This is an updated version of an article originally published in 2024.
If you’re been following the news lately, you might have read that some Medicare Advantage providers are in financial trouble. If yours is one of them, now might be the time to switch to another provider or switch to Traditional Medicare, since we’re in the middle of the winter Medicare Advantage Open Enrollment period, which began on January 1 and ends on March 31.
Why are some Medicare Advantage plans in trouble?
The U.S. government has recently proposed raising the rates paid to Medicare Advantage providers by less than a tenth of one percent, which is much less than providers expected. Many of these providers warn that if this rate isn’t increased, they may raise premiums or cut services or stop providing plans altogether in certain states..
What you can do if you want to take action
If you’re worried about your current Medicare Advantage plan or simply want to make a change, there are two things you can do during this winter/spring:
- Switch from one Medicare Advantage plan to another.
- Switch from Medicare Advantage to Traditional Medicare.
What is Traditional Medicare, again?
If you’ve always been on a “bundled” Medicare Advantage plan, here’s a quick overview of Traditional Medicare. Instead of an “all-in-one” plan, subscribers typically enroll in these separate “parts.” (Note that if you’re a Medicare Advantage subscriber, your Medicare Parts A and B coverage is bundled into your plan.)
- Medicare Part A covers some of the costs of inpatient hospital care; skilled nursing facility care; short-term inpatient care in a skilled nursing facility; hospital care; and short-term home health care. For most people, there’s no monthly premium.
- Medicare Part B covers some of the costs of services or supplies to diagnose or treat your medical condition; preventive services to detect and treat illness; ambulance services; medical equipment; outpatient treatment services; partial hospitalization; and limited outpatient prescription drugs. Monthly premiums for Medicare Part B in 2026 start at $202.90. Note: even if you’re on a Medicare Advantage plan, you still pay this monthly Part B premium.
- Medicare Part D covers some of the costs of prescription drugs not covered by Traditional Medicare. Medicare Part D plans are offered by private insurers. Monthly premiums vary, but for 2026 the average monthly premium is around $34.
- Medigap—also called Medigap Supplemental Insurance—covers the cost of co-pays, deductibles and other expenses not covered by Traditional Medicare. Medigap coverage is provided by private health insurers. Monthly premiums can range from as little as $50 to more than $400 per month, depending on where you live and the level of coverage.
Why switch from Medicare Advantage to Traditional Medicare?
Medicare Advantage plans bundle all Medicare services into a single plan whose monthly premiums are often less than paying for Medicare Part B, D and Medigap coverage separately.
However, despite their relative affordability, there may be good reasons for transitioning from Medicare Advantage to Traditional Medicare:
- You want the freedom to see any physician at any facility, whether you’re at home or away anywhere in the U.S. There’s no such thing as “out of network” costs. As long as the provider accepts Medicare payments, you’ll have access to them.
- You want to make sure that some of your prescription drug costs are covered. The sheer variety of Medicare Part D insurance plans available makes it highly likely that you’ll find one that covers your prescriptions with reasonable out-of-pocket costs.
If you make the switch, you can also apply for a Medigap policy at any time. However, healthcare insurers have the right to deny you coverage or charge you higher premiums if you have a previous condition.
Why stick with Medicare Advantage?
The main advantages of these bundled options are cost and convenience. Many Medicare Advantage plans also cover some of the costs of dental care and hearing aids. Traditional Medicare doesn’t cover these expenses.
Should you switch or stay?
If you're happy with the Medicare coverage you currently have, there may be no compelling reasons to switch.
However, if you decide to switch Medicare Advantage plan providers or move to Traditional Medicare during this winter/spring period, your coverage generally begins the first day of the month following your decision.
The good news is that your decision is never permanent. You can change your coverage once every year.
And if you don’t want to do it now (or you’re reading this after March 31), you can wait until Medicare’s special enrollment period, which starts on October 15 and ends on December 7.
During that period you can:
- Switch Medicare Advantage plan providers;
- Move from Traditional Medicare to a Medicare Advantage plan;
- Transition from Medicare Advantage to Traditional Medicare; or
- Add, change or drop a Medicare Part D provider.
Understanding your options
If you’re thinking of varying your coverage it’s important to understand the pros and cons of any changes you're considering. Fortunately, help is available. Every state has a State Health Insurance Assistance Program (SHIP) where consultants are available to work one-on-one with you at no charge to help you understand and evaluate your available Medicare options. You can locate a SHIP counselor in your area by visiting the SHIP web site at https://www.shiphelp.org.
This article was authored by Michael Flaherty and Jeffrey Briskin. Michael is a senior financial advisor with Canby Financial Advisors, a SEC-registered investment adviser. SEC registration does not constitute an endorsement by the SEC nor a statement about any skill or training. Michael can be reached at 508.598.1082 or mflaherty@canbyfinancial.com. Jeffrey Briskin is Director of Marketing at Canby Financial Advisors.