that affect premiums