• If you're on a Medicare Advantage plan, you have until March 31 to reconsider your coverage.
• Here's what you need to know to get started.

Certain retirees can now change their health coverage during Medicare Advantage open enrollment, which runs until March 31.

Medicare Advantage is health coverage provided through private companies that are paid by Medicare to cover your benefits.

If you're already on a Medicare Advantage plan, you can take advantage of the open enrollment period to switch to another Medicare Advantage plan or drop your Medicare Advantage plan and switch to original Medicare and perhaps also a separate Medicare drug plan. (Original Medicare includes Parts A and B for inpatient hospital stays and outpatient care.)

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One of the biggest reasons Medicare beneficiaries may want to switch coverage is costs.

Recent research from the Employee Benefit Research Institute suggests that retirees may need to have substantial sums set aside to cover health care costs in retirement — up to $413,000 in one "extreme case" for a couple covered by Medigap with high prescription drug expenditures to cover 90% of their costs.

However, those enrolled in Medicare Advantage may need lower savings targets, the research found. For example, couples may need to have just $189,000 saved to have a 90% chance of covering their retirement health care costs.

There are potential drawbacks to Medicare Advantage, the research notes, particularly because those plans tend to have limited networks or require approval before covering certain medications or services.

While those six-figure estimates may sound intimidating, a better way to plan for health care costs in retirement is as an annual cash flow need, rather than lump sum savings, according to physician and certified financial planner Carolyn McClanahan, the founder of Life Planning Partners in Jacksonville, Florida.

"We need to look at this year to year instead of trying to predict 30 years of costs," said McClanahan, who is also a member of the CNBC FA Council.

Medicare open enrollment periods can be an opportunity to identify potential ways to save.

When a Medicare Advantage plan may be best

Medicare Advantage plans have largely been put in place because of baby boomers, who have become used to managed care plans in their working years, notes Darren Hotton, associate director of community health and benefits at the National Council on Aging.

The plans allow beneficiaries to carry just one card and usually come with co-pays. Medicare Advantage plans generally don't require beneficiaries to get a separate drug plan for prescriptions and may also provide for supplemental benefits that are not allowed under original Medicare.

"It's great for people who are healthy," Hotton said. "It's great for people who love co-pays and being told where to go."

Because Medicare Advantage plans come with an out-of-pocket maximum, they also are typically a fit for low-income beneficiaries who may struggle with high deductibles and coinsurance under original Medicare, he noted.  

When to keep your options open

Whether or not a Medicare Advantage plan is right for you depends on how healthy you are.

"If you know that you have a lot of medical services, it's probably best for you to just go to Medicare and a Medicare supplement," Hotton said. "But if you're healthy, you could save money, then this is probably the right option with Medicare Advantage."

Retirees may be tempted to go with Medicare Advantage once they see the lower premiums, particularly if they live in an area with a strong network, McClanahan said.

But the problem is those plans can be restrictive if you come down with a serious condition and need specialized care.

If you want to switch to Medigap — extra insurance provided by a private insurance company to supplement original Medicare costs — you would have to undergo specialized underwriting. If you're sick, you would be unlikely to pass and stuck with the more limited Medicare Advantage coverage, McClanahan said.

"If you're young and healthy, you don't know what disease you're going to get," McClanahan said. Consequently, she said she often recommends original Medicare coverage.

Hotton said he has seen beneficiaries who go back and forth between Advantage and original Medicare many times in their lifetime. The key is to be strategic. For example, someone who has a family history of health declines after 80 may elect to switch back to original Medicare when they approach that age milestone.

How to take advantage of open enrollment

If you're currently on a Medicare Advantage plan and are considering whether to switch during open enrollment, the first step is to visit your local State Health Insurance Assistance Program, or SHIP, Hotton said.

There, they can walk you through the Medicare plan finder, whether you can see how your current plan compares with others with regard to providers, prescriptions and pharmacies.

If there's a better plan, the help at your SHIP office may be able to help with that transition, Hotton said.

Alternatively, beneficiaries may also compare plans by visiting Medicare.gov.

Beneficiaries may also receive help by calling Medicare's 800 number. However, they may only send you a more limited list of the top three Medicare Advantage plans in your area, Hotton noted.

Because it can take some time to become fully enrolled in new coverage if you switch, it's best to get started now rather than wait until the March 31 deadline, Hotton said.