Understanding which plan aligns with your wallet and risk tolerance is essential. Take this quick quiz to discover your "Medicare Personality Type" and learn whether you are better suited for the high-premium, low-copay freedom of a Traditionalist, or the low-premium, high-cap security of a Bundler.

You can find more information about Medicare and Medicare Advantage in the linked articles below.

More on Medicare and Medicare Advantage, from the Kiplinger retirement team:

• 12 FAQs About Medicare: Your Medicare Questions Answered
• 11 Costly Medicare Mistakes You Should Avoid Making
• Can You Sign Up for Medicare While Still on an Employer Health Plan?
• Medicare Open Enrollment Occurs Annually from October to December — Here's What You Need to Know
• Medicare Advantage Open Enrollment Runs from January 1 to March 31

The negotiated "maximum fair prices," made possible by the 2022 Inflation Reduction Act, promise to save the program $12 billion annually compared with last year's Medicare spending on 15 widely used drugs to treat cancer and other serious chronic conditions that hit older adults hardest.

Previously, the Biden administration reached deals to lower the costs of 10 prescription drugs, including several for heart disease and diabetes, which are set to take effect in 2026. This latest round of price negotiations will go into effect in 2027, with seniors expected to see an estimated $685 million in out-of-pocket relief.

Historically, prescription drug costs have wreaked havoc on many seniors' budgets, with some rationing doses or skipping their meds altogether due to high costs, according to a survey by research group KFF.

For the roughly 5.3 million Medicare beneficiaries who take these 15 medications, and the new $2,100 annual out-of-pocket cap in Medicare Part D, starting in 2026, 2027 can’t come soon enough.

For decades, Medicare was prohibited by law from negotiating drug prices directly with manufacturers, resulting in older Americans paying two to four times what patients in Europe or Canada paid for the same medicines.

Seniors like 72-year-old retiree Ryan Whitworth of Florida, who relies on Xtandl for prostate cancer, could see his monthly copays halved. “Finally, I won’t have to choose between meds and groceries,” he told Kiplinger. 

Below is the full list of the 15 drugs and their new Medicare maximum fair prices compared with the 2024 list prices. All figures are for a typical 30-day supply. The numbers are rounded to the nearest dollar where applicable.

The “2024 List Price” column shows the gross Wholesale Acquisition Cost (WAC) that Medicare Part D plans were charged in 2024 for a 30-day supply, before any rebates or discounts.

The “2027 Medicare Price” column is the Maximum Fair Price (MFP) manufacturers must offer Medicare starting January 1, 2027, for a 30-day supply.

Sources: CMS, November 2025 (pdf); Medicare prescription drug affordability fact sheet; Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability, Year 2027 (pdf)

List prices reflect typical Part D gross costs before rebates.

Related content

• 16 Strategies to Save Money on Prescription Drugs
• Here Are the 10 Medicare Negotiated Drug Prices
• Medicare to Cover Obesity Drugs Under Trump Deal for as Little as $50. What You Need to Know
• Seven Medicare Changes Coming in 2026
• Brace for Higher Health Costs in 2026: A Look at Projected Medicare Premiums

In addition to your regular premiums, you could also owe a monthly surcharge on your Medicare Part B and Part D premiums based on an income-related monthly adjustment amount (IRMAA). High earners will pay an additional Part B surcharge ranging from $81.20 to $487.00. The Part D surcharge can be as small as $14.50 and tops out at $91.00.

Medicare open enrollment runs from October 15 to December 7 annually. During this period, you can switch from original Medicare to a Medicare Advantage plan, or vice versa. You can also choose a new Advantage plan or Medicare Part D prescription drug coverage.

Medicare Part A deductible  

The Part A deductible for hospital admissions increases to $1,736 in 2026. That's an increase of $60, up from $1,676 in 2025. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.

There’s no limit to the number of benefit periods you can have in a year. This means you may pay the deductible more than once in a year.

For patients hospitalized for more than 60 days, the coinsurance amount in 2026 is $434 per day (up $15 from $419 in 2025) for the 61st through the 90th day of hospitalization. The coinsurance payment rises to $868 a day, up $30 from $838 in 2025, starting on the 91st day of hospitalization. For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period is $217.00, up $7.50 from $209.50 in 2025.

Reminder: Part A does not cover long-term care. It also does not cover most non-medical personal expenses, such as custodial care that helps with daily activities, such as eating and bathing.

Medicare Part B monthly premium

In 2026, the standard monthly premium is $202.90, up $17.90 from $185 in 2025. That is an increase of almost 10%. The annual deductible for all Medicare Part B beneficiaries is $283 in 2026, $26 more than the 2025 deductible of $257.

Part B covers doctor visits, outpatient services, home health care, durable medical equipment and many preventive services. You usually pay 20% of the Medicare-approved amount for Part B-covered services after you meet your deductible. This amount is called your coinsurance.

High earners will pay more. The income-related monthly adjustment amount (IRMAA) is a surcharge for people with income above a certain amount that must be paid in addition to their Medicare Part B and Part D premiums. The IRMAA is calculated every year. That means if your income is higher or lower year after year, your IRMAA status can change. If the SSA determines you must pay an IRMAA, you’ll receive a notice with the new premium amount and the reason for the determination.

This surcharge shifts costs back to the beneficiary. So, if you are a higher-income beneficiary, you will pay a larger percentage of the total cost of Part B based on income reported on your annual tax return. You'll pay monthly Part B premiums equal to 35%, 50%, 65%, 80%, or 85% of the total cost, depending on your income and subsequent surcharge amount.

In 2026, if your 2024 AGI is above $109,000 if you are single or $218,000 if you’re married and file jointly, you’ll pay an extra amount in addition to your plan premium. That surcharge ranges from $81.10 to $486.50.

Medicare Part D prescription drug plan

The average premium for a Part D standalone plan, which covers drug costs, is expected to be $34.50 in 2026, down $3.81 from $38.31 in 2025. If you have a Medicare Advantage plan that charges a Part D total premium, that cost is projected to decrease to $11.50 in 2026 from $13.32 in 2025, down $1.82.

The maximum Part D deductible is set at $615 for 2026, an increase of $25 from the 2025 deductible of $590. The cap on Part D out-of-pocket costs is $2,100, up $100 from 2025.

The cap on out-of-pocket expenses applies only to medications covered by your Part D plan and does not apply to spending on Medicare Part B drugs. Part B drugs are usually vaccinations or injections that a doctor administers, and some outpatient prescription drugs. However, some vaccines are covered at no cost, including flu shots and COVID boosters. The list of free vaccinations is updated annually.

Optional payment plan. Part D enrollees can spread out their out-of-pocket costs over the year rather than face high out-of-pocket costs in any given month. To do this, you would pay a capped monthly installment over the course of the calendar year instead of all at once at the pharmacy. Here's how that would work.

If you opt into the Medicare Prescription Payment Plan through your Part D sponsor, you won't be charged at the pharmacy; your plan is automatically notified. Instead, your plan will send you a monthly bill showing the amount owed for your prescriptions and payment instructions. Your regular monthly plan premium (if applicable) will be billed separately. You can directly opt in to the Medicare Prescription Payment Plan through your Part D plan sponsor.

IRMAA. A surcharge for high earners also applies to your Medicare Part D drug coverage. In 2026, if your 2024 AGI is above $109,000 if you are single or $218,000 if you’re married and file jointly, you’ll pay an extra amount in addition to your plan premium. That surcharge ranges from $14.50 to $91.00. You’ll be liable for this surcharge if your Medicare Advantage Plan includes Part D drug coverage

Tip: Medicare recommends beneficiaries consider getting a drug plan even if you don’t take many drugs now or your current out-of-pocket drug costs are low. If you enroll in a plan with a low monthly premium, you can avoid the late enrollment penalty. Since all plans must cover a wide range of drugs that people with Medicare take, it will come in handy if your needs change.

Medigap

Medicare doesn’t cover everything; there is a coverage gap often called the “doughnut hole.” Part B pays for 80% of doctors’ visits and other outpatient services. In addition, Medicare doesn’t cover supplemental services such as dental care, eye appointments, or hearing aids. You have two options for handling your uncovered expenses. You can purchase Medigap insurance to complement your original Medicare insurance or enroll in a Medicare Advantage plan.

Private insurers offer Medicare supplemental insurance or Medigap policies that cover deductibles and copayments. These policies are categorized by letters A through N. All plans offer the same basic benefits, no matter where you live or which insurance company you buy the policy from. Every policy that goes by the same letter must offer the same basic benefits; usually, the only difference is the cost.

Due to the phasing out of the popular Medigap Plan F, Plan G is now the plan of choice for many. The glaring difference between F and G is that Plan G does not cover the Part B deductible. Plan G also covers “excess charges” that doctors who don’t accept the Medicare-approved amount as full payment can charge you, up to 15% above the Medicare-approved amount for services and procedures. Anyone enrolled in Medicare before 2020 can still enroll in plans F and C.

If you choose a high-deductible F or G plan, you can expect to pay a deductible of $2,950 before your policy pays anything, including coinsurance, copayments, and deductibles. This is an increase of $80 over the 2025 deductible of $2,870.

Medicare Supplement Plan K and Plan L are cheaper than other Medigap policies and have an out-of-pocket limit. These two plans have lower monthly premiums since you’ll also share the coinsurance costs for your Plan K (50%) and Plan L (25%) up to your annual maximum limit.

Read What’s the Best Medigap Plan? to find out more about the 10 different Medigap plans you can choose from.

Medicare Advantage plans

A Medicare Advantage plan is an alternative to original Medicare, making Medigap coverage unnecessary. Medicare Advantage Plans are sometimes called “Part C” or “MA Plans." If you join a Medicare Advantage Plan, you’ll still have Medicare, but you’ll get your Part A and Part B coverage from your Medicare Advantage Plan. You are prohibited from buying a Medigap plan while enrolled in an MA plan.

These plans provide medical and prescription drug coverage through private insurance companies. Depending on the plan you choose, the monthly premium, in addition to the Medicare Part B, will vary. The average monthly premium will decrease to $14.00 in 2026, down $2.40 from $16.40 in 2025.

Advantage policies charge lower premiums than Medigap plans but may have higher deductibles and copayments, and your choice of providers may be more limited than with original Medicare. Some enrollees may need to find new coverage, as some major insurers have reduced the number of plans they are offering in 2026. Check your Annual Notice of Change to see if the plan reductions impact you.

Unlike original Medicare, Medicare Advantage plans have a maximum out-of-pocket limit. In 2026, your maximum expenses are $9,250 for in-network services and $13,900 for out-of-network services. This is a decrease from $9,350 and $14,000, respectively, in 2025. However, plans may set lower limits that apply only to Parts A and B and do not include Part D costs.

Related Content

• Medicare Premiums 2026: IRMAA Brackets and Surcharges for Parts B and D
• Cash In on Your Medicare Advantage Flex Card Perks Before They Disappear
• 9 Medicare Changes Coming in 2026

Most people think of retirement in two stages: accumulation, when you save and invest, and distribution, when you start spending. But there's a crucial middle phase that rarely gets the attention it deserves — the Critical 15.

These five years before you stop working and the first 10 after often determine how confident and comfortable you'll feel for the rest of your life.

It's the transition period in which paychecks end, withdrawals begin, and every decision carries extra weight.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Many retirees enter this phase unprepared, caught off guard by unexpected tax bills, Medicare surcharges or market downturns that hit just as they start drawing income.

How do you turn awareness into action? The first step in navigating the Critical 15 is creating a plan for a steady income so you can have control, flexibility and peace of mind no matter what the markets do.

Income planning during the Critical 15

The first step is learning how to create your own "retirement paycheck". Separate essentials (housing, health care, food) from discretionary expenses (travel, hobbies, gifts).

Your budget should work like a dashboard, giving you a clear view of your spending and helping you make adjustments, not a diet that makes you feel restricted.

Once you understand what you'll need to spend, the next step is deciding where that money should come from and when. The timing and source of your withdrawals can make a major difference in how long your savings last and how much you pay in taxes.

Social Security timing. The right time to claim isn't just about the biggest check, it's about how your benefits interact with taxes and investment withdrawals. In some cases, filing earlier can help preserve investments during a market downturn by reducing the need to sell assets at low prices.

Account sequencing. The order you draw from pretax, Roth or brokerage accounts directly affects how long your savings last. Instead of spending down one type of account first, it can be smart to blend withdrawals to help keep your taxable income consistent over time.

For example, you might pull from Roth accounts in high-income years or during market downturns and use taxable funds when gains can be realized at lower rates. The goal is to smooth your tax bill over the years rather than face costly surprises later.

Spending guardrails. Instead of sticking to a rigid 4% rule, build flexibility into your plan. Set spending thresholds that tell you when to adjust. If markets rise and your portfolio grows, you can safely increase withdrawals.

If markets drop, scale back slightly to give your investments time to recover. This approach keeps your plan sustainable without forcing unnecessary sacrifice when times are good or panic when they're not.

Retirement tax planning during the Critical 15

Income planning doesn't stop once you've figured out where the money will come from — it's just the start.

The real opportunity lies in how you manage taxes on that income, especially during the Critical 15 when small decisions compound over time. For most retirees, this is the last and best window to shape your lifetime tax bill.

Several moving parts make this period especially complex:

Social Security and taxes. Up to 85% of your benefits can be taxable, depending on how much other income you earn. Coordinating withdrawals and benefit timing helps you avoid unnecessary tax on your Social Security.

Medicare premiums. Higher income can trigger IRMAA surcharges, which are based on your tax return from two years earlier. Managing income levels in your early retirement years can prevent these surprise costs.

Account mix. Many retirees have most of their savings in pre-tax accounts, which can backfire when required minimum distributions (RMDs) begin. Building tax diversification early — across taxable, pre-tax and Roth accounts — gives you more control of your tax bracket later.

Heirs' taxes. A surviving spouse often ends up in a higher tax bracket filing as a single taxpayer, and non-spouse heirs must now empty inherited IRAs within 10 years. Thoughtful planning can reduce that future burden.

The most effective moves in this phase often include Roth conversions, in which you gradually shift money from pretax to Roth accounts to create tax-free income later, and tax diversification, blending withdrawals across account types to keep your effective tax rate steady over time.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

These steps might not make a big splash in a single year, but over a 20- or 30-year retirement, they can save hundreds of thousands in taxes and add years of longevity to your portfolio.

Investment planning during the Critical 15

The Critical 15 also brings one of retirement's biggest risks: sequence of returns — poor market performance early on that permanently damages your portfolio. Selling during downturns locks in losses and can derail even strong savers.

To protect yourself:

• Build a "war chest." Hold three to five years of essential expenses in stable assets such as Treasuries or short-term bonds.
• Match risk to timeline. Keep near-term funds conservative, but let long-term money keep growing.
• Stick to your plan. Reacting to headlines often hurts more than it helps. Let your strategy (not emotion) drive decisions.

Key steps to take during the Critical 15

After you've looked at income, taxes and investments, it's time to bring the pieces together. A checklist highlights the most important actions to take and revisit to stay organized and on track through this critical transition.

• Start early. Begin at least three years before your Critical 15 phase is due to begin. This will allow time to align your investments, taxes and income strategy.
• Build a flexible income plan. Design a spending approach that adjusts for markets, health costs or lifestyle shifts — think dashboard, not diet.
• Be proactive with taxes. Use Roth conversions, smart withdrawal sequencing and charitable giving to reduce your lifetime tax bill.
• Create a safety reserve. Keep several years of spending in low-volatility assets to weather market declines without panic selling.
• Plan for health care. Understand how income affects Medicare premiums and explore options such as health savings accounts (HSAs) or supplemental insurance.
• Revisit regularly. Update your withdrawal plan, tax projections and investment mix at least once a year — or sooner if life changes.

The Critical 15 isn't just another planning concept — it's the phase in which everything you've built finally comes together.

By coordinating income, taxes, investments and health care during this window, you gain flexibility and confidence for the years ahead.

Related Content

• A 10-Year Retirement Planning Checklist
• The 'Rule of 25' for Retirement Planning
• Retirement Income Strategies for the Long Haul
• I'm a Financial Planner: Here Are Five Phases of Retirement Planning You Have to Get Right
• How to Create Retirement Income That's Driven by Cash Flow

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

The Medicare surcharge in 2026 will apply to beneficiaries with income exceeding $109,000 (for single filers and married filing separately) or $218,000 (for joint filers). For these beneficiaries, total monthly Part B premiums will range from $284.10 to $689.90. Part D surcharges will range from $14.50 to $91.00.

The IRMAA is calculated on a sliding scale with five income brackets, topping out at $500,000 for individual filing and $750,000 for married, filing jointly. These figures, except for the top bracket, are inflation-adjusted annually. For 2026, these inflation-adjusted brackets range from $109,000 to $205,000 for single tax filers and $218,000 to $410,000 for joint filers.

IRMAA calculations have a two-year lag. Whether you pay an IRMAA in a given year depends on your tax returns from two years ago.

The IRMAA applies to all Medicare and Medicare Advantage beneficiaries whose earnings are high enough to make them eligible. The IRMAA is a cliff surcharge: just $1 over the limit will trigger surcharges for both Parts B and D. Income planning in the years leading up to Medicare eligibility can help beneficiaries avoid the surcharge.

