Getting a handle on the basics of Medicare can help protect your health — and your nest egg — in retirement, so making the right choices during Medicare open enrollment is arguably one of the most important financial decisions you can make.
Open enrollment runs from October 15 to December 7 each year. You can tell by the advertisements that inundate the airwaves and your mailbox. You’re likely even getting unsolicited calls and emails. All kinds of health insurance brokers and companies want to dazzle you with their offerings.
First, let’s review the basics. As most retirees know, Medicare has several parts. Part A, which is offered at no cost, generally covers hospitalizations. Part B covers outpatient medical care. Part D is prescription drug coverage provided by private insurers. Medicare Part C, better known as Medicare Advantage, is also managed by private insurance companies.
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If you want a primer on how Medicare works and changes this year, consider downloading the Medicare & You Handbook for 2026 (PDF).
Medicare Advantage is the umbrella term for plans offered by private insurers regulated by Medicare as an alternative way to receive Part A and B. Medigap plans, also offered by private companies, are supplemental plans that cover co-pays and co-insurance charges. While some people assume that Medicare will cover all their health care costs, there are things Medicare won't cover.
A 65-year-old retiring in 2025 can expect to spend an average of $172,500 in health care and medical expenses throughout retirement, according to the latest data from Fidelity Investments.
This highlights the importance of reviewing your Medicare plan choices during open enrollment each year to ensure you have the best coverage to meet your needs.
1. Open enrollment dates
Every year, Medicare’s annual open enrollment (AEP) period runs from October 15 to December 7. This is the time to enroll in or make changes to original Medicare, Medicare Part D or Medicare Advantage policies.
There's another open enrollment period only for people with Medicare Advantage plans, from January 1 to March 31. During this open enrollment, you can change from one Medicare Advantage plan to another or go back to original Medicare and join a separate Medicare drug plan.
But while experts urge an annual review of your coverage, you don’t have to do anything if you’re happy with what you have. If you want to maintain your current Medicare coverage, you don't need to re-enroll. Inaction will result in your current elections being renewed.
2. Few people take advantage of open enrollment
While Part D plans can change the drugs they cover, and Medicare Advantage plans can change their provider networks, as well as your costs and other provisions, fewer than one-third of enrollees are estimated to take advantage of open enrollment to compare plans and re-evaluate their coverage.
Tim Smolen, program manager of the Washington State Health Insurance Assistance Programs (SHIP), which helps residents navigate Medicare, says beneficiaries consistently care about three things during open enrollment: access, what benefits are included in their plan, and cost.
That last issue is the toughest to gauge. “It's very difficult to forecast in the year ahead how much health care you're going to use,” he says.
3. Limits on Medigap changes
People who choose to keep original Medicare might also enroll in a supplemental Medigap plan from a private insurer to cover costs such as co-pays. Original Medicare, when not paired with Medigap, doesn't have a limit on out-of-pocket expenses in a year.
Medigap policies, which can't be paired with Medicare Advantage plans, have standardized benefits. Most states offer 10 types of Medigap policies, but premiums vary, depending on the insurer. You can compare costs, benefits and availability on Medicare’s website.
If you switch from Medicare Advantage to original Medicare, keep in mind that qualifying for a Medigap policy may be difficult. Some states offer more protections than others, but, in general, your first time enrolling in Medicare is your best opportunity to get a Medigap policy.
4. Medicare Advantage differences
These plans might have a monthly cost, in addition to the Part B premium, that varies depending on the plan. The plans frequently include prescription drug coverage and limits on annual out-of-pocket costs for covered services. The average monthly premium is expected to be $14.00 in 2026, $2.40 less than the $16.40 it was last year.
Medicare Advantage may offer extras not included in traditional Medicare, such as dental, hearing, and vision coverage and gym memberships. The program provides this through managing costs, partly by limiting beneficiaries to in-network providers.
During open enrollment, experts recommend checking to make sure your preferred providers and hospitals remain in the network for your plan.
Three in 10 beneficiaries in Medicare Advantage plans said they did not use any of their plan’s supplemental benefits in the past year, according to a study by The Commonwealth Fund. The study also shows that Medicare Advantage often requires prior authorization for care; be sure to review your plan's specific rules carefully.
5. Medicare Advantage issues
The number of Medicare Advantage plans is shrinking. CVS Health, Humana and UnitedHealth Group announced that they will cut some Medicare Advantage (MA) and Part D prescription drug plans for the 2026 plan year.
