Medicare Costs Are Rising in 2026. Here’s How to Save During Open Enrollment

A recent survey by NerdWallet reveals that nearly two-thirds of Americans (64%) are concerned that Medicare benefits may be reduced under the current administration. Many believe that these reductions could take effect as early as next year, potentially accompanied by increased costs.

According to the Medicare Trustees, Medicare Part B premiums are projected to rise by $21.50, reaching $206.50 next year, marking one of the largest premium increases in Medicare history. Additionally, Medicare Part D prescription drug plans may see premium hikes of up to $50, a significant jump from last year’s $35 cap. Many major private insurers are also scaling back their Medicare offerings or exiting the market entirely due to profitability concerns.

Fortunately, consumers have a key strategy to combat rising costs, shrinking provider networks, and diminishing benefits:

Medicare’s fall open enrollment period

. This annual window, from October 15 to December 7, allows beneficiaries to add, drop, or switch Medicare plans.

Melinda Caughill, co-founder of 65 Incorporated, emphasizes the importance of this enrollment period: “This is the most important open enrollment period in Medicare’s 60-year history. Everybody should be reviewing their plan.”

To assist in this review, here’s a Medicare open enrollment checklist to help you compare your options this fall.

1. Read your Annual Notice of Change carefully

Medicare enrollees should have received an Annual Notice of Change (ANOC) in September, outlining changes to their plan for the upcoming year. Pay close attention to any modifications regarding:

• Maximum out-of-pocket limit.

• Provider network and service area.

• Prescription drug coverage and pharmacy network.

2. Confirm your prescription drugs are still covered and affordable

Carolyn McClanahan, a physician and certified financial planner (CFP), warns that one of the biggest mistakes seniors can make is neglecting to revisit their prescription drug coverage. “Too many people just let it coast, and their drugs may not be on the formulary or the cost has gone up a lot,” she explains.

Don’t rely solely on your ANOC. Caughill advises consumers to check their insurance company’s website to verify their medications against the plan’s new formulary. While Medicare prescription drug plans will have a $2,100 cap on out-of-pocket costs in 2026, this cap only applies to covered drugs. If a necessary medication is not included in your plan’s formulary, it could significantly impact your savings.

Even if your medications are covered, they may fall into a different cost-sharing tier. For instance, a drug that had a $10 copay this year might switch to a 25% coinsurance next year. If the retail price of that drug is $1,000, your cost could jump from $10 to $250. “Plans that worked this year may not work for you next year at all,” Caughill warns, suggesting that you compare your coverage with other

Medicare prescription drug plans

.

3. Verify your doctors and hospitals are still in network if you’re on Medicare Advantage

Caughill notes that “the wild card in Medicare Advantage is plan networks,” as they can change at any time. If your medical provider is suddenly dropped from your plan’s network, you’ll either need to find a new one or face high out-of-network costs. With insurers scaling back their offerings, the regions where your plan operates may also be shrinking.

Additionally, some insurers are discontinuing preferred provider organization (PPO) plans, which allow enrollees more freedom to see out-of-network providers. It’s advisable to contact your primary care doctor and any specialists or hospitals you plan to visit to confirm they will still be in your plan’s network next year.

4. Look past the perks and prioritize long-term financial security

As costs rise, seniors may be tempted to enroll in

Medicare Advantage plans

that advertise low premiums and extra perks like dental allowances and gym memberships. However, McClanahan cautions against this approach.

The low premiums often stem from limitations on provider access and care locations. Your doctor could drop your plan at any time, and certain services may require prior approval for coverage. “You can shoot yourself in the foot down the road when you get sick and need better care,” she warns.

When considering the extras offered by Medicare Advantage plans, Caughill advises against letting them dictate your decision. “They’re like sprinkles,” she says. “The reason any of us have health insurance is for serious conditions like cancers, strokes, heart attacks, and chronic illnesses. Ensure you have adequate coverage for those before adding on the sprinkles, and prioritize keeping your deductibles and maximum out-of-pocket costs low.”

5. When major changes hit, consider returning to Original Medicare

If you’re on Medicare Advantage and your plan is discontinued or no longer serves your area, consider switching to

Original Medicare

and obtaining a Medicare Supplement Insurance, or Medigap, plan.

Medigap

plans help cover out-of-pocket costs, which can be unlimited under Original Medicare. “You should never be on traditional Medicare without having a Medigap plan,” McClanahan advises, as it exposes you to significant financial risk.

If you missed the opportunity to sign up for Medigap when you joined Medicare, you may face medical underwriting, making it challenging to find an affordable policy. However, certain significant changes, such as your Medicare Advantage plan shutting down or leaving your area, grant you “guaranteed issue rights.” This means Medigap insurers cannot deny you or charge you more based on your health.