Here's a look at the IRMAA and what it might cost you in 2026.

The IRMAA for 2026 

IRMAA is a surcharge that some Medicare enrollees must pay in addition to regular Medicare Part B and Part D premiums. The surcharge is based on your Modified Adjusted Gross Income (MAGI) from two years ago. In other words, your 2026 IRMAA liability is based on your MAGI from 2024.

Medicare determines the 2026 IRMAA charge in the 4th quarter of 2025. That is why your IRMAA determination is based on 2024 filing status and income — it's the latest data point the Social Security Administration (SSA) can obtain from the IRS to determine your 2026 IRMAA liability.

The SSA determines who pays an IRMAA based on the income reported two years prior. The SSA looks at your 2024 tax returns to see if you must pay an IRMAA in 2026.

You can easily determine your 2026 Part B and Part D total premiums by adding the income-related monthly adjustment amount to the 2026 premium costs. For 2026, the Part B premium is $202.90, and the Part D stand alone premium is, on average, $46.50.

The 2026 IRMAA surcharge amounts for Part B range from $81.20 to $487.00.

The income brackets and inflation adjustments. The first four brackets of the IRMAA are indexed for inflation annually. However, the 5th bracket is currently frozen and can be indexed for inflation beginning in 2028.

The indexing is determined by how much the average CPI-U over the 12 months ending in the most recent August has increased compared to the average CPI-U for the previous 12-month period.

Couples that are liable for the IRMAA will pay a higher surcharge when filing separately. Why? The range of brackets and surcharges for married couples that file separately are narrower:

Types of income that trigger the IRMAA

The modified adjusted gross income (MAGI) used to determine IRMAA is generally calculated by taking your Adjusted Gross Income (AGI) and adding back specific types of income that were excluded from AGI. In simple terms, for most people, the MAGI for IRMAA is the sum of their Adjusted Gross Income (AGI) from their tax return plus any tax-exempt interest income.

Adjusted Gross Income (AGI): This encompasses most sources of taxable income, such as:

• Wages and salaries
• Taxable portion of Social Security benefits
• Distributions from traditional IRAs, 401(k)s, and other tax-deferred retirement accounts (including Roth conversions)
• Interest (taxable) and dividends
• Capital gains
• Pension and annuity income
• Rental and royalty income
• Business income

Tax-exempt interest income. The IRMAA-specific MAGI is primarily your:

Adjusted Gross Income (Form 1040, Line 11) + your tax-exempt interest (Form 1040, Line 2a). That tax-exempt interest includes: interest from municipal bonds, tax-exempt dividends, and interest from U.S. Savings Bonds used for qualified higher education expenses would be added back to your AGI . This is a key "add-back" that often pushes retirees over an IRMAA threshold.

Income planning the best way to avoid the IRMAA

That is a crucial area of retirement planning. The core strategy for avoiding or reducing IRMAA is to lower your Modified Adjusted Gross Income (MAGI) in the relevant year, which is typically two years before the year you pay the premium.

Here are the most robust income planning tactics to manage your MAGI and mitigate IRMAA:

• Optimize your retirement account withdrawals (The "Roth Strategy") — Since withdrawals from traditional IRAs, 401(k)s, and RMDs (Required Minimum Distributions) are generally included in MAGI, while Qualified Roth withdrawals are not, strategic use of Roth accounts is the most powerful tool you have to reduce your MAGI and limit your exposure to the IRMAA.

Here are three other ways to reduce your MAGI:

• Utilize Qualified Charitable Distributions (QCDs) to reduce the impact of RMDs.
• Manage investment income to avoid large capital gains spikes and harvest tax losses.
• Time and structure your income, by accelerating or deferring income, to limit unavoidable IRMAA liability, "take the IRMAA hit" for only one two-year period.

How to pay your IRMAA

Your monthly Medicare Part B and D IRMAA charges are deducted automatically from your Social Security check, with two exceptions: if you have opted to defer your Social Security benefits and do not receive a Social Security check, or if the amount of your Social Security check is not large enough to cover your IRMAA. In that case, you will receive a bill for the unpaid IRMAA balance from the Centers for Medicare & Medicaid Services (CMS).

IRMAA surcharges for Part B and Part D are paid separately. Part B IRMAA is automatically added to your monthly premium bill. The Part D IRMAA must be paid directly to Medicare, not your plan or employer.

It’s your responsibility to pay it even if your employer or a third party (e.g., retirement system) pays your Part D plan premiums. You’ll get a bill each month from Medicare for your Part D IRMAA, and you can pay it the same way you pay your Part B premiums.

You have three ways to pay your Medicare IRMAAs online — either through your MyMedicare account, your bank’s bill pay service or you can automate the process by using Medicare Easy Pay. I recommend using a MyMedicare account. It is safe, secure, and there is no fee to make a payment. You’ll need to know your Medicare number and your Medicare Part A start date to create your account. You can find both on your Medicare card.

Lastly, you can send your payment by mail to Medicare Premium Collection Center, PO Box 790355, St. Louis, MO 63179-0355.

Plan to avoid the IRMAA

You should be mindful of the risk of a one-time spike in income that could trigger the IRMAA, such as the proceeds from a home sale or converting your traditional IRA to a Roth IRA. To avoid this risk, be sure to properly time a Roth conversion; you can then avoid the IRMAA when you take tax-free distributions. Learn more about strategies, such as how to lower taxes on required minimum distributions that could otherwise trigger the surcharge.

If your income suddenly dropped due to a major life event or change of circumstances, you do not have to wait two years for the IRMAA to adjust. You can appeal the surcharge with SSA using Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event).

Related Content

• What You Will Pay for Medicare in 2026
• What is the IRMAA (Income-Related Monthly Adjustment Amount)?
• 9 Things You Must Know About Medicare's Income-Related Monthly Adjustment Amount (IRMAA) Surcharges
• How to Appeal the IRMAA for Medicare Parts B and D

With the new deal, Medicare will no longer only cover these drugs for diabetes or heart issues, but for obesity itself, potentially saving beneficiaries hundreds of dollars each month.

Why it matters: In the U.S., over 30% of adults age 65 or older are considered obese — having a body mass index (BMI) of 30.0 or higher — according to America's Health Rankings. The Centers for Disease Control and Prevention (CDC) estimates the prevalence of obesity among all American adults to be 40%.

Before the deal, these injectables cost $1,000 or more per month, making it difficult for many retirees to afford. Trump’s deal promises lower government pricing and copays, which is considered a game-changer for the 65 million people currently on Medicare.

With the new deal, people buying GLP-1 medications directly from the manufacturers (or through a new portal called TrumpRx) will pay an average of $350 per month to start, with the companies having committed to lowering the price to roughly $250 over the next two years.

The price of Ozempic ($1,000 per month) and Wegovy ($1,350 per month) will decrease to $350 per month when purchased through TrumpRx or directly through the manufacturers. The prices of Zepbound and Orforglipron (if approved) will fall from $1,086 per month to an average of $346 per month, per the White House.

If the FDA later approves the oral version of Wegovy, or similar GLP-1 pill-form drugs in each company's portfolio, TrumpRx will price the initial monthly dose at $150.

Medicare beneficiaries will have access to some GLP-1 drugs approved for both obesity and diabetes for a $50 copay. The manufacturers have agreed to cut the price Medicare pays to $245, to help cover the costs of increased coverage of weight-loss drugs.

The agreements also call for Novo Nordisk to commit $10 billion and Eli Lilly to commit $27 billion to boost their U.S. manufacturing, effectively securing a reprieve from potential tariffs.

Trump promoted the deal as "the biggest price cut in history," but the rollout is slow. TrumpRx is expected by December 2025, with full integration by Medicare in mid-2026.

To understand the savings to Medicare and Medicaid recipients, here's a quick comparison:

Additionally, the deal also provides reduced costs on other Eli Lilly and Novo Nordisk medicines.

For example:

• Emgality, a treatment for migraines, will cost $299 per pen, a discount of $443 off of the list price.
• Trulicity, a commonly used diabetes medicine, will cost $389 per month, a discount of $598 off of the list price.
• Widely-used insulin products, including NovoLog and Tresiba, will cost $35 per month in supply.

Key facts:

• Drugs involved: Ozempic and Wegovy, Mounjaro and Zepbound. Down the line, oral versions like Orforglipron may be included.
• Price cuts: Medicare will pay $245 per month, down from list prices of about $1,000 to $1,350. Beneficiaries pay a maximum copay of $50. Direct-to-consumer via TrumpRx or the manufacturers: $350/month now, $250 in two years, with oral starters at $149.
• Expansion of coverage: Obesity and weight loss will be included for the first time under Medicare coverage if tied to comorbidities, such as heart or kidney disease, or severe obesity. This will affect about 10% of Medicare enrollees. Medicaid states it will see the same rates.
• Rollout: TrumpRx by year-end 2025. Medicare mid-2026

What does this mean for Medicare beneficiaries?

For a Medicare beneficiary who is diabetic, obese, and living on a fixed income, the deal could mean the availability of proven GLP-1s without breaking the bank. The deal could also open doors for those with heart or kidney issues, and address obesity's $173 billion annual Medicare tab.

Besides the good news, access hinges on the plan's adoption. Will it become voluntary for Part D? And, copays, although capped, can add up over the long term. Early adopters via TrumpRx will get relief now, but most will wait until summer 2026.

Deal seeks to balance targeted relief and tariffs on big pharma

The United States has less than 5% of the world’s population, yet roughly 75% of all global pharmaceutical profits come from American taxpayers. As it stands now, Trump's GLP-1 deal is attracting both praise and skepticism, as it strikes a balance between imposing tariffs on the pharmaceutical industry and targeted relief to aid Medicare's most vulnerable.

If all goes as planned, the deal would transform access, slash monthly costs for injectables and lift the burden for low-income Medicare retirees. According to David Certner, a former AARP staff member, "This levels the playing field for seniors who've been priced out."

Will you benefit? Check eligibility at medicare.gov or trumpRx.gov.

Related content

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• Dental Cost Advice for New Retirees, From a New Retiree
• Seven Medicare Changes Coming in 2026
• Brace for Higher Health Costs in 2026: A Look at Projected Medicare Premiums
• Prior Authorization Coming to Traditional Medicare Starting in 2026

Many Medicare Advantage (MA) enrollees are issued flex cards — preloaded debit cards that can be used for certain health- and wellness-related expenses that MA plans might not cover outright. These expenses can include over-the-counter (OTC) medicines and supplies, hearing, dental and vision services and more.

If your Medicare Advantage plan includes a flex card allowance, you have until the end of 2025 to use the funds. These cards operate on a "use-it-or-lose-it" basis, and any balance remaining on the card when the clock strikes midnight on December 31 will be forfeited.

Don't miss your final opportunity to cash in on benefits you've already paid for, ensuring you maximize every dollar intended for your health and wellness.

What are Medicare Advantage flex cards?

A flex card is a prepaid debit card offered by some private insurance companies through their Medicare Advantage (Part C) plans. Flex Cards are a supplemental benefit offered by private insurers, not by the federal government or original Medicare.

The card is preloaded with a specific dollar amount (an allowance), which can be added monthly, quarterly or annually, depending on your specific plan. Allowances typically range from a few hundred dollars to over a thousand annually.

Use of the card is restricted. The card can only be used for a list of approved, health-related expenses designated by your plan.

The card only works at participating retailers, such as pharmacies, grocery stores, dentists or eye doctors that accept the card's network. If you try to buy an ineligible item or shop at a nonparticipating store, the card will be declined.

Most Flex Card allowances don't roll over. Funds usually expire at the end of the calendar year (December 31), or, in some cases, at the end of the quarter or month they were issued.

Covered expenses vary by plan

Although most MA enrollees are in plans that offer dental (98%), vision (100%), hearing (96%), and OTC medication (88%) benefits, according to the Commonwealth Fund, findings show that many of these enrollees do not report using them.

Medicare Advantage plans were supposed to begin sending plan participants midyear reminders, “Mid-Year Enrollee Notification of Unused Supplemental Benefits,” this past July. However, this rule has been paused by the Centers for Medicare and Medicaid due to industry concerns and requests for guidance.

Don't let the opportunity to access additional resources go unused. Use some of our suggestions, or use the list as a jumping-off point to find goods or services that would better suit your needs.

What to buy before the end of the year

Since most flex card allowances operate on a strict "use-it-or-lose-it" basis by December 31, it's essential to spend any remaining balance before the deadline.

Beneficiaries should focus on buying non-perishable health essentials that they know they will use in the first few months of the new year or services not otherwise covered by their Medicare Advantage plans.

One easy way to exhaust your remaining flex card benefit is to stock up on non-perishable over-the-counter (OTC) items:

• Vitamins/supplements: Purchase common daily vitamins such as vitamin D, C, multivitamins or fish oil
• Over-the-counter medications: Stock up on pain relievers, cold/flu medication, allergy meds, antacids and laxatives
• First aid supplies: What's running low or missing from your kit? See if you need bandages, gauze, antiseptic wipes, antibiotic ointments, heating pads or cold packs.
• Personal care supplies: Replenish your supply of toothpaste, toothbrushes, denture cream and contact lens solution.

If you have a large remaining balance, consider buying more expensive medical equipment that's durable, such as a walker or cane. You might also want to purchase a shower chair or grab bars for bathroom safety.

Other options could include a new blood pressure monitor, glucose monitor or replacement batteries for hearing aids. If your plan covers it, consider getting a low-cost fitness tracker or some light exercise equipment.

Check with your Medicare Advantage plan for the details

Don't let this benefit go to waste. I've given you the general outlines of how flex cards work; you should investigate to find out the details of how your particular benefit works. Contact your Medicare Advantage plan or check their website for help. Information you need to fully understand your benefit:

1- Check the expiration date: Call your Medicare Advantage plan or check your member portal immediately to confirm the exact expiration date of your remaining balance.

2- Verify your balance: Find your current exact balance. Don't rely on memory.

3- Review the approved list: Re-read your plan's benefit guide or check the list of approved retailers and goods to ensure your final purchases will be covered at the store you plan to visit

Related Content

• Medicare Premiums Projected to Jump in 2026
• Seven Medicare Changes Coming in 2026
• Medicare Premiums 2026: Projected IRMAA Brackets and Surcharges for Parts B and D
• Your Medicare Costs Are Set to Soar: What to Expect Over the Next Decade

As I mentioned in an earlier column, I opted for original Medicare and a Medigap plan when I retired. I made this decision because with a Medicare Advantage plan, I would have been limited to using in-network doctors and other providers. Likewise, while many Medicare Advantage plans include dental care, the coverage is usually restricted to providers in their network.

In addition, Medicare Advantage plans often impose waiting periods of six months to two years before they pay for expensive procedures, such as crowns and dentures. Preventive care is usually covered immediately, but you'll typically face an annual cap on coverage — an average of $1,300, according to a 2021 survey by health-policy research organization KFF.

In my case, signing up for Medicare Advantage would have required me to switch to an in-network dentist to get coverage, something I'm reluctant to do because I've been a patient of the same practice for more than 20 years. I'm pretty sure I'm putting my dentist's children through college, but I still have most of my teeth, so I consider that a fair trade-off. (Due to bad youthful habits and some congenital issues, there are more bridges and canals in my mouth than there are in Venice).

Ways retirees can lower dental costs

For retirees like me, there are other ways to lower dental costs, although all of them have limitations. One option is a stand-alone dental insurance plan, which many major providers offer. Premiums range from $20 to $80 a month, depending on the services covered and annual caps.

But before you sign up for one of these plans, scrutinize the fine print. Most plans will cover only a portion of the cost of certain procedures, such as fillings and root canals, and limit annual payouts; in some cases, the cap is as low as $1,000. Some have waiting periods of 12 months or more before they'll cover some procedures.

And to use the coverage, you'll probably have to visit a dentist within the plan's network. When I plugged my zip code into the search engine for a well-known dental insurance plan, I discovered that there weren't any participating dentists within 30 miles of my home.

A discount plan is another possibility. These plans aren't insurance — they simply offer members a discount ranging from about 15% to 50%, depending on the dentist and procedure. If your dentist participates in one of these programs, or you don't mind switching to one who does, this could save you some money. I was offered access to a discount plan through my Medigap policy at no cost.

In other cases, participants may pay a membership fee. (You'll have to estimate whether your savings from the discount will surpass the fee.) For example, a dental practice in my neighborhood offers discounts of 20% to 30% for a one-time membership fee of $199.

Unfortunately, my dentist doesn't participate in one of these programs, either, so I'm planning to use money I accumulated in my health savings account to pay for my dental work. Although you can't contribute to an HSA after you enroll in Medicare, you can use the funds tax-free to pay for a variety of health-related out-of-pocket costs.

I'm also going to talk to my dentist about other ways to save money, such as spreading out X-rays and fluoride treatments. And I'll continue to floss. Now that I'm paying the entire tab, it's more important than ever.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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You can also switch from original Medicare to a Medicare Advantage plan (or vice versa), and weigh your Part D prescription drug plan coverage against other options.

If you choose original Medicare (Part A and Part B), you can also buy a Medicare Supplement Insurance (Medigap) policy from a private insurance company to cover services and out-of-pocket costs not covered by original Medicare.

It's important to note that you can only buy Medigap if you have original Medicare. That means you must sign up for Medicare Part A and Part B before you can buy a Medigap policy.