These changes are a response to financial pressures, including changes in government funding and rising health care costs. This has led insurance carriers to scale back their offerings in less profitable regions.
If you're enrolled in a Medicare Advantage plan through UnitedHealthcare, Humana or Aetna and want to know if your plan is being eliminated, read your Annual Notice of Change (ANOC).
Your plan is required to send the notice to you and should have arrived by September 30. The ANOC includes any changes in coverage, costs and any other modifications that take effect in January 2026.
If you haven't received a copy of your ANOC, you can request one by phone, via email or through the website.
6. Medicare premiums
Beneficiaries of original Medicare pay a standard monthly rate of $202.90 for Medicare Part B in 2026, an increase of $17.90 from $185 in 2025. The annual deductible for all Medicare Part B beneficiaries is $283 in 2026, an increase of $26 from the $257 deductible in 2025.
This rate applies to individuals with incomes less than $109,000, or $218,000 for a married couple filing jointly, with income-related monthly adjustments applying at various levels to higher earners.
The Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital is $1,736 in 2026, an increase of $60 from $1,676 in 2025. Beneficiaries are required to pay a co-insurance amount of $434 per day for the 61st through 90th day of a hospitalization in a benefit period, compared to $419 per day in 2025. The cost of lifetime reserve days is $868 per day in 2026, up from $838 a day in 2025.
For beneficiaries in skilled nursing facilities, the daily co-insurance for days 21 through 100 of extended care services in a benefit period is $217 in 2026; this was $209.50 in 2025.
The average monthly plan premium for Medicare Advantage plans, which includes Medicare Advantage prescription drug plans, is $14.00 in 2026, $2.40 less than in 2025. Most enrollees who kept their plans experienced little or no premium increase for 2026, with 67% of beneficiaries not seeing any premium increase.
In 2026, the out-of-pocket limit for Medicare Advantage plans might not exceed $9,250 for in-network services and $13,000 for in-network and out-of-network services combined. These out-of-pocket limits apply to Part A and B services only, and don't apply to Part D spending.
Medicare beneficiaries will pay no more than $2,100 out of pocket for prescription drugs covered under Part D in 2026. Part D enrollees will also have the option of spreading out their out-of-pocket costs over the year rather than face high out-of-pocket costs in any given month. This rule applies only to medications covered by your Part D plan and does not apply to out-of-pocket spending on Medicare Part B drugs.
7. Watch out for IRMAA
People with higher income are charged higher Part B and D premiums — the income-related monthly adjustment amount, or IRMAA. In 2026, a single person with an income of from $109,000 to $137,000 will pay $284.10 a month for Part B, compared with premiums of $202.90 for people who earned less.
Couples who are married and file jointly, who make from $218,000 to $274,000, both pay an extra $81.20 a month, for a total of $568.20 per month. These income figures are based on your 2024 modified adjusted gross income (MAGI).
Your income for IRMAA purposes is calculated based on income two years before the plan year.
8. Avoiding the surcharge
You can appeal your IRMAA if your income is significantly lower now than two years ago due to a life-changing event, such as retirement, divorce, or the death of a spouse, or if you think the government made a mistake. Beyond that, the only way to avoid the surcharge is to have less MAGI, which includes all taxable income from work and investments, as well as the taxable portion of your Social Security.
Unfortunately, most popular deductions, such as charitable donations and mortgage interest, do not reduce your MAGI. A well-timed Roth conversion of a traditional IRA can help, because withdrawals from Roth IRAs don’t count toward your MAGI.
9. When do you have to enroll in Medicare?
In general, you initially enroll in Medicare within three months before and three months after turning 65. Failing to do so can result in financial penalties, increasing your premiums for the rest of your life.
However, there are exceptions, including many people who receive health insurance through their employers or through their spouse’s job, as long as the workplace has 20 or more employees. Check with your employer about how it handles your group health coverage at age 65.
Be wary of the “COBRA trap” — insurance you might receive after you leave your job doesn't eliminate the requirement that you apply for Medicare at age 65.
If you miss the Medicare annual open enrollment deadline, there are still some ways you can salvage your status.
10. Help is available
The choices can seem overwhelming, and the marketing can be confusing and misleading. Fortunately, each state has unbiased experts who can walk you through the different plans and help make sure your plans are the best for your needs.
State Health Insurance Assistance Programs can be found through www.shiphelp.org or by calling 877-839-2675. You can also call Medicare directly at 1-800-MEDICARE (1-800-633-4227) 24 hours a day during open enrollment, including weekends, for assistance.
Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that’s right on the money.
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