Medigap Open Enrollment

According to Medicare, you have a six-month Medigap Open Enrollment period, which starts the first month you have Medicare Part B (medical insurance). During these six months, you can enroll in any Medigap policy, and you can’t be denied coverage for any pre-existing health problems.

After six months, you might not be able to buy a Medigap policy, and if you can, it could cost more. The Medigap Open Enrollment period only happens once and doesn’t repeat yearly such as Medicare Open Enrollment.

Stay tuned for live updates: Medicare Open Enrollment 2026 Live Updates: We'll Be Back on December 1 for the Final Week of Open Enrollment

What is Medigap?

Most states offer 10 different Medigap plans sold by private insurance companies. They're named A-D, F, G, and K-N, and the price is the only difference between the plans.

Medigap Plan G provides the most comprehensive coverage and continues to be the most popular plan in 2025, accounting for approximately 39% of all policyholders, according to KFF. Plan F came in second (36%).

You might also be able to buy another type of Medigap policy called Medicare SELECT, which is only available in some states. If you choose a SELECT policy, you have the right to change your mind and switch to a standard Medigap policy within 12 months.

If you live in Massachusetts, Minnesota and Wisconsin, Medigap policies are standardized differently. Medigap must follow federal and state laws meant to protect you, but illegal practices by insurance companies can happen, so do your research when shopping for a Medigap policy.

What does Medigap cover?

Medigap policies help cover out-of-pocket costs, such as co-insurance, copayments and deductibles associated with original Medicare — nationwide. Some Medigap policies might also cover foreign travel emergency care, which gives you an extra layer of well-being when you travel outside the U.S.

Note: Although plans E, H, I and J are no longer sold, they still cover foreign travel emergency care if you're enrolled in one of these plans. If you want prescription drug coverage, you can enroll in a separate Medicare drug plan (Part D).

What does Medigap not cover?

Although Medigap plans cover all or part of original Medicare’s additional fees, it doesn’t cover everything, such as long-term care, elective surgeries, hearing aids, eyeglasses, vision and dental care and private-duty nursing.

Not all plans cover Part B deductibles. It's also worth noting that Medigap plans sold after 2005 don’t include prescription drug coverage.

Pros and cons of Medigap insurance

Medigap covers items and services not covered by original Medicare and significantly extends hospital, skilled nursing and travel coverage. But there are a few disadvantages worth looking at before you sign up.

Medigap and Medicare have different Open Enrollment windows and policies

The initial enrollment period for Medicare is a seven-month window, which starts three months before your 65th birthday, the month you turn 65 and the three-month period after your birth month.

If you fail to enroll for Original Medicare during the initial enrollment period, you’ll get another chance during Medicare Open Enrollment, which happens from October 15 through December 7, 2025.

You have a six-month Medigap Open Enrollment period, which starts the first month you have Medicare Part B (medical insurance). During these six months, you can enroll in any Medigap policy, but after the six-month period, you might not be able to buy a Medigap policy, or it might cost more if you do.

The Medigap Open Enrollment period only happens once and doesn’t repeat every year such as Medicare Open Enrollment. Time is of the essence.

Still working? You can sign up for Medicare even if you’re still on your employer’s health plan.

Read: Seven Medicare Changes Coming in 2026.

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• Medicare Premiums 2026: Projected IRMAA Brackets and Surcharges for Parts B and D
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• 2026 Social Security COLA is 2.8%: What You Need to Know

Last week, some employees of the Bureau of Labor Statistics were recalled to complete the September CPI report. This report contained data that was essential to computing the 2026 Social Security COLA. That report was released on October 24, nine days after its scheduled release date of October 15.

Addressing the operational issues

The decision to bring back the furloughed workers comes at a crucial juncture. The Medicare Open Enrollment period that runs from October 15 – December 7 is already underway, and the ACA Marketplace Open Enrollment will begin soon on November 1 and run until January 15. Together, these periods represent a vital window during which millions of Americans enroll or change their health coverage for the coming year. Losing thousands of workers during this period could undermine beneficiaries' ability to find and enroll in the best health care plan for their needs and budget.

A CMS spokesperson told the Federal News Network that the recall was necessary "to best serve the American people amid the Medicare and Marketplace open enrollment seasons."

The recall highlights the vast responsibilities of CMS, which provides health coverage for over 160 million Americans through its programs: Medicare, Medicaid, and the ACA Marketplaces. Without sufficient staffing, even mandatory federal programs, which are largely protected from a shutdown, such as Medicare, can face administrative issues and staffing shortfalls that directly impact beneficiaries.

Funding the furlough fix

An interesting aspect of the recall is the funding mechanism used to pay the employees. To avoid violating government shutdown rules, CMS announced that the returning employees will be paid through user fees collected from sharing data with researchers, a funding stream separate from the lapsed congressional appropriations, according to Reuters.

While this solution ensures staff are paid and operations can continue for the time being, it is temporary, and the duration of the recall remains unknown.

With the cost of next year's health plans still unknown for many, the increased staffing at the CMS provides some assurance that the enrollment process itself will not be interrupted or impeded by the current political stalemate.

The CMS staff recall shows that the agency’s mission is critical — and the deadlines too immovable — to be subject to ordinary shutdown procedures. It is an information lifeline extended to the millions of Americans who depend on a functioning enrollment system to secure their health coverage.

Related Content

• How Medicare Is Affected by a Government Shutdown
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• Seven Medicare Changes Coming in 2026
• Medicare Premiums Projected to Jump in 2026
• Medicare Premiums 2026: Projected IRMAA Brackets and Surcharges for Parts B and D

We've come to the fourth and final installment of our deep dive into the top 20 most common financial myths.

Throughout this series, we've examined a wide variety of topics, from stock and bond performance to retirement readiness, life insurance, Social Security, income taxes and more.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Here are myths 16-20, along with the facts:

16. Social Security and Medicare are 'entitlements' funded by the government (i.e. taxpayers)

Most people think of an entitlement as something they get for free, regardless of whether they work for a living.

But American workers pay into Social Security and Medicare their entire working lives (if you're self-employed, you're paying twice as much), so these programs aren't freebies.

However, it's important to remember that Social Security isn't an income replacement. Those on the lower end of the spectrum might receive about 65% to 80% of their earned income.

Higher-income earners will get a lot less, as a percentage, since Social Security benefits plateau at $61,000 per year for 2025.

Ultimately, Social Security and Medicare are crucial benefits but should ideally work alongside your other investments (company-sponsored 401(k), individual retirement account and self-directed accounts) to provide you with income in retirement.

17. Since life insurance payouts are income tax-free to my heirs, I won't owe estate taxes on these payouts

When someone with life insurance dies, their beneficiaries receive the policy's face value as a tax-free benefit.

But when their spouse or child prepares the decedent's final tax return, the estate might owe state or federal estate taxes, depending on how large the estate is.

While life insurance comes to you income tax-free, remember there are different types of taxes, and the decedent's estate could still be taxed.

If you're wealthy, you should consider taking extra steps to protect your estate. You can do this by transferring your life insurance policy into an irrevocable life insurance trust (ILIT), in which your beneficiaries, not the decedent, own the trust, so life insurance proceeds are not part of the decedent's taxable estate.

Another similar option for married couples is to open a spousal lifetime asset trust (SLAT), which allows the decedent's spouse to live off the income produced by the trust while the asset itself remains in the SLAT and is exempt from estate tax liabilities.

18. Reverse mortgages are 'bad' and make no financial sense for homeowners

As a financial planner, I reject the notion that any one financial strategy is inherently "good" or "bad." I consider each client's specific situation and recommend a plan that is right for them.

While reverse mortgages have gotten a bad rap for years, they can be an effective tool for a specific type of client: people who are income-poor but asset-rich.

Rules and regulations around reverse mortgages and, specifically, HECMs (home equity conversion mortgages) have been updated to protect against most of the problems incurred by consumers decades ago.

Several years ago, I worked with a retired woman who lived in a fully paid off house in a wealthy neighborhood, but had no income outside of Social Security.

She needed additional income, wanted to stay in her home, was estranged from her children and planned to leave her estate to charity. This could be a perfect scenario for taking out a reverse mortgage.

When you obtain a reverse mortgage, you're converting home equity into an income stream. The bank or mortgage provider determines the maximum size of your loan based on age, interest rate and equity.

Unfortunately, in a high-interest rate environment, you can burn through your equity quickly, so borrowers should think carefully about the potential impact it can have on beneficiaries.

Typically, clients have other assets to sell or borrow against for income, so reverse mortgages aren't something I normally recommend, though they can be very effective when used strategically.

19. Since I raised our children and never paid into Social Security, I won't be eligible for Social Security benefits

If you're a nonworking spouse, you can access up to 50% of your working spouse's Social Security benefit while they are alive, meaning that, for example, a woman whose husband qualifies for $4,000 in benefits will qualify for up to $2,000 of her own benefits.

In a case in which the husband dies first, she would then qualify for the survivor benefit at the higher amount, $4,000.

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Additionally, a divorced spouse can qualify for a portion of their former spouse's benefit if they were married for 10-plus years and haven't subsequently remarried.

Your spousal benefit won't impact your ex-spouse's own benefit; they won't even know you're receiving it.

20. Responsible financial planning dictates that individuals should carry life insurance throughout their lifetimes

People often think they need to carry life insurance throughout their lives, but that's wrong. As a financial planner, I look at life insurance primarily as a replacement for income when someone is in their working years and has others who depend on their salary (e.g., spouse, children).

If a couple has had a successful working life, made money and invested it smartly, there might be no need for life insurance, because there is no income to protect after they retire.

There are other reasons to carry life insurance. Wealthy people who own businesses or real estate often take out life insurance for liquidity at their passing.

For example, I used to work with a farmer in the Midwest who owned 1,000 acres of farmland valued at about $10 million; he had no other assets.

By taking out life insurance, he can provide his family with cash to pay any taxes owed on his estate, avoiding a potential fire sale and allowing his heirs to (potentially) continue farming the family's land.

Beyond estate taxes, some people take out policies for philanthropic pursuits, to leave a legacy or establish a scholarship or foundation, but it's unnecessary to do so from a pure income-replacement standpoint.

Knowledge is power. Now that we've gone through the full list of 20 financial myths, you can set the record straight when a friend or relative makes a simplistic or incorrect statement such as "Social Security is going bankrupt," or "investing in the S&P 500 means you're broadly diversified."

Financial planning is complex and not conducive to black-and-white answers. That's why it's important to speak with a knowledgeable professional who can guide you through the process and devise strategies that are right for you, your family and your unique circumstances.

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• Five Retirement Myths vs the Reality
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• IRA vs Roth vs 401(k): Which Do You Pick?

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

While there are several parts to Medicare and various plans to choose from, it's crucial to pay extra attention to your prescription drug coverage plan, or Part D, because failing to do so could come at a significant cost.

Each year, insurers adjust copays, premiums, formularies (the list of medications covered by your insurance), preferred pharmacies and in-network providers. They can also adjust the way medications are grouped and priced.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Drugs are grouped into tiers that each carry a different cost. For example:

• Tier 1 consists of generic drugs and has the lowest copay
• Tier 2 includes preferred brand-name drugs with a moderate copay
• Tier 3 is for nonpreferred brand-name drugs and typically come with a higher copay
• Tiers 4 and 5 are for specialty drugs and carry the highest cost

Depending on the insurer, they may choose to move one drug from Tier 1 to Tier 2, or drop coverage on the medication entirely, which could significantly change how much you pay. If you're unaware of the change, you will miss out on finding a better plan and could end up spending more than you can afford.

This is the first step

With so much to consider, it can be difficult to know how to review your plan. The first step is to head to Medicare.gov's Plan Finder, where you can review plans for 2026. Make a list of your medications and look for plans that cover them.

You'll also want to make sure your provider and pharmacy are still in-network to minimize out-of-pocket costs.

It's also important to look beyond the plan's premiums. A plan that looks less expensive at first may actually cost you a lot more over the course of the year once you factor in copays/coinsurance, deductibles and medication tiers.

A Part D plan may have a low monthly premium, but if you take brand-name or specialty drugs, the copays/coinsurance could be much higher.

For example, let's say you're comparing two plans: Plan A and Plan B. Plan A has a monthly premium of $10, with a $40 copay for your main medication. With this plan, your annual premium is $120.

Assuming you're paying $40 each month for your medication, you're out-of-pocket costs for the year total $480. This brings your total annual cost to $600.

Plan B, on the other hand, has a monthly premium of $35 and a $5 copay for your medication. With this plan, the annual premium is $420, and the out-of-pocket cost for your medication is $60. This brings your total annual cost to $480, comparatively.

Changes to Medicare in 2026

At the federal level, there are some changes ahead for Medicare in 2026. For example, out-of-pocket expenses for drugs covered under Part D are capped at $2,100 per year.

Once the threshold is reached, beneficiaries will not pay any copayments or coinsurance for the remainder of the calendar year.

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All Medicare Part D plans must also cap monthly insulin copayments at $35.

Enhancements will also be made to the Medicare Prescription Payment Plan. The plan, which allows beneficiaries to spread their drug costs evenly throughout the year, will also offer automatic renewals to simplify the process.

Due to inflation, the maximum deductible for Part D plans will increase from $590 in 2025 to $615 in 2026.

Medicare's open enrollment period is more than just an opportunity to enroll in coverage. For new and existing beneficiaries, it's an opportunity to review coverage options and make any necessary changes, specifically when it comes to Part D.

If you're taking medications, shop for different Part D plans and don't forget to look beyond the plan's premium.

If you're concerned about enrolling in coverage, visit the State Health Insurance Assistance Program, or talk with your financial adviser.

Related Content

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• Medicare Open Enrollment 2026 Live Updates
• What You Must Know About the Different Parts of Medicare
• Medicare Open Enrollment: 10 Things to Know
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

And don't worry if you miss an answer; you can follow the links below the quiz to brush up on your knowledge.

More on Medicare, from the Kiplinger team:

• 11 Costly Medicare Mistakes You Should Avoid Making
• When Is Medicare Open Enrollment?
• Missed Medicare Open Enrollment? Here Are Your Options

Premium hikes for both medical and drug coverage, shrinking benefits on some private insurers' Medicare Advantage plans and a few rule changes mean it will be especially wise to research your choices to protect your health and save money.

Yet, nearly seven out of 10 Medicare beneficiaries don’t compare plan options, according to a study last year by health policy and research firm KFF. That can be an expensive error — even if you’re satisfied with your current coverage.

“Medicare Advantage and Part D plans often change from one year to the next, so people may see changes to their premiums, cost-sharing, coverage of their medications, and their health provider or pharmacy networks,” says Alex Cotrill, a senior policy analyst at KFF.

As always, during open enrollment this year you’ll be able to sign up for either government-run original Medicare or a Medicare Advantage (Part C) plan from a private insurer; switch from original Medicare to Medicare Advantage or vice versa; replace your Medicare Advantage plan with a different one; and choose or change a Part D prescription-drug plan.

Here’s a rundown of the key changes and tips to pick the best coverage for your needs.

New restrictions on Medicare coverage

Experts expect many Medicare Advantage plans to trim benefits, hike costs or both for 2026, due to the financial squeeze insurers are facing. In addition, some insurers — including UnitedHealthcare, the largest provider — will not offer all the plans they did in 2025.

“These companies are trying to find their way to profitability,” says David Lipschutz, co-director of the Center for Medicare Advocacy.

The biggest news for original Medicare is that some beneficiaries will now need to get prior authorization to receive certain treatments. This rule applies to residents in Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington and is limited to 17 medical needs, including pain management and help for urinary incontinence.

The basic choice between the two types of coverage, though, remains the same. Although original Medicare is usually more expensive than Advantage (due to the need to supplement coverage with a Part D prescription-drug plan and a medigap policy), it lets you go to any doctor or hospital that takes Medicare.

By contrast, Medicare Advantage plans typically have restrictive physician and hospital networks and require prior authorization to see a specialist. Many, however, offer benefits original Medicare doesn’t (such as dental, vision and hearing coverage) and typically include Part D coverage.

What to do: “In general, people may prefer original Medicare if they want the broadest access to doctors and hospitals,” says Cotrill. “They may prefer Medicare Advantage if they want extra benefits, reduced cost-sharing or the simplicity of one-stop shopping.”

If you opted for Medicare Advantage in 2025 and plan to renew, check the Annual Notice of Change sent out by your insurer to see whether your plan will be back and whether benefits and networks will stay the same.

Just because the plan was right for you in 2025 doesn’t mean it will be your best choice next year. Also keep in mind that if you switch from Medicare Advantage to original Medicare, you can be rejected when applying for a medigap plan in most states.

Higher Medicare premiums

“It’s possible premiums could go up pretty significantly,” says Stephanie Fajuri, health insurance counseling and advocacy program manager at the Center for Health Care Rights in Los Angeles.

The Part B monthly premium, $185 in 2025, is expected to jump by 12%, to $206.50, adding nearly $2,500 to your annual costs in 2026. Monthly premiums for Part D will be allowed to rise by up to $50 a month, compared with a limit on increases of $35 a month last year.

For higher-income beneficiaries, the Medicare Part B and D premium surcharge known as IRMAA (income-related monthly adjustment amount) will also rise next year. In 2026, the surcharge applies to anyone whose 2024 income was greater than about $107,000 ($214,000 for joint filers) and could add as much as $448 a month to Part B premiums and $91 monthly to Part D.

What to do: You can compare prices and coverage for Medicare Advantage and Part D plans in your area via Medicare.gov’s Plan Finder. If you get a notice saying you’ll owe the IRMAA next year, you can appeal it if you’ve had a life-changing event that has caused your income to drop since 2024, such as retirement.

Higher and lower drug costs

In 2025, Medicare instituted a $2,000 out-of-pocket annual cap, which will rise to $2,100 in 2026, on Part D prescription costs. But because the cap will limit insurers’ income, some plans are expected to charge more for certain prescriptions or cover fewer medications next year.

On the plus side, look for discounts of at least 38% to 79% off list prices on 10 popular prescriptions, in-cluding blood thinners Eliquis and Xarelto and diabetes medications Januvia, Jardiance and Farxiga, as the long-awaited Medicare Part D price-negotiation program begins next year. “Part D plans have the ability to negotiate for even lower prices,” says Leigh Purvis, AARP prescription-drug policy principal.

What to do: The Part D changes in price and coverage make it even more imperative to compare plans. In addition to Medicare’s Plan Finder tool, consider using HeyMOE (heymoe.com; $30 a year), a Part D review service from Medicare advisory firm 65 Incorporated.

For more general advice about the process, AARP has a free, interactive open-enrollment guide. Your State Health Insurance Assistance Program, or SHIP can also provide free, expert Medicare tips. Says Purvis, “SHIPs are the best way to get advice from an objective source.”

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

Related content

• Medicare Open Enrollment 2026 Live Updates
• What You Must Know About the Different Parts of Medicare
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You're doing what you've been told to do: Save as much as possible, ideally in your 401(k) so you can defer tax.

After all, shouldn't you save on taxes today while you're making a bunch of money, and pay it later in retirement while you're in a lower tax bracket? That's what you're told.

And don't forget, you often also get free money in the form of your employer's matching contribution.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Between consistent contributions and wise investing, the compounding growth of a 401(k) can produce a large nest egg for your retirement. It feels great to see that balance.

However, when it's time to start withdrawing money from your 401(k), the tax bills start and your sense of comfort dissipates.

Here's what you need to understand: When you're ready to retire, a 401(k) becomes the highest-taxed asset(s) you own, and the IRS can't wait to get its share. The same goes for other pre-tax accounts, such as a 403(b) or traditional IRA.

What many people don't realize is that when they take money out of their 401(k), they could be taxed multiple times for each distribution. Here are the main reasons why you shouldn't leave your nest egg there, or at least not the majority of it.

Income tax and RMDs

The money you withdraw from a traditional defined contribution plan, such as a 401(k), is taxed as ordinary income at the rate of your tax bracket in the year you take the distribution.

A traditional 401(k) is subject to required minimum distributions (RMDs), which begin at age 73 for most people. If you save a lot of money in your 401(k), your annual RMDs could significantly increase your income, push you into a higher tax bracket and punish you in taxes.

By the time you reach your 80s, RMDs can become so large that they are a real problem, causing a shocking amount of taxation and leading to higher premiums on your Medicare.

Don't assume, as many people do, that you'll be in a lower tax bracket in retirement than the one you were in during your top earnings years. That's a big lie people are told.

If you do a good job saving for your retirement, aren't you going to be able to retire at roughly the same standard of living you enjoyed when you were working?

A similar standard of living equals a similar income, which leads to similar tax rates. Also consider that tax rates are likely to increase by the time you retire.

Social Security

Your 401(k) distributions could also make more of your Social Security benefits taxable. A withdrawal from a pre-tax account raises your combined income, an equation the IRS uses to determine how much of your Social Security may be subject to tax.

Up to 85% of your Social Security benefits may be taxable if you're single and earn more than $34,000 or are married and earn more than $44,000.

Higher Medicare premiums

When 401(k) distributions are added to your taxable income, it increases your modified adjusted gross income (MAGI). If your MAGI exceeds certain income thresholds, you must pay an income-related monthly adjustment amount (IRMAA), which is an additional surcharge on your Medicare Part B and D premiums.

Impact on the surviving spouse

If you're married and taking distributions from your 401(k), the good news is you're getting hit with all these taxes while you're in the most favorable tax bracket of married filing jointly.

But what happens when one of you dies? Then the surviving spouse goes into the higher tax obligation, filing single. The net effect is that the surviving spouse often sees their taxes doubled or more. We like to call this the "spousal tax trap."

The Roth solution

Part of financial fulfillment in retirement often comes down to this decision: Do you want to pay tax on the seed or on the harvest? With a traditional 401(k), you're saving tax on the seed, but you're paying tax on the harvest. That is the exact opposite of what you should be doing.

The 401(k) is a great tax shelter when you are working, but it's the worst place to have your money in retirement.

What can you do about it? The most obvious answer is to speak with a tax planner well in advance of your projected retirement. They can help you put together some type of Roth conversion glide path while using your current tax bracket.

With a Roth conversion, you transfer retirement assets from a 401(k) or other pre-tax accounts into a Roth IRA. You must pay income tax on the money you convert in the year you convert, according to your tax bracket at the time, but the advantages when you retire are well worth it.

Withdrawals are tax-free as long as you are at least 59½ and have had the account for a minimum of five years. And unlike other types of retirement accounts, Roth IRAs are not subject to RMDs.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Also, if you don't need part or all the money, you can let your Roth IRA keep growing and leave it to your heirs or your spouse. Roth IRAs aren't just tax-free for you; they are also tax-free to your beneficiaries.

There are no IRS limits on the amount of money you can convert from a traditional IRA or other pre-tax retirement account into a Roth IRA, but spreading the conversion over several years can help reduce your tax burden in those conversion years.

Roth misconceptions

Of course, it's far better to start contributing to a Roth IRA, or Roth 401(k), earlier in your work life. But what sometimes happens, if you're a high earner in your 40s and doing a good job saving, is that everyone tells you to make pre-tax contributions to your 401(k).

So here you are, maxing out your 401(k) contributions, putting $25,000 a year into your 401(k) and getting that tax deduction for that amount. It feels like the "smart" move, because that's what everyone tells you to do.

But socking money away in your 401(k) may not actually be the most efficient tax move. You may even want to consider doing the opposite by changing those contributions to Roth. You won't get the tax deduction up front, but you will certainly appreciate tax-free money as you approach retirement.

When it comes to Roth conversions, people often have two misconceptions that make them hesitant to do them.

One is that they mistakenly think they have to pay the tax on the conversion in one lump sum by writing a check to the IRS or withdrawing from their savings or investment account.

However, provided that you are over the age of 59½, you can simply do it by having the tax withheld by whatever financial firm holds your retirement account.

The second misconception: If you do a Roth conversion, you must wait five years before you touch that money. The truth is that you have to wait five years to touch the earnings on that money.

When you're over 59½, just withhold the tax and you can take distributions on the principal from day one.

Take action to avoid 401(k) tax bombs

Beware of building your traditional 401(k) during your working years while ignoring the tax repercussions you'll face in retirement.

Take action now by changing your 401(k) contributions to Roth and strongly consider converting any IRAs you have to a Roth.

Don't wait until you're near retirement. Give yourself a true sense of future financial security and remember: It's far better to pay tax on the seed rather than the harvest.

Dan Dunkin contributed to this article.

Centennial Advisors, LLC is an Investment Adviser registered with the U.S. Securities and Exchange Commission ("SEC"). Registration as an investment adviser does not imply a certain level of skill or training.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

Related Content

• Your 401(k) Options Just Got More Complicated: Here's What You Need to Know
• The 401(k) Mistake That Could Cost You Millions in Retirement Savings
• Five Things to Consider Before Rolling Your 401(k) into a Roth IRA
• Roth 401(k) vs. 401(k): Which Is Right for You?
• 5 Ways Your 401(k) Is a Tax Trap (and What to Do About It)

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

If you lose your job coverage, move out of your plan's area or have another major life change, you get a Special Enrollment Period (SEP) — a brief window to change your plan. The rules we covered are your key to knowing when and how to make that penalty-free change.

Finally, remember that if you are currently in a Medicare Advantage plan (MA), the Medicare Advantage Open Enrollment Period (MAOEP) runs from January 1 through March 31. If your MA plan isn't working out, you have that one last chance to switch. Keep this guide handy; it's your essential Medicare roadmap until next fall!

Missed Medicare Open Enrollment? Here Are Your Options
Medicare and Moving: What You Need to Know
Medicare Advantage Open Enrollment Begins on January 1

Review Changes to Your Coverage to Get Ready for Medicare Open Enrollment

One week from today, on October 15, Medicare Open Enrollment will begin. The annual enrollment period runs until December 7. It’s an important opportunity for all Medicare beneficiaries to review their current coverage and make any changes to plan selections. The first step is to review your Annual Notice of Change (ANOC). Whether you are enrolled in a Medicare Advantage plan or Part D prescription drug plan, you should have received this information by September 30. If you haven’t received your copy, call your plan or check their website.

The notice provides a detailed summary of all the changes to the plan's benefits, costs, and coverage for the upcoming calendar year. Without reading the ANOC, you could be surprised on January 1 by higher costs, a medication no longer being covered, or that your doctor or preferred facility is no longer in your network.

Whether you decide to stay with your current plan or to explore other Medicare coverage options, you want to make a choice based on the facts. If you have any questions about the upcoming changes, contact your plan’s customer service department. They can help you understand the details of the changes to your coverage.

-Donna LeValley

Don't Toss It! Why Your Medicare Annual Notice of Change Matters

Download the 2026 Edition of Medicare and You

The 2026 edition of the Medicare guide, Medicare and You, is out and available for download. And, it’s a resource I highly recommend. It has an easy to use index located in the front and the online version has hyperlinks to definitions of Medicare terms. Outbound links will lead you to more information on a topic or help you complete a task, such as how to update the address on your Medicare bill.

The guide provides clear side-by-side comparisons of original Medicare and Medicare Advantage plans that you can use to decide which plan is best suited to your needs. You can learn more about your rights under Medicare and how to file an appeal. The last section is devoted to resources, showing you where to get more personalized help and all the different ways you can contact Medicare.

After you’re done downloading the guide, stop by our site to take our quiz: Do You Know What Medicare Gives You for Free?, to test your knowledge of the services that Medicare provides at no cost to you.

-Donna LeValley

Major Insurers Scale Back Medicare Advantage and Part D Plans for 2026

There is bad news for beneficiaries enrolled in certain Medicare Advantage and stand-alone Part D prescription drug plans. Three major insurers are significantly cutting their Medicare Advantage offerings for 2026, reducing both the number of plans and the areas they cover. Participants in these plans will need to select new coverage for 2026.

If you are enrolled in a Medicare Advantage plan or Part D drug plan through UnitedHealthcare, Humana, or Aetna (CVS Health) and want to know if your plan is being eliminated, read your Annual Notice of Change (ANOC).

There are resources available to help if you are among the MA plan participants who will need to find a new plan for 2026. You can use the Medicare.gov website that has a plan compare feature or contact your local SHIP (State Health Insurance Assistance Program) office for unbiased advice.

-Donna LeValley

Medicare 101: The Four Parts of Medicare and What They Cover

Understanding the different parts of Medicare is crucial because it directly impacts your health care coverage, costs, and choices. You can use this knowledge to select the combination of coverage that best fits your health needs, budget and preferred network of doctors and hospitals.

It's important to understand what benefits you will receive so you can decide if you need Part D prescription drug coverage, additional coverage through Medigap or a Medicare Advantage plan.

And, if you have a Medicare Advantage Plan, although your plan may have different rules than original Medicare, your plan must give you at least the same coverage as original Medicare.

In short, knowing how the different parts work empowers you to make informed decisions about your healthcare, ensures you have the coverage you need and enables you to manage your medical expenses effectively. So, here’s a quick guide to the different benefits provided through each part.

-Donna LeValley

What You Must Know About the Different Parts of Medicare

Traveling with Medicare in 2026?

When you are reviewing your current coverage, think about where you plan to go in 2026 and if you want to look for a Medicare Advantage or Medigap plan with a travel benefit. After all, when an emergency happens, you can't put off medical care until you get home. You have to be treated where you are and sort out the expenses after the emergency subsides. But that doesn't mean you can't plan. Understanding what your Medicare insurance does and doesn't cover when you are away from home is the first step.

Ultimately, whether or not you can expect assistance from Medicare when you travel boils down to what type of Medicare policy you have and whether you are traveling domestically or internationally. Some Medicare Advantage plans include travel benefits for when you need care away from home, and several Medigap plans offer some coverage for foreign travel emergencies. Fortunately, beneficiaries of both original Medicare and Medicare Advantage plans have options to pick up some travel coverage.

-Donna LeValley

What Medicare Covers When You Travel in the US and Abroad

Medicare Doesn’t Cover That?!?!

Medicare Part A and Part B, otherwise known as original Medicare, cover much of your health care costs in retirement, but not all of them. With Part A, you’ll get most of your inpatient hospital stays, skilled nursing facility stays, surgery, hospice care and even some home health care covered. Part B helps pay for doctors' visits, outpatient care, some preventive services, and some medical equipment and supplies.

Everything else — prescription drugs, annual exams, and a host of other things — will require additional coverage. To fill the gaps, retirees typically get extra coverage through a Medigap plan or a Medicare Advantage plan, which costs extra.

Wondering if you need that extra coverage? Check out what’s covered in original Medicare and what isn’t with our comprehensive guide.

-Donna Fuscaldo

How to Fight Rising Health Care Costs

The cost of health care is on the rise, with or without a deal in Congress, and that applies both to Medicare and out-of-pocket costs. Fidelity Investments’ 24th annual Retiree Health Care Cost Estimate pegs the cost at $174,500. That’s how much an individual aged 65, with Medicare, will spend in his or her lifetime on out-of-pocket health care expenses. That’s up 4% from $165,000 in 2024. Back in 2002, the first year Fidelity put out an annual estimate, it was a mere $80,000.

But that doesn’t mean you have to take it lying down. There are actions you can take to keep those expenses at bay. It all starts with thinking about the type of health care you want. Once you’ve figured that out, you can plan accordingly. Focusing on health and saving for long-term care helps too.

-Donna Fuscaldo

Five Smart Moves for Retirement Healthcare: From HSAs to Medigap Policies

Changes Coming to Medicare in 2026

It's never too early to start planning, and with the New Year just a mere ten weeks away, now is a good time to get a handle on changes coming to Medicare in 2026. And guess what, there are a lot of them. How many? Seven, according to our recent count.

They run the gamut from the big to the small and cover everything from your prescription drugs to how much you pay in premiums. For example, new in 2026, if you are on a Medicare Prescription Payment Plan (MPPP), you will be automatically enrolled each year thereafter. Or if you have a Medicare Part D plan, expect the deductible to increase. Knowledge is power, especially when Fidelity Investments estimates a person will spend $174,500 in out-of-pocket health care costs in retirement!

-Donna Fuscaldo

Prior Authorization Coming to Traditional Medicare Starting in 2026

Medicare Open Enrollment Is Here!

Medicare open enrollment begins this week, officially on October 15 and lasts through December 7. This is the period in which people with Medicare can change their health and prescription drug coverage.

Getting a handle on the basics of Medicare is crucial for protecting both your health and your retirement savings. Because of this, the choices you make during Medicare Open Enrollment are arguably some of the most important financial decisions of your life. That is why it's essential to know some key details about Medicare, including the open enrollment dates and the types of plans available to you.

There are ten key facts about Medicare that you should be well-versed in before selecting a new plan or sticking with your existing one. We lay them all out here.

-Donna Fuscaldo

18 Things Medicare Gives You for Free

Medicare Coverage Of Telehealth Out Amid Government Shutdown

Medicare patients across the country are getting their telemedicine appointments canceled or rescheduled amid the federal government shutdown.

Among the casualties of the government’s inability to extend the budget beyond September 30th was a provision that allowed Medicare to cover the cost of telehealth services for the millions of Americans over the age of 65 or those with disabilities. As a result, doctors have been forced to cancel or postpone virtual visits, according to the Center for Medicare Advocacy.

This is leaving some beneficiaries without services and is particularly troublesome for people in rural areas who lack transportation or cannot visit a doctor in person because of their health.

While Medicare has offered telehealth coverage for years, it was limited until the pandemic. Now millions of Americans have come to rely on it for their health care needs. All of which is in limbo amid the government shutdown.

-Donna Fuscaldo

Medicare Basics: 12 Things You Need to Know

How to Find the Best Plan in 2026

Searching for the right Medicare plan can feel overwhelming, but there are several excellent resources available to provide the free, unbiased help you need to make an informed decision. The most powerful digital tool at your disposal is the official Medicare Plan Finder at Medicare.gov/plan-compare. This online tool allows you to input your specific prescription drugs, dosages, and preferred pharmacies. The tool generates a personalized list of all available Medicare Advantage (Part C) and Part D Prescription Drug plans in your area, showing your estimated total yearly out-of-pocket costs (premiums, deductibles, and co-pays) for each plan. It's the essential first step to compare plans based on your unique health and financial needs.

For those who prefer one-on-one assistance or need deeper clarification, the most trusted resource is the State Health Insurance Assistance Program (SHIP). This is a national program, funded by the federal government, that offers free, confidential, and unbiased counseling to Medicare beneficiaries, their families, and caregivers. SHIP counselors are not insurance brokers, meaning they don't sell plans and aren't tied to any insurance company; their sole mission is to help you understand your coverage options, compare plans, and explore financial assistance programs like "Extra Help." You can find your local SHIP office and contact information by visiting shiphelp.org or by calling the national SHIP line at 1-877-839-2675.

Finally, you can always turn to 1-800-MEDICARE (1-800-633-4227), which operates 24 hours a day, 7 days a week (except some federal holidays). The representatives there can answer general questions about Medicare, walk you through the Plan Finder tool, and help you enroll in a plan. It's a great source for quick answers or assistance with the enrollment process itself.

-Donna LeValley

Medicare Open Enrollment: 10 Things to Know

How to Coordinate Medicare and Employer Health Insurance

Turning 65 marks a significant milestone in health coverage, but for many still working, it also introduces a major decision: Should you enroll in Medicare right away, or keep your employer-sponsored health plan? This choice is far more complex than a simple either/or, as it involves navigating coordination of benefits, avoiding costly late enrollment penalties, and understanding the financial impact on tools like Health Savings Accounts (HSAs). Making the wrong decision could lead to unnecessary premium costs, gaps in coverage or steep and permanent penalties for delaying your enrollment in Medicare Part B or Part D.

We break down the essential rules for those with employer-provided health care coverage at age 65. We explain the critical "20-employee rule" that determines whether your employer plan or Medicare pays first and when you can safely delay Part B enrollment using a Special Enrollment Period (SEP). Understanding these guidelines is crucial for ensuring you maximize your current benefits and avoid costly mistakes when you eventually retire.

-Donna LeValley

Can You Sign Up for Medicare While Still on an Employer Health Plan?

Answers to Frequently Asked Medicare Questions

The government categorizes Medicare as a mandatory program, which is funded by existing laws; therefore, it does not require an annual vote by Congress to continue operating. The upshot is that, under CMS, you will continue to receive Medicare benefits even during a shutdown. And that is why annual Medicare open enrollment is proceeding uninterrupted by the mandatory furloughs. But the combination of increased call volume during open enrollment and reduced staff can make it harder to get answers to pressing questions. That’s where we can help.

We’ve put together answers to 12 of the most frequently asked questions about Medicare, including when to sign up for benefits, why you might need Medigap insurance, how to manage costs, and how to appeal a Medicare denial. Hopefully, this list will provide you with the information you need without having to wait on hold.

-Donna LeValley

12 FAQs About Medicare: Your Medicare Questions Answered

Getting Closer to Learning the 2026 Medicare Premiums and Deductibles

The annual Medicare open enrollment period is underway, and I always thought it was a bit odd that it started before the new premiums and deductibles had been announced. Last year, the new numbers weren’t released until November. This year, the federal government shut down before the Bureau of Labor Statistics could release the September CPI report. Why does that matter? It’s an essential piece of information that the Social Security Administration (SSA) uses to calculate the 2026 COLA. The good news is that the September CPI, originally due for release on October 15, will now be released on October 24 at 8:30 am ET, the BLS announced. The COLA is expected to follow on the same day.

And, the COLA announcement always comes before the announcement of new Medicare premiums and deductibles.

Medicare Part B premiums are deducted directly from Social Security checks. Because of this, the Social Security Administration has a “hold harmless” provision that protects your Social Security benefit payment from decreasing due to an increase in your Medicare Part B premium. Medicare Part B premiums are projected to increase by $21.50 to $206.50 in 2026, a rise of 11.6% over the current 2025 premium of $185.00. The Social Security COLA is projected to rise between 2.7% and 2.8%, with a large part of that increase going to cover the Part B premium increase. Brass tax: The hold harmless provision is effectively a cap on the Medicare Part B increases.

The hold harmless provision does NOT protect you if:

• You are new to Medicare in 2026. Hold harmless does not apply to you because you have not been enrolled in Medicare Part B long enough to qualify.
• You are subject to IRMAA.
• You are enrolled in a Medicare Savings Program (MSP). However, the MSP should continue paying for your full Part B premium.
• You were enrolled in a Medicare Savings Program in 2025 but lost the program because your income increased or you failed to recertify.

-Donna LeValley

2026 Social Security COLA Announcement Is Back on Track Despite Government Shutdown

One More Thing To Worry About During Open Enrollment: The Medigap Trap!

When it comes to navigating Medicare and Medicare Advantage, a bit of foresight can go a long way in avoiding the Medigap trap. The trap occurs when you enroll in a Medicare Advantage plan, intending to switch later to original Medicare with a supplemental Medigap plan, only to find you no longer have a guaranteed right to buy a Medigap policy. If you are approved for coverage, you may face higher premiums.

That’s because in most states, Medigap plans are automatically available only in the first six months after an enrollee becomes eligible for Medicare. After that, health screening may be required and the plans can refuse coverage or charge higher rates for those with health issues.

To prevent that from happening, consider your health and your family’s health history before selecting your plan. If you do select a Medicare Advantage plan, you can switch to original Medicare during the annual open enrollment period, which runs from October 15 to December 7.

-Donna Fuscaldo

What’s the Best Medigap Plan?

Think You Know Medicare Open Enrollment? Take Our Quiz

Timing is everything, and that is true of Medicare Open Enrollment. Missing a deadline can result in late enrollment penalties that last a lifetime or, at the very least, delays in coverage.

But don’t worry, we've got you covered. Take our quiz on Medicare enrollment deadlines, and if you get any answers wrong, brush up on the correct information we provide, and take it again!

Once you’re done, you’ll know off the top of your head the purpose of the Annual Enrollment Period (AEP), how long the enrollment period runs, and much more! You won’t ever have to worry about making any Medicare Open Enrollment mistakes.

-Donna Fuscaldo

Medicare and Moving: What You Need to Know

Steer Clear of Scams During Medicare Open Enrollment

Applying for and managing your Medicare benefits can be stressful, and scammers can take advantage of that vulnerability. They use times like Medicare Open Enrollment to prey on people’s emotions, and attempt to trick them into revealing important personal and financial information for identity theft. That’s why safeguarding your information during this period is crucial.

Some scammers claim they need information, such as your Medicare number, bank account, or credit card information, to send a “new” Medicare card or process a medical equipment claim, according to the Federal Trade Commission. Here is some information that will help you avoid those, or any other scam during Open Enrollment.

A representative from Medicare will never unexpectedly call, email, text, or message you on social media. No one from Medicare would ever contact you to ask for your Medicare, Social Security, or bank account numbers. A Medicare representative would never try to sell you anything or tell you that you need to pay for your Medicare card. And don’t be fooled by caller ID. If you are worried by what a caller says and want to double check something, hang up and call 1-800-MEDICARE (1-800-633-4227) to confirm everything is okay.

If you think someone tried to scam you, you can report the situation directly to Medicare through the 1-800 number or the Senior Medicare Patrol (SNP). The SNP can help you find state level resources to help you.

-Donna LeValley

Retirement in the Age of Cyber Scams: How to Protect Your Next Chapter

Appealing Your IRMAA

The IRMAA can sneak up on you if you aren't careful. It only takes earning $1 above the threshold to trigger the surcharge. In 2025, that $1 of income would cost you an additional $1,052.40 annually in Medicare surcharges, consisting of $888 for Part B and $164.40 for Part D. That's just the first tier; there are four more.

How do you know if you’re liable? If you’re subject to the surcharge, you will receive a notice from the Social Security Administration known as an initial determination. The good news is that you can appeal this determination if your circumstances have changed. After all, a lot can happen in two years, and if you can demonstrate to Social Security that a “life-changing event” has affected your income, it will reduce or waive your premium surcharges. The Social Security Administration considers the following to be life-changing events: marriage, divorce, the death of a spouse, loss of income, and an employer settlement payment.

-Donna LeValley

How to Appeal the IRMAA for Medicare Parts B an

Use Your HSA to Reimburse Yourself for Medicare Premiums and Expenses

The cost of health care expenses has been going up year after year and shows no signs of slowing down. Health care costs have increased by 188% from 2005 to 2025, according to the Millman Medical Index. An HSA can help you pay for those expenses in retirement.

While it's true that you can’t make new contributions to a health savings account once you enroll in Medicare, you can withdraw the money tax-free from the account to pay Medicare premiums, copayments and deductibles. However, you can contribute to your spouse’s HSA if you are enrolled in Medicare and no longer HSA-eligible.

So, if you’ve had an HSA for several years and didn’t realize you could withdraw money tax-free for Medicare premiums, you could reimburse yourself for all those premiums at any time. You just need to show receipts that you paid for eligible expenses. One caveat — you can’t withdraw money for expenses you incurred before you opened up the HSA.

-Donna LeValley

10 Things You Need to Know About Health Savings Accounts

We’ll Be Back for the Final Week of Open Enrollment

Whether you want to switch from original Medicare to an Advantage plan, from an Advantage plan back to original Medicare or simply find a cheaper Part D prescription plan, the Medicare Open Enrollment period is an annual opportunity you can't afford to miss. By taking the time now to review your coverage — especially checking if your prescriptions or doctors are still covered next year — you can potentially save hundreds or even thousands of dollars

So, do the research, compare your current plan with new offerings, and secure your choice by the December 7th deadline. We're signing off for now, but we’ll be back here on December 3 for the final week of Open Enrollment to share last-minute tips, answer common questions, and help you cross the finish line with confidence. Until then, use the tools and links provided to get started on your crucial Medicare checkup!

-Donna LeValley

Time is Running Out! Your Last Chance to Make Medicare Changes is Ending Soon

The clock is ticking! Medicare Open Enrollment ends on December 7th. If you've been putting off reviewing your Medicare coverage for the upcoming year, now is the time to act. Don't risk starting the new year with a plan that doesn't fit your health or budget needs.

The changes you make during this period — from switching between original Medicare and Medicare Advantage, to enrolling in or changing a Part D prescription drug plan — will take effect on January 1, 2026. After the deadline, your options to change coverage are very limited.

Here is a three-step plan to help you make the most of these final few days.

Last-minute action plan: 1. Check your current plan's changes (The ANOC)

Every year, the costs, benefits and coverage of Medicare plans can change. Your plan should have sent you an Annual Notice of Change (ANOC). If you haven't reviewed it, do so now!

Pay attention to these vital aspects of your plan:

• Premiums and deductibles: Are your monthly costs and upfront deductibles increasing for 2026?
• Drug formulary: Has your plan removed any of your essential prescriptions from its list of covered drugs (the formulary), or moved them to a higher cost-sharing tier?
• Provider network: Are your preferred doctors, specialists, or hospitals still "in-network" for next year?

2. Review your personal health needs

Your health and financial situation may have changed in the last year. Does your current plan still make sense?

• New medications or conditions: Have you started taking new, expensive medications? Do you have a new chronic condition that requires seeing specialists more often? Your drug and provider network needs should be your top priority.
• Budget check: Do you anticipate incurring more medical expenses next year? Compare the total estimated out-of-pocket costs (premiums, deductibles, copays) of your current plan versus a new option. Sometimes, a plan with a slightly higher premium offers much lower out-of-pocket costs for the services you use most.

3. Use the official Medicare Plan Finder tool

The most efficient way to compare options in your area is the official Medicare Plan Finder tool at Medicare.gov. This tool allows you to plug in your current prescription medications, preferred pharmacies, and anticipated health care services to see which plans offer the best value for your specific needs.

-Donna LeValley

Related article:

What You Will Pay for Medicare in 2026

Get Free, Unbiased Help Navigating the Final Days of Medicare Open Enrollment

You'll encounter many people offering Medicare advice during this time — from insurance agents to plan representatives. While these individuals can provide valuable information about their specific plans, their primary role is often to sell or promote those plans. This isn't inherently bad, but it means their advice might not cover the full spectrum of all available options or objectively compare them against each other. Where can you get help? I recommend contacting your local SHIP (State Health Insurance Assistance Program.)

The State Health Insurance Assistance Program (SHIP) is a national program funded by the federal government, specifically designed to provide free, unbiased Medicare counseling to beneficiaries and their families. SHIP counselors are trained volunteers and staff, often seniors themselves, who are deeply knowledgeable about Medicare. They do not sell insurance, and their services are completely confidential.

What can SHIP do for you?

• Explain Medicare basics: What's the difference between original Medicare and Medicare Advantage? How do Parts A, B, C, and D work?
• Compare plans: Help you understand and compare Medicare Advantage plans, Medicare Part D prescription drug plans, and Medigap (Medicare Supplement) policies.
• Review your current plan: Help you understand your Annual Notice of Change (ANOC) and evaluate if your current plan is still the best fit for 2026.
• Analyze prescription drug costs: Input your specific medications into the Medicare Plan Finder to find the most cost-effective Part D plan.

How to find your local SHIP: The easiest way to connect with your local SHIP office is through their national website: www.shiphelp.org. Just enter your zip code or select your state, and you'll get their contact information. You can also call 1-877-839-2675 to get connected to your local SHIP.

Call Medicare directly: The official Medicare helpline, 1-800-MEDICARE (1-800-633-4227), is available 24 hours a day, 7 days a week. While they can't recommend specific plans, they can provide general Medicare information and help you navigate the official Medicare Plan Finder tool.

-Donna LeValley

Prior Authorization Coming to Traditional Medicare Starting in 2026

Medicare to Cover Obesity Drugs in 2026 for as Little as $50. What You Need to Know

Medicare to Cover Obesity Drugs in 2026 for as Little as $50. What You Need to Know

Medicare beneficiaries who are struggling to manage their weight will have access to popular weight loss drugs through Medicare Part D drug plans next year. Wegovy, Mounjaro and Zepbound will be covered by Medicare.

Initially, the Trump administration decided not to cover GLP-1 weight loss medications prescribed only to treat weight loss in 2026. Cost was a big factor. Medicare currently covers drugs that are used for weight loss, like Mounjaro and Ozempic, but only when they are prescribed by doctors for other reasons, like managing diabetes.

After negotiations with many major drug companies, a deal was made to both lower the costs of GLP-1 medications and enable Medicare coverage of the weight-loss drugs beginning in 2026. Medicare will pay $245 per month, down from list prices ranging from $1,000 to $1,350. Beneficiaries will pay a maximum of a $50 copay. Ozempic, Wegovy, Mounjaro and Zepbound will be covered by Medicare.

- Donna Levalley

9 Medicare Changes Coming in 2026

A 5-Question Quiz to Help You Choose Between Original Medicare and Medicare Advantage

Are you a globetrotter who demands the freedom to see any doctor, anywhere? Or do you prefer the convenience of an all-in-one plan that includes dental, vision and a gym membership? Your retirement lifestyle and priorities — not just your health — should determine your Medicare choice.

The difference between original Medicare and Medicare Advantage impacts everything from your ability to travel without worrying about networks to the size of your monthly health care budget.

This quiz is designed to highlight your preferences for cost, flexibility and coverage, which are the main factors in choosing between original Medicare (Part A and B, plus a Medigap/Part D) and a Medicare Advantage (Part C) Plan. Answer five simple questions about your preferences for network flexibility, premium cost, and extra benefits to reveal the Medicare path that truly fits your retirement life.

-Donna LeValley

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12 FAQs About Medicare: Your Medicare Questions Answered

Medicare Open Enrollment ends this Sunday, December 7. If you are still deliberating, you still have a few days to choose a new Medicare Advantage or Part D drug plan, switch to a Medicare Advantage plan, or switch back to original Medicare. We have assembled some Medicare FAQs to help you make better choices during open enrollment.

What happens if you do nothing? Your coverage won’t be disrupted; your current selections will simply be renewed for 2026.

Original Medicare (Parts A and B): If you have original Medicare, you don't need to do anything to keep your coverage; it continues as long as you pay your Part B premiums (and Part A, if you have to pay a premium).

Medicare Advantage (Part C) or Part D Drug Plan: If you are enrolled in one of these private plans, it will usually automatically renew for the next year, assuming the plan is still being offered in your area.

If you're happy with the coverage you have now, and the plan is still being offered next year, you're all set. If you choose a new option for 2026, your new coverage will start on January 1.

-Donna LeValley

Medicare Premiums 2026: IRMAA Brackets and Surcharges for Parts B and D

Missed Medicare Open Enrollment? Here Are Your Options

If you missed Medicare open enrollment, you may still be able to change your Medicare selections, depending on your current coverage and why you fumbled the deadline. Your ability to make any changes after the December 7 deadline depends on whether you currently have original Medicare or Medicare Advantage and if there are extenuating circumstances that caused you to miss the cutoff.

Don't worry about seeing a doctor or filling a prescription — your Medicare coverage will continue uninterrupted despite missing the deadline. Your current insurance elections will be renewed automatically, and there will be no gaps in your coverage.

There are only limited opportunities for original Medicare beneficiaries to make coverage changes after that period ends. It will typically depend on circumstances and whether you qualify for the Special Enrollment Period (SEP). Medicare Advantage beneficiaries who want to make changes are in a better position and have a second chance to review and alter their selections in 2026.

If you qualify for the SEP, you can only change your Part D coverage. You are not able to switch from original Medicare to a Medicare Advantage plan during a SEP. The Medicare site offers a Q&A on how to qualify for the special enrollment period and gives more details about qualifying circumstances.

-Donna LeValley

What Medicare Covers When You Travel in the US and Abroad

Medicare Advantage Participants Get Another Go at Open Enrollment on January 1

If you're already an Advantage enrollee, there are two times a year — spring and fall — when you can switch from one plan to another or return to original Medicare. Spring enrollment starts January 1 and runs until March 31, while fall enrollment runs concurrently with Medicare's open enrollment period, from October 15 to December 7.

The best plan will depend on each individual's needs. Recently, a number of the large insurers that offer Advantage plans have reduced the number of Medicare Advantage and Part D plans they offer and have curtailed services in some markets.

To help you explore options, you can find more information on Medicare Plan Finder, which was designed to help you search for Medicare Advantage and Medicare Part D plans within your zip code. The finder also rates available plans in your area using a star system, where five stars are the highest rating. For 2026, there are 18 plans with five-star ratings.

-Donna LeValley

Major Insurers Scale Back Medicare Advantage and Part D Plans for 2026

"The combination of (Centers for Medicare and Medicaid Services) funding cuts, rising healthcare costs, and increased utilization have created headwinds that no organization can ignore," said Bobby Hunter, who is the CEO of Government Programs at UnitedHealthcare.

Insurers feel cost pressures

One of the reasons insurers are dropping Medicare Advantage (MA) plans is reduced government funding. It is estimated that by 2026, government reimbursement will have fallen 20% from 2023 levels, Hunter said. This longer-term cut is masked by the projected 2026 average reimbursement rate increase of 5.06%, which is higher than the initial 2.23% increase proposed by the Biden administration back in January 2025.

When commenting on the patient impact of eliminating plans, Hunter said, "The exits will likely steer patients toward health maintenance organizations, or plans which require more frequent referrals and limit patients to a network of providers."

Here is a summary of the planned reductions and key changes for 2026 as reported by Reuters:

• UnitedHealthcare (UHC): The nation's largest MA provider is making "strategic adjustments" and will stop offering Medicare Advantage plans in 109 U.S. counties in 2026, impacting 180,000.
• Humana: The second-largest MA insurer is also significantly retrenching, cutting plans in hundreds of counties and in a few states to stabilize its financial margins. Humana plans will be available in 85% of U.S. counties next year, down from 89% in 2025, and in 46 states, down from 48 in 2025.
• Aetna (CVS Health): CVS Health's Aetna insurance business will operate prescription drug plans in 100 fewer U.S. counties next year than it did in 2025. It will provide plans in 43 states and Washington, D.C., and 2,159 counties for 2026, down from 44 states and 2,259 counties in 2025.

What's happening to your plan?

If you are 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 will take effect in January 2026.

If you haven't received a copy of your ANOC, there are a few ways to get one. You can call them directly or check their website.

How to find a new plan

There are resources to help if you are among the MA plan participants who will need to find a new plan for 2026. The Medicare.gov website also has a plan compare feature, Abraham said, adding it allows people to compare “apples to apples,” their current plans to the other options available for 2026.

You can also contact your local SHIP (State Health Insurance Assistance Program) office. It provides unbiased help to Medicare beneficiaries, their families, and caregivers. The office can help you navigate your questions about original Medicare, Medicare Advantage plans, and Medigap insurance.

Related Content

• Don't Toss It! Why Your Medicare Annual Notice of Change Matters
• Prior Authorization Coming to Traditional Medicare Starting in 2026
• Seven Medicare Changes Coming in 2026
• Medicare Premiums 2026: Projected IRMAA Brackets and Surcharges for Parts B and D
• Medicare Premiums Projected to Jump in 2026

That’s because whenever the financial planner’s clients reach that magic age of Medicare eligibility, they have some serious financial decisions to make about getting supplemental coverage — and don’t know where to turn.

The alphabet soup of plan options, the complexity of what’s covered and what’s not, the challenge of figuring out what Future You is going to need: It’s overwhelming and confusing.

So Haas set out to learn “anything and everything” about Medigap plans, to help steer his friends and clients in the right direction (with no personal financial interest). But this year, that information came in handy for him.

Haas hit 65 this year. He had to make his own Medigap selection, one that will have ramifications for years.

“Think of it as a permanent decision,” says Haas. “You need to think about yourself in the future, not just in the present, which people have trouble doing. This choice is extremely important.”

A high-stakes choice

There are a number of reasons why this Medigap choice looms so large, with fallout that can reverberate for years.

Getting care through traditional or original Medicare can be expensive, which is why most beneficiaries who choose it over a private Medicare Advantage plan opt for an added private policy, known as Medicare Supplement Insurance or, more colloquially, Medigap.

So who needs Medigap plans? Anyone with traditional Medicare who wants help with out-of-pocket costs like coinsurance and co-pays — especially since those costs aren’t picked up by Medicare, and there is no cap on them. (Some Medigap plans also cover deductibles, but those are not available for Part B deductibles for those who become eligible for Medicare after Jan. 1, 2020). You can’t get a Medigap plan if you have a Medicare Advantage plan.

As such, Medigap is a good fit for frequent users of healthcare services. This holds true for your needs as you age because you may be locked in to your initial selections even as your health declines. Basically you are choosing predictability in costs, by paying a premium up-front, rather than risking that a serious illness or extended hospital stay could severely damage your finances.

Medigap makes sense for frequent travelers, since some Medigap plans cover emergency medical expenses while abroad.

But there are so many different options at so many different prices and offered by so many different providers that retirees often feel confused and frozen.

So they put it off until later, or make the wrong choice. Either way, it’s something that can affect them for the rest of their lives.

“It is 100 percent overwhelming,” says Kevin Moss, senior editor at the nonprofit Consumers’ Checkbook. “It’s such a consequential decision: It forces you to think about what you need right now, what you will need in five or 10 years, and what you will need all the way to the end of your life.”

And this is a choice being puzzled over by millions. In 2023 Medigap plans covered 13.6 million people, who paid $35.5 billion in premiums, according to the National Association of Insurance Commissioners.

Medigap vs Medicare Advantage

There are essentially two major paths you can take when you are choosing supplemental Medicare coverage.

One is Medigap, and the good news is that most people like it. In one 2023 study, 93% of beneficiaries said they were happy with their choice, with 80% saying they were either “very” or “extremely” satisfied. The other is Medicare Advantage — not quite as beloved, with 73% saying they are satisfied with their current plan, according to an AARP survey.

The Medicare Advantage plans are the ones you might be familiar with from all those incessant TV commercials. This is the private insurance alternative to traditional Medicare that typically charges modest (or even no additional) premiums and typically includes prescription drug coverage. It also often has extras, like coverage of vision and dental. But it limits you to a network of providers, and makes you jump through hoops by requiring prior authorizations for more expensive services. This can lead to delays or even denials of some coverage.

Others go with traditional government-run Medicare, which doesn’t have such limits on providers and has fewer requirements for prior authorizations. However, out-of-pocket costs can be much higher, so many traditional Medicare beneficiaries add a Medigap plan, which you can think of as a wrapper around the traditional Medicare plan.

For that, you pay additional premiums (an average of $217 a month in 2023, more than the standard 2025 $185 monthly Part B premium). (Keep in mind traditional Medicare does not cover prescription drugs, for which you will need a standalone Part D policy at an added cost.)

Pairing Medigap with traditional Medicare means you get help with out-of-pocket costs and can see any of the 98% of non-pediatric doctors who accept Medicare. In 2022 12.5 million people, or 42% of those in traditional Medicare, had a Medigap policy as well, according to KFF (formerly the Kaiser Family Foundation).

“With Medigap you can start right away when you’re 65 with no underwriting, which is so important to people with underlying conditions,” says Sally Greenberg, CEO of the National Consumers League. “Basically you can go to whatever doctor you want, and can sign up for any Medigap plan you choose. That’s pretty good.”

Alphabet soup

If you choose the Medigap path, that’s only the first step. Then you have additional choices to make. There are 10 standardized levels of plans: A, B, C, D, F, G, K, L, M, N. These are administered at the state level, so the policies you are offered depend on your particular location; insurers might offer some, but not all.

That’s a lot of letters, so to help narrow those down: Almost all Medigap enrollees are in Plans F or G, which are the most comprehensive options. Each of those plans amounts to 41% of Medigap policyholders — although F is no longer available to new signups. Plan N (and its lower premiums) is the third most popular at 11%.

Another thing to know: Even though plan types are standardized in terms of what they cover, premiums are not set at the same rate; different insurers charge different premiums for the same plan, which is why shopping around is critical. They also may raise rates differently; One analysis last year found, for example, that larger insurers implemented larger increases.

There are a few more major tripwires ahead, and you have to pick your way through this minefield very carefully.

To understand the point, consider a common scenario: A new retiree chooses to go with a Medicare Advantage plan with its lower premiums and extra offerings. After all, younger retirees may not have the serious health problems that would benefit from better access to specialists and less red tape from prior authorizations.

But as they age, they can find themselves locked into their Medicare Advantage plan, because traditional Medicare carries too many additional costs. Mitigating the costs with a Medigap plan is blocked at this point because of underwriting requirements.

This is why it’s so important to get it right the first time.

Compare Medigap plan benefits

Here are the benefits of the three most popular Medigap insurance plans. For a table including all plans, go to Medicare.gov.

*Plans F and G offer a high-deductible plan in some states.

**Plan N pays 100% of the costs of Part B services, except for copayments for some office visits and some emergency room visits.

Note: Plan F isn’t available if you turned 65 on or after Jan. 1, 2020, and to some people under age 65. You might be able to get these plans if you were eligible for Medicare before Jan. 1, 2020, but not yet enrolled.

Source: Medicare.gov

Timing is key

The timeline is to first get Medicare Part A (which covers hospital charges) and Part B (doctors), and then consider a Medigap plan.

There is a limited time window for getting Medigap done with no underwriting. This is known as “guaranteed issue,” and it applies for the first six months after you become eligible for Medicare (typically age 65, although potentially younger for those with disability).

And what if you are still working, and enjoying employer health coverage, past 65? In that case you can delay Medicare — meaning that the clock on your Medigap decision is also stopped. (Note that that clock only starts when you select Medicare Part B.) After you stop working or lose employer health coverage, you have an eight-month special enrollment period for Medicare.

But wait beyond these time windows for your Medigap choice, and you may have a problem.

“This is a one-time opportunity that does not repeat,” says Nancy Ochieng, a senior policy analyst with KFF. “If you miss that window, you can be charged higher premiums, or be denied a Medigap policy.”

As a result, you want to do your research before turning 65, so you don’t get caught flat-footed. NCL’s Greenberg suggests starting your homework well in advance — as much as 18 months beforehand.

Switching is a challenge

If you don’t like your initial selection, switching plans later on or getting a new plan can be difficult, expensive or impossible.

If you do want to swap Medigap plans without underwriting, you can do so, but only within that six-month Medigap open enrollment period (after you have signed up for Medicare). After that, you may not qualify for “guaranteed issue,” which could mean higher premiums or outright denial.

Practically speaking, if you miss that period and develop serious health issues, you can feel trapped in your existing plan. “People might think they can easily switch out at any time, but you can’t,” says Greenberg. “I don’t like that model at all. You’re stuck in a service you no longer want.”

There are, however, some exceptions, depending on where you live. Connecticut, Massachusetts and New York, for instance, offer continuous or guaranteed issue at any age, and Maine offers it during a one-month period every year (although only one plan type, Plan A). Next year, Minnesota, as well, is slated to allow enrollees a one-time opportunity to get a Medigap plan, at a potentially higher cost after their initial enrollment period.

Eight states have a so-called “birthday rule” that allows switching without underwriting to a Medigap policy that is similar or less comprehensive than the one you have.

Specific qualifying events also come into play in 35 different states, according to KFF tabulations. Those might include losing retiree coverage from your previous employer, moving out of a plan’s service area or losing Medicaid eligibility.

Paying the bill

There are a lot of things to like about Medigap, but there is no denying that there is a bill attached, which could become bigger.

“Plan G is the most popular Medigap plan, and in that plan for major medical care — doctors, hospitals, imaging — you won’t face any costs out-of-pocket,” says Moss. (It does not cover Part B deductibles.) “But that does come at a cost, which is that you have to pay the Medigap premium.”

Those premiums can vary widely from state to state, and provider to provider. The average of all Medigap policies is $217 monthly, according to MedPAC data. But that ranges from $191 in Alaska, to $267 in New York.

And with the popular Plan G, the average is $164 nationally — but only $140 in Hawaii and New Mexico, and $236 in New York.

“Focus groups generally say they are satisfied with their Medigap plans, but premiums remain one of the primary concerns,” says KFF’s Ochieng. “Because Medigap is regulated at the state level, the state sets the rules, and that makes premiums vary a lot. That makes it very important to compare policies and consider the premiums.”

There are different pricing systems you might encounter: It might be a “community rated,” where everyone in your location is charged a similar amount, regardless of age. Or pricing might be “issue-age rated,” based on how old you were when you got the policy; or “attained-age rated,” meaning that your premiums will go up over time.

To wit: Year-over-year Medigap premium increases from 2023-24 ranged from 0% to 18%, for insurers with over a million Medigap members, according to the American Association for Medicare Supplement Insurance. For companies with between 400,000 and a million members, the price hike ranged from 7.5% to 20%.

One positive is that there are a fair amount of deals available, similar to those you find elsewhere in the insurance world. “There are a lot of discounts,” says Moss. “For example, you might qualify for discounts for women, or non-smokers, or married people, or whether you pay on an annual basis, or if you buy directly from an insurer instead of through an agent.”

Agents and incentives

There’s an entire industry of brokers and agents who can walk you through this choice. That can be both good and bad. After all, they have a financial incentive for their work; they work on commission.

Your first stop should be State Health Insurance Assistance Programs, at www.shiphelp.org. You can get one-on-one, unbiased help from trained counselors. “That’s the primary resource that should be used,” says KFF’s Ochieng.

As for brokers: As long as you know how they’re compensated, and don’t feel pressured into choosing the wrong plan, then you use them to gather information.

“I think it’s a wise idea for people to take advantage of those folks,” says Greenberg. “If I were trying to make my own decision, I would talk to several different brokers and get their views. I’m that kind of consumer.”

Other things to watch out for: Perhaps an agent works with a particular company or companies, and since they don’t work with all providers, they may not be showing the entire menu of plans available to you. (Check your state insurance website for a fuller picture, and to research complaint data.)

Or they might be given perks by providers for sales, and be incentivized to steer you into certain plans. That was the main focus of Senator Elizabeth Warren’s (D-Mass.) 2023 report “Sales Before Seniors: How Medigap Insurers’ Sales Rewards Hurt Seniors on Medicare.”

Its findings: Six million beneficiaries purchased Medigap plans from companies that offered salespeople rewards like cash bonuses or trips to places like the Bahamas, Maui and Aruba.

That’s not illegal — but creates “incentives for them to steer older adults to Medigap products that may not be the best fit for their financial and healthcare needs,” the report says.

As for David Haas, he opted for the Plan G high deductible version, which charges much lower premiums, but still protects him in those catastrophic health crises that can really blow up his finances. He hopes he made the right choice.

Medicare Open Enrollment for 2026

The annual Medicare Open Enrollment period for 2026 starts Oct. 15 and runs through Dec. 7. You can make changes to your coverage, such as switching to a Medicare Advantage plan, enrolling in or dropping a Part D plan or switching back to Original Medicare.

Where to turn

Given the complexity of the subject and the volume of information about Medigap plans, how can you make sense of it all? A few places to start:

State Health Insurance Assistance Programs: When it comes to plan particulars, it’s state-level information you want, since that’s where programs are administered. Use the SHIP locator at SHIPhelp.org, or call 877-839-2675.

Medicare Plan Finder: This is a helpful federal site (www.medicare.gov/plan-compare) for walking you through supplemental coverage options. Enter your zip code, and get an immediate display of Medigap plan options available, from A though N.

MedPAC: MedPAC advises Congress on Medicare policy. To learn what plans are most popular, a breakdown of benefits, how premiums are set and so on check out the “Preliminary Work on Medigap” presentation.

Independent reviews: Some financial information sites rate Medigap plans. NerdWallet recently outlined its picks for 2025. (Overall winner: AARP/United Healthcare.) Or ValuePenguin makes suggestions based on plan type, rather than particular companies. Its selection for most people: Plan G.

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.

Related content

• What’s the Best Medigap Plan?
• What You Must Know About the Different Parts of Medicare
• Brace for Higher Health Costs in 2026: A Look at Projected Medicare Premiums
• Watch Out for the 'Medigap Trap'

The 2025 Medicare Trustees Report projects a steady increase in Medicare Part B premiums and IRMAA surcharges over the next nine years. The projections are based on expected rises in healthcare costs, particularly for outpatient hospital services and physician-administered drugs. It's crucial for retirees and those approaching retirement to understand these projections for proper financial planning.

It's essential to note that these projections are subject to change, and the official figures may vary. The Centers for Medicare and Medicaid Services (CMS) will release the official numbers this fall.

Projected Medicare Part B premiums

The projections in the 2025 report show a significant increase compared to last year's report. The largest year-over-year jump is expected between 2025 and 2026, with a projected increase of $21.50, setting the 2026 Part B premium at $206.50, up from $185.00. The 2024 report projected a 1% increase from 2025 to 2026, with premiums rising to $186.90, only $1.90 more.

The report estimates that the standard monthly premium for Medicare Part B will potentially reach almost $350 by 2034. If the estimates are accurate, the Part B premium is expected to increase by 188% by 2034.

Here is a table with the projected standard monthly premiums:

Projected Medicare Part B IRMMA surcharges

The IRMAA is a monthly surcharge added to the standard Part B premium. The SSA uses the most recent complete federal tax return data that the IRS provides to assess your liability for the IRMAA, generally, two years prior. For 2026, the SSA will look at your 2024 tax return to calculate the surcharge you owe, if any.

These surcharges, which affect high-income beneficiaries, are expected to grow significantly over the next nine years.

Essentially, those who pay the IRMAA are paying a greater share of their actual Medicare Part B and D premiums. As it stands, the government pays a substantial portion — about 75% — of the Part B premium for most beneficiaries who pay, on average, the remaining 25%. For 2024, premiums from Parts B and D covered 23% of Medicare program costs, according to the 2025 Trustees' Report.

If you are a higher-income beneficiary, you will pay a larger percentage of the total cost of Part B based on the income reported on your annual tax return. You'll pay monthly Part B premiums equal to 35%, 50%, 65%, 80%, or 85% of the total cost, depending on your income and subsequent surcharge amount. For 2025, the IRMAA Part B surcharge ranged from $74.00 to $443.90 per month, or $888 to $5,326.80 annually, on top of the base premium of $185.00.

For 2026, the standard Part B premium is projected to be $206.50, and monthly Part B surcharges will range from $82.60 to $495.60.

Here is a table with the projected Part B IRMAA surcharges:

Other factors that contribute to IRMMA surcharges

As I explained above, the IRMAA surcharge shifts responsibility for a greater portion of Part B premiums from the Medicare trust fund directly to high earners. However, politics also plays a role in determining how many people pay the IRMAA by adjusting thresholds, freezing inflation adjustments and changing methodologies.

Effective in 2018, the Medicare Access and CHIP Reauthorization Act of 2015 lowered certain income thresholds used to determine the IRMAA amounts that beneficiaries must pay, resulting in a greater number of beneficiaries paying the higher amounts. Moreover, beginning in 2020, the legislation adjusted the methodology used to index the thresholds, and accordingly, more beneficiaries will be subject to the income-related premiums.

Lastly, the Bipartisan Budget Act of 2018 established an additional premium level that took effect in 2019 for individuals with incomes at or above $500,000 (and couples with incomes at or above $750,000), who pay a premium covering 85% of the average program cost. These thresholds will not be indexed until 2028 at the earliest.

Editor’s note: This story has been updated to reflect the amounts at which the 2025 IRMAA surcharge starts.

Related Content

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• Medicare Premiums 2026: Projected IRMAA Brackets and Surcharges for Parts B and D
• When Will Social Security Run Out of Money? And Medicare?
• How to Appeal the IRMAA for Medicare Parts B and D

While Medicare is an essential health program, very few services are truly 'free' for beneficiaries. Most parts of Medicare have premiums, deductibles, or copayments. The main exception is certain preventive services covered by Part B, which are provided with no out-of-pocket cost if the provider accepts assignment.

And don't worry if you miss an answer, you can follow the links below the quiz to brush up on the different part of Medicare, what they cover and the costs.

More on Medicare, from the Kiplinger retirement team:

• Vaccines Medicare Covers for Free in 2025
• 18 Things Medicare Gives You for Free
• What You Must Know About the Different Parts of Medicare
• Medicare Basics: 12 Things You Need to Know
• What Medicare Covers When You Travel in the US and Abroad
• Seven Medicare Changes Coming in 2026
• Prior Authorization Coming to Traditional Medicare Starting in 2026

Here's what Medicare beneficiaries need to know about getting the COVID-19 vaccine this fall.

Does Medicare cover COVID-19 vaccinations?

Medicare's coverage of the COVID-19 vaccine falls under Medicare Part B, which also covers other preventive vaccines like the flu and pneumonia shots. This means you should not have to pay a copay, deductible, or any other out-of-pocket costs for the vaccine itself or for its administration, as long as the provider accepts Medicare assignment.

This coverage applies whether you have original Medicare or a Medicare Advantage Plan (MA). MA plans must, at a minimum, cover everything Medicare covers. If your Medicare Part B plan covers the COVID-19 vaccine, then your MA plan also has to cover it. However, if you have a Medicare Advantage plan, you may need to go to a pharmacy or provider that is in your plan's network.

The biggest source of confusion and barrier to Medicare beneficiaries getting their COVID-19 vaccine covered by Medicare is the CDC's failure to formally adopt the FDA's 2025-26 COVID-19 vaccine recommendations.

The Advisory Committee on Immunization Practices (ACIP), a CDC panel comprised of experts, has yet to vote on the updated recommendations and give them its stamp of approval.

In June, HHS Secretary Kennedy removed all 17 members of the panel, stating in a press release, “A clean sweep is necessary to reestablish public confidence in vaccine science” and "ACIP's new members will prioritize public health and evidence-based medicine."

Why some people are being denied coverage

Despite Medicare's policy of covering the vaccine, some Medicare participants are being improperly denied coverage for the new COVID-19 vaccine at pharmacies. This is partly due to a splintered regulatory environment, creating confusion for both patients and pharmacists.

The CDC's Advisory Committee on Immunization Practices (ACIP) met on June 25. Despite the notice regarding the meeting posted to the Federal Register on June 9, including recommendation votes for COVID-19 vaccines under 'Matters to be Considered,' the vote did not take place. They did, however, approve recommendations for the RSV and seasonal influenza vaccines.

FDA approval vs. CDC recommendation. The new COVID-19 vaccine has received approval from the U.S. Food and Drug Administration(FDA) for specific groups, including those 65 and older and those with certain underlying health conditions that increase their risk of severe COVID-19. FDA approval alone doesn't guarantee access to the vaccine.

In 18 states and Washington, D.C., pharmacists are only permitted to administer a vaccine if it has also been recommended by the CDC's Advisory Committee on Immunization Practices (ACIP), said Brigid Groves, the American Pharmacists Association’s Vice President of Professional Affairs, as reported by Politifact.

The lack of official recommendations has created a "regulatory patchwork" where some pharmacies are holding off on administering the vaccine to anyone, or are only offering it with a doctor's prescription.

Here are the key reasons for these denials:

• State-specific regulations: A number of states have laws or regulations that prevent pharmacists from giving vaccines that aren't on the ACIP's recommended list, even if the FDA has already authorized them. This means that a person could be eligible for the vaccine under the FDA's criteria, but the pharmacy is legally unable to administer it until the ACIP recommendation comes through.
  • Those states are: Colorado, Connecticut, Georgia, Iowa, Kentucky, Maine, Maryland, Massachusetts, Montana, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, South Carolina, Virginia and West Virginia.
• The shift to a commercial market post-pandemic: COVID-19 vaccines transitioned to the commercial market after Secretary Kennedy declared in August that the public health emergency was over. While Medicare continues to cover the vaccine series and boosters, the process for billing and reimbursement has changed. Some pharmacies may be facing administrative hurdles or are confused about the new billing codes, leading them to deny coverage to avoid issues.

What happens if you are denied coverage

According to Newsweek, some Medicare beneficiaries who were denied coverage for the COVID-19 vaccine were told to pay out of pocket, with costs exceeding $200.

For instance, a woman in California was initially denied coverage because the vaccine "wasn't in the Medicare system." She chose to pay $225 out of pocket for the shot. In a similar case, a couple in Texas encountered the same denial but was able to get their shots after Medicare updated its system.

If you have Medicare and meet the FDA's criteria, a denial for a covered vaccine is improper. The FDA has approved the COVID-19 vaccine for people 65 and older.

If you have trouble getting your vaccine, first confirm your eligibility based on the FDA's criteria, then contact Medicare directly at 1-800-MEDICARE for help.

Call your pharmacy before you go. With all of the confusion over FDA vs CDC approval and the need to update computer systems to properly process vaccine authorizations at pharmacy counters, it's worth a phone call to your local pharmacy before you head out.

Related Content

• Vaccines Medicare Covers for Free in 2025
• Seven Medicare Changes Coming in 2026
• What Does Medicare Not Cover? Eight Things You Should Know
• 18 Things Medicare Gives You For Free

According to the 2025 Fidelity Retiree Health Care Cost Estimate, the average 65-year-old might need $172,5000 to cover health care expenses in retirement. That number could go even higher, depending on your health and longevity.

Thankfully, Medicare provides essential health insurance coverage and can help limit the cost of care.

But Medicare is notoriously complex, creating its own planning challenges, from choosing supplemental insurance to understanding income-based costs.

Here's what you need to know and how Medicare should factor into your retirement planning.

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What is Medicare?

In a nutshell, Medicare is a federal health insurance program for people age 65 and older or those with a qualifying disability.

Similar to Social Security, you generally need to have worked and paid Medicare taxes for at least 10 years or 40 quarters to be eligible.

Unlike Social Security, however, income doesn't factor into coverage — though it can impact how much you pay in premiums and whether you qualify for assistance programs.

These income-based costs and eligibility nuances can affect your retirement budget, so understanding the basics is a key part of planning for long-term financial security.

What costs does Medicare cover?

Medicare is divided into four parts that cover different aspects of health care, from preventative screenings to end-of-life support.

Knowing what each part covers — and, just as important, what it doesn't — can help you plan for potential out-of-pocket expenses, figure out the nuances of prescription drug coverage and avoid surprises that could disrupt your retirement finances.

Let's dig into the details:

Part A. This segment covers skilled nursing facilities, in-patient hospital stays, hospice care and aspects of home care (though not long-term care, unfortunately).

If you paid payroll taxes as part of your job for the required amount of time, there's no premium, though you'll need to pay co-insurance and a deductible of $1,676 in 2025.

Part B. This part pays for outpatient care, doctor's office visits and other aspects of home care. This part comes with a premium of $185 a month and a $257 deductible.

Once you hit the ceiling, Medicare pays for 80% of your expenses — if you don't have supplemental coverage or Medicare Advantage.

Part C. Also known as Medicare Advantage, these are privately administered (rather than government-run) PPO or HMO health insurance plans. To qualify, you need to be enrolled and paying premiums on Parts A and B.

The advantage of Part C is that it simplifies health care management, offers additional benefits like vision and dental (which aren't covered by Parts A and B), limits out-of-pocket spending, can cover more prescription drugs, even provides wellness programs.

Part D. This is standalone prescription drug and vaccine coverage offered by private insurers. Those with Medicare Advantage likely won't need Part D, though those with regular Medicare should consider it since those programs only have limited prescription coverage.

The deductible is roughly $46 this year with a maximum out-of-pocket cost of $2,000 (though this will rise in the coming years).

Enrolling in Medicare: Miss the window, pay the price

For those aging into Medicare, it's best to enroll within the Initial Enrollment Period (IEP). That's a seven-month period covering the three months before, the month of, and the three months after your 65th birthday.

To have coverage start the month of your birthday, you need to enroll at least a month before.

If avoiding a hefty hospital bill is the carrot to incentivize enrollment during the IEP, financial penalties are the stick.

The cost of late enrollment includes an increase in monthly premiums for Part B (10% of the premium for each 12 months delayed) and Part D coverage (1% of the national base beneficiary for each month delayed).

Based on 2025 premiums, this would translate to almost $23 more every year for the rest of your life, which could add up for those on a tight fixed budget.

There are exceptions, though. If you're still working and have medical coverage through your employer, you don't have to enroll during the IEP.

But there's a catch: Your employer must have at least 20 employees covered under its medical plan for this exemption, so the 16% of Americans who work for employers with fewer than 20 workers should enroll during the IEP.

If you're 65 or older and still working for an organization with at least 20 employees, Medicare doesn't offer primary coverage.

Take note, however, that employers can't terminate employment or coverage to avoid covering Medicare-eligible employees.

Companies also can't offer incentives to enroll in Medicare for primary coverage instead of the employer insurance plan.

How much does Medicare cost?

While Medicare isn't directly correlated to income (unlike Social Security), high earners will pay more in premiums due to a surcharge known as the income-related monthly adjustment amount (IRMAA).

Income reflects your modified adjusted gross income (MAGI), which includes wages, Social Security benefits, capital gains and 401(k) distributions, among other sources of income.

This determines what, if any, surcharge you pay for coverage. With Part B, for example, monthly premiums are adjusted via this income scale:

Part D premiums also vary depending on income, although the amounts are much lower, maxing out at just over $1000 annually.

The costs of Medicare Advantage premiums, deductibles and co-insurance will vary alongside coverage, so it's important to work with an adviser to determine which (if any) plan is right for your needs.

What does Medicare mean for my retirement planning?

Because Medicare presents a sizable expense (and can prevent even larger out-of-pocket bills) in retirement, it's important to consider how much coverage you need and how much it will cost, inclusive of premiums, deductibles and co-insurance.

Budgeting with this information in mind can make a big difference when on a fixed income.

With sufficient planning, you can set up tax-exempt income streams that can lower your Medicare bill by lowering your MAGI.

Because withdrawals from Roth IRA accounts, health savings accounts and cash value life insurance contracts* do not count toward MAGI — nor do qualified charitable contributions— using these avenues as income streams or tax reduction strategies** in retirement can lower your accompanying IRMAA surcharge.

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A financial adviser can also work with you to determine which Medicare Advantage and supplemental insurance plans align with your fixed income streams and your likely health needs in your golden years.

Because Medicare doesn't cover long-term expenses, for example, an adviser can recommend a supplemental long-term care plan that can fill that coverage gap. Remember, taking action before you need this coverage is an essential part of retirement preparedness.

Your Medicare checklist

As you plan for Medicare in retirement, make sure you've done your homework and consulted experts who can help assess what makes the most sense for you. Start by:

• Spending two to three months reading up on Medicare plans and programs to better understand the program (including Kiplinger's excellent Medicare reporting).
• Consult with an adviser on whether a Medicare Advantage plan makes sense for you and whether your plan should include Part D prescription coverage.
• Set a reminder to enroll within your IEP, if needed.

* It is important to keep in mind that the primary purpose of cash value life insurance is death benefit protection for your beneficiaries. Loans and withdrawals reduce the life insurance policy's cash value and death benefit and increase the chance that the policy may lapse. If the policy lapses, matures, is surrendered or becomes a modified endowment, the loan balance at such time would generally be viewed as distributed and taxable under the general rules for distributions of policy cash values.

** Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice. You should consult with your own qualified tax and legal professionals before proceeding with any course of action.

This article, which has been written by an outside source and is provided as a courtesy by Stephen B. Dunbar III, JD, CLU (AR Insurance Lic. #15714673), Executive Vice President of the Georgia Alabama Gulf Coast Branch of Equitable Advisors LLC, does not offer or constitute, and should not be relied upon, as financial, tax, accounting, or legal advice. Equitable Advisors LLC and its affiliates do not make any representations as to the accuracy, completeness or appropriateness of any part of any content hyperlinked to from this article. Your unique needs, goals and circumstances require the individualized attention of your own tax, legal, and financial professionals whose advice and services will prevail over any information provided in this article. Stephen B. Dunbar III offers securities through Equitable Advisors LLC (NY, NY 212-314-4600), member FINRA, SIPC (Equitable Financial Advisors in MI & TN), offers investment advisory products and services through Equitable Advisors LLC, an SEC-registered investment adviser, and offers annuity and insurance products through Equitable Network LLC (Equitable Network Insurance Agency of California LLC). Financial professionals may transact business and/or respond to inquiries only in state(s) in which they are properly qualified. AGE-8249926.1(08/25)(exp.08/29)

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Every fall, Medicare Advantage (MA) and Medicare Part D prescription drug plans are required to send an ANOC to their members. The notice provides a detailed summary of all the changes to the plan's benefits, costs, and coverage for the upcoming calendar year.

The arrival of the new notice is an opportunity to consider whether your current Part D drug plan or MA plan is still the best way to receive the care you need at a price you can afford. If not, it may be time to change plans.

If you don't receive your ANOC letter by September 30th, you should contact your plan provider to request it. It will arrive by mail or email, depending on which option you chose; it may also be available on your plan's website.

What's in the Annual Notice of Change (ANOC) Letter?

The letter compares your current plan's benefits with those of the upcoming year, highlighting any changes. Key information you'll find in the ANOC includes:

Why your Annual Notice Of Change (ANOC) matters

The ANOC letter is critical because it gives you the information you need to make an informed decision about your healthcare coverage during the Medicare Annual Enrollment Period (AEP), which runs from October 15 to December 7 every year.

Medicare Advantage and Medicare prescription drug plan insurance providers review their plan details each year and communicate changes to next year's coverage and costs in the letter.

An ANOC can help you in three important ways:

• Avoid unpleasant surprises: Without reading the ANOC, you could be surprised on January 1 by higher costs, a medication no longer being covered, or that your doctor or preferred facility is no longer in your network
• Provides actionable information: If you're not satisfied with any upcoming changes, the ANOC serves as a reminder to explore other plan options available in your area. You can then switch to a new Medicare Advantage or Part D plan during the AEP that better suits your needs. You can even switch back to original Medicare from an MA plan
• Empower you: The letter gives you the power to assess whether your current plan still meets your health and financial needs. Even if you were happy with your plan this year, the changes outlined in the ANOC might make it less suitable for you next year

Where to find help

Take time to review your plan. You don’t want to be caught off guard by higher costs or coverage changes after January 1. Whether you decide to stay with your current plan or to explore other Medicare coverage options, you want to make that choice based on the facts.

If you have any questions about the upcoming changes, contact your plan’s customer service department. They can help you understand the details of the changes to your coverage.

If you want to look at Medicare Advantage and Part D plans in your area, you can use the Medicare.gov/plan-compare tool to compare health and drug plans in your locale.

1-800-MEDICARE: You can call this number to ask questions about your Medicare options. Help is available 24 hours a day, except on federal holidays, when the offices are closed. TTY users should call 1-877-486-2048. Or, visit Medicare.gov.

State Health Insurance Assistance Programs (SHIPs): Contact your local SHIP for free, personalized counseling from trained volunteers. Federally funded SHIPs provide unbiased help (to people and their families) with Medicare issues and finding coverage.

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Previously, CMS instituted a similar prior authorization process for the same procedures in 2020. However, the 2020 scheme was nationwide and only applied to hospital outpatient department (OPD) services. This demonstration will only cover 10 states, including: California, Florida, Texas, Arizona, Ohio, Tennessee, Pennsylvania, Maryland, Georgia and New York. It also differs from the 2020 initiative by focusing on ASCs.

The preauthorization requirement goes into effect for dates of service on or after December 15, 2025. Providers can begin submitting prior authorization requests beginning on December 1, 2025.

CMS is changing the timeline, not the requirements

The new demonstration program does not change existing medical necessity or documentation requirements. Instead, it requires the same information to be submitted before the procedure is performed to help providers avoid claim denials and appeals.

"Prior authorization does not create new clinical documentation requirements. Instead, it requires the same information that is already required to support Medicare payment, just earlier in the process," CMS said on its website.

Services included in the prior authorization demonstration

The demonstration targets specific services that have shown a significant increase in utilization in the ASC setting. These services can potentially be provided as cosmetic procedures, rather than medical, making them vulnerable to improper use and payments.

The services to be included in the prior authorization demonstration are:

• Blepharoplasty — eyelid surgery
• Botulinum toxin injections
• Panniculectomy — abdominal wall contouring
• Rhinoplasty — nose repair
• Vein ablation procedures — treatment for varicose veins

For instance, a blepharoplasty is the medical term for eyelid surgery. It is a common cosmetic procedure that can rejuvenate the area surrounding your eye by removing excess skin from the upper or lower eyelids. This surgery can also be medically necessary when someone's vision becomes impaired due to excessive tissue or droop in the upper eyelids.

And although Botox is synonymous with smoothing wrinkles, it also has some FDA-approved medical applications for migraines, overactive bladders and certain muscle spasms.

The purpose of the new prior authorization

Medicare's prior authorization plan for certain ambulatory surgical services is intended to ensure that services are medically necessary and to prevent improper payments and fraudulent billing. This plan follows a similar program that's already in place for hospital outpatient departments (OPDs).

"Prior authorization helps CMS to make sure services frequently subject to unnecessary utilization are provided in compliance with applicable Medicare coverage, coding, and payment rules before they are provided..." according to the ASC Demonstration FAQs.

The CMS is playing catch-up. After the prior authorizations were implemented for hospital outpatient procedures, there was a shift of these services out of OPDs to ambulatory surgical facilities. "These increases are likely related to OPD services shifting to the ASC, as the OPD prior authorization program continues," the CMS said in the FAQ.

Medicare patients who need these services shouldn't have to wait longer due to the prior authorization process. Decisions will be sent within seven days of the request for standard review and two business days for expedited review.

Use of prior authorizations in original Medicare is growing

This new demonstration doesn't go as far as the current prior authorization requirements for services received in hospital outpatient departments. In the OPD setting, cervical fusion with disc removal, implanted spinal neurostimulators, and facet joint interventions are also subject to the prior authorization requirements.

Once a rarity in original Medicare, the use of prior authorization to identify and reduce improper billing and fraud is expanding. In 2026, six states — New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington — will begin using the Wasteful and Inappropriate Service Reduction (WISeR) Model to perform prior authorization evaluations for 17 services that CMS says "are vulnerable to fraud, waste and abuse."

Related Content

• Prior Authorization Coming to Traditional Medicare Starting in 2026
• Seven Medicare Changes Coming in 2026
• Why Is My First Medicare Bill So High?

It's important to keep in mind that how much you pay for Medicare overall will depend on how much you earned two years before you sign up. If you earn over a certain threshold, you will pay a monthly surcharge on top of your Part B and Part D premiums; this is called the IRMAA or the income-related monthly adjustment amount. However, this surcharge is based on your tax return from two years ago. It's a good idea to take note of your income from two years prior when you fill out your Medicare application; it can help you estimate whether or not you might be liable for this extra charge.

Important Medicare enrollment information

Before we move on any further, let's cover some basics. You become eligible for Medicare when you turn 65. There is no early enrollment option if you decide to retire early or begin collecting Social Security before age 65. However, if you are collecting benefits before your 65th birthday, you will be automatically enrolled in both Medicare Parts A and B. You can decline Part B coverage, but can't disenroll from Part A.

Otherwise, you must enroll for Medicare at age 65, or you will pay late enrollment penalties. However, the rules are different if you are still covered by an employer-provided health care plan. If you or your spouse (if you’re covered by your spouse’s insurance) is still working for a firm with 20 or more employees, the employer’s insurance is your primary coverage. Moreover, you aren’t required to sign up for Medicare at 65, and you won’t have a late-enrollment penalty as long as you sign up within eight months of losing work-based coverage or losing coverage under your spouse’s insurance.

Many people still sign up for Medicare Part A hospital insurance at 65, even when covered by an employer plan. And why not? About 99% of Medicare beneficiaries do not have a Part A premium. Part A is premium-free if you or your spouse has at least 40 quarters of Medicare-covered employment. It can serve as your secondary coverage, filling in the gaps where your employer's coverage leaves off.

Here's a breakdown of the most common reasons why your first Medicare bill might be so high:

1. The most likely explanation: You’re not collecting Social Security yet and the bill covers multiple months

Unlike most of your monthly bills, Medicare Part B premiums are often billed quarterly, meaning you are paying for three months at a time. The first bill can be even higher because it may include retroactive premiums from the time your coverage started. Essentially, you pay ahead for three months of original Medicare coverage when you first sign up, and you pay for each quarter in advance after that. This can make your first payment shockingly high.

Medicare provides an example to illustrate how this can be the case: If you sign up for Medicare in February and your coverage begins February 1st, your premium will be billed quarterly, and your first bill will be dated March 28. It will arrive around April 10 and be due April 25. This bill will cover the upcoming three months and include any premiums you weren't previously billed for. That means your first bill would include the previous amount owed (for February, March, and April) and what you owe for the upcoming three months (May, June, and July). Moving forward, your future bills will only be for three months at a time.

In most cases, the cost of your Medicare Part B premium is deducted from your Social Security payment, so you never receive a bill that you actually have to pay. You may still receive a statement from Medicare reflecting premiums that have been paid, but it will be marked, “This is Not a Bill.”

So, if you enrolled in Medicare but haven’t started receiving Social Security payments yet, there is nothing to pay your premiums from, and you will have to pay these charges directly. That is why you receive a bill, not a statement. This will change after you begin collecting Social Security; if your premium is bigger than your benefit, you will continue to receive a bill for the remainder.

2. Late enrollment penalties

If you don't enroll in Medicare Part B, and in some cases, Part A, when you are first eligible, you may have to pay a late enrollment penalty. This penalty is not a one-time fee; it is added to your monthly premium for as long as you have Medicare. If you have credible coverage from your employer, you aren't penalized for maintaining your workplace benefit.

How much more?

Part B Penalty: The penalty is an extra 10% of the standard monthly premium for each full 12-month period you were eligible for Part B but didn't sign up.

Part A Penalty: If you have to pay a premium for Part A and you don't sign up when you're first eligible, your monthly premium may go up by 10%. You'll have to pay this higher premium for twice the number of years you could have had Part A, but didn't.

3. Income-Related Monthly Adjustment Amount (IRMAA)

If your income is above a certain threshold, you may have to pay an extra amount on top of your standard Part B and Part D premiums. This is called the Income-Related Monthly Adjustment Amount, or IRMAA. The Social Security Administration (SSA) determines this surcharge based on the adjusted gross income reported on your tax return from two years prior. This additional charge can significantly increase your premiums above the standard amount.

For 2025, IRMMA Part B surcharges range from $74.00 to $443.90 and from $13.70 to $85.80 per month for Part D. These surcharges kick in for single filers who make over $106,000 and at $212,000 for couples that file jointly.

Medicare billing practices

Bills sent by Medicare typically arrive around the 10th of the month. All Medicare bills are due on the 25th of the month. In most cases, your premium is due the same month that you get the bill. If you miss a payment or if Medicare receives your payment late, your next bill will also include a past-due amount. To ensure your payment is on time, the CMS recommends that you submit your payment at least five business days before the due date.

Be aware that if your bill says “Delinquent Bill” and you don’t pay the full amount by the due date, you could lose your Medicare coverage.

You can take a look at a sample Medicare bill (CMS-500) that explains the various parts of the bill and what the information in each section means.

How to pay your Medicare bill and IRMAA surcharges

Paying your Medicare premiums, surcharges and penalties is easy. Whether you want to pay by check, credit card, debit card or money order, there is a way to make the payment. If you don't want to hassle of making a monthly payment, there are ways to set up automatic payments from your checking or savings account.

IRMAA surcharges. It’s your responsibility to pay the IRMAA, even if your employer or a third party (a retirement system) pays your Part D plan premiums. You’ll receive a bill each month from Medicare for your Part B and D IRMAA surcharges , and you can pay it the same way you pay your Part B premiums.

Here are four ways you can pay your premiums:

• Online through your secure Medicare account, which is the fastest way to pay. Use this free service to pay by credit card, debit card or from your checking or savings account. Don’t create or use a Pay.gov account to make your Medicare payment. Use your Medicare account to pay your bill.
• Sign up for Medicare Easy Pay. With this free service, Medicare automatically deducts your premium payments from your savings or checking account each month. It can take up to six to eight weeks for your automatic deductions to start. You'll need to pay your premiums another way until your automatic deductions start.
• Mail your payment to Medicare. You can pay by check, money order, credit card, or debit card. If you’re paying with a check, money order, or mail-in credit card payment, your payment will be delayed if you don’t include this coupon with your payment. Use the return envelope that came with your bill, and mail your Medicare payment coupon and payment to: Medicare Premium Collection Center, PO Box 790355, St. Louis, MO 63179-0355.
  • Caution: If you are paying by debit or credit card, and you don’t sign and include this coupon, your payment won’t be processed and will be returned to you. Write your Medicare Number on the check or money order.
• Use your bank’s online bill payment service to pay monthly or set up an automatic monthly payment.
• Payments by phone are not accepted.

What to do next

If your first bill is higher than you expected, don't panic. First, review the bill carefully to determine which months it covers and if any penalties or surcharges are listed. You can also contact the Social Security Administration or Medicare for clarification. Understanding the reasons behind the higher cost can help you prepare for future payments and ensure you are being billed correctly.

If you or a spouse has a health savings account (HSA), you are in luck. You can use the account to reimburse yourself for amounts paid for premiums, co-payments and deductibles.

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Answer: By age 60, you may be at the point where you’re unhappy at your job and can’t take the grind any longer. If you have a large pile of savings, you may be perfectly positioned to make an early workforce exit.

There’s just one problem. Unless you have a spouse who’s still working with a company health insurance plan you can hop onto, you’re going to have to pay for coverage yourself until you become eligible for Medicare. Generally, that doesn’t happen until you turn 65. Having to pay for health insurance could whittle an otherwise generous nest egg down too quickly for comfort. That doesn’t mean you don’t have options, though.

Know what it will cost to pay for health insurance

It may be that if your portfolio is generating a nice amount of income and your living costs are fairly low, you can afford the expense of health insurance premiums for a five-year period with $2.8 million in savings. But it’s important to know what you’re getting into, says Scott Sturgeon, CFP and Founder/Senior Wealth Advisor at Oread Wealth Partners.

“A person retiring at 60 essentially enters a 'health care desert' where they have to go out and find some sort of coverage on their own,” he says. “When I run projections for a client in this situation, I would probably budget at least $1,000 per month, per person in health insurance premiums as part of their cash flow plan.”

Of course, Sturgeon cautions, the cost of health insurance can vary based on your needs and your market. But that’s a starting point he likes to work with.

However, there’s another option, says Sturgeon. Whether it’s more cost-effective, though, depends on the circumstances.

“If they can hold out a couple of years, COBRA may also be an option where they maintain the current health care plan they have through work but have to pay the premiums themselves,” he says. “That can get pricey, so it's something that needs to be reviewed carefully.”

Gil Baumgarten, Founder and CEO at Segment Wealth Management, agrees that COBRA could be an option but warns that it typically has an 18-month limit. Even if you’re willing to cover the cost, it won’t bridge a five-year gap until Medicare kicks in. And he says that based on his experience, “A 60-year-old couple should expect to pay $15,000 or more per year for coverage.”

Consider a health insurance co-op

Given the high cost of health insurance, Baumgarten says people retiring before becoming eligible for Medicare could consider another option — a health insurance co-op. This option, he says, can result in big savings.

“There are several that are faith-based for whatever religion might apply,” Baumgarten explains. “Christian Health Ministries and Christian Healthcare Plan offer practicing Christians an expense-sharing co-op that is significantly less expensive than traditional insurance. United Refuah HealthShare offers similar resources for Jewish affiliations, also at greatly reduced cost as compared to traditional insurance.”

This option, however, may not be available in all markets. And you may not receive the same level of coverage as through a traditional insurance plan.

A scenario worth planning for in advance

Some people don’t realize they want to retire ahead of Medicare eligibility until they reach a certain point in their careers when they can’t take it anymore. That’s why Sturgeon thinks younger workers should anticipate wanting to retire well before 65 — and plan accordingly.

In this situation, he says, “If we could rewind 10 or 20 years, the ideal strategy I would suggest is using a high deductible health care plan, maxing out their health savings account, paying out of pocket for any deductibles, and investing the HSA funds.”

As Sturgeon explains, someone with a lofty HSA balance could dip into those dedicated funds, enroll in an ACA plan with a fairly high deductible at 60, and then use HSA funds to pay those expenses until Medicare becomes available.

Of course, it’s also possible to dip into your general savings to cover health care costs as they arise. The question, though, is whether you can afford to.

With $2.8 million in savings, you have some wiggle room to dip into your savings to cover health care costs. But a better bet would be to try to limit health care withdrawals until Medicare kicks in.

To this end, working part-time is something to consider, as it could allow you to secure health coverage through an employer, even if the coverage itself isn’t that great. At the very least, you may not have to bear the cost of premiums on your own.

Going without health insurance isn't an option

If you’re fairly healthy at age 60 and don’t want to see your hard-earned savings dwindle, you may be tempted to forgo health insurance completely and hope for the best until Medicare becomes available to you. But that, cautions Baumgarten, is a big mistake.

“Going without insurance at that age can also completely wreck your finances with a major health event,” he warns.

If you’re truly done working, period, at 60, your best bet may be to budget carefully and live a bit more frugally while paying for health insurance through age 65. Once Medicare kicks in, you may be able to boost your spending in other areas.

Also keep in mind that come age 67, you’ll be eligible for your monthly Social Security benefits without a reduction. That, combined with distributions from your remaining savings, could make for a reasonably comfortable retirement lifestyle, even if your nest egg was tapped substantially during the five-year period when you were covering your health insurance costs.

Read More

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Answer: One of the biggest misconceptions people have about Medicare ahead of retirement is that coverage under it is free. In addition to coinsurance and deductibles, Medicare enrollees are charged a premium for Part B, which covers outpatient care, and Part D, which covers prescription drugs.

Medicare Part B has a standard monthly premium that changes annually. In 2025, it’s $185.

There’s no standard monthly premium for Part D, as those costs are plan-specific. But in either situation, you could end up facing surcharges on your Part B or Part D premiums if you’re hit with an income-related monthly adjustment amount, or IRMAA.

IRMAAs drive the cost of Medicare coverage up for higher earners. And the tricky thing is, they’re based on your income from two years prior.

In 2025, you'll face an IRMAA if your 2023 income was greater than $106,000 as a single tax-filer, or greater than $212,000 as a married couple filing jointly. IRMAA thresholds change annually, so they can be tough to plan for.

But what makes IRMAAs even worse is that a spike in income for a single year could drive your costs upward after the fact. That said, if you’re now facing Medicare IRMAAs and are struggling to keep up with your premium costs as a result, you may have options.

You can always appeal

IRMAAs can drive the cost of Medicare up substantially. But you’re not necessarily stuck with IRMAAs forever, says Brian Schmehil, CFP, Managing Director, Wealth Management at The Mather Group.

“IRMAA is recalculated annually, based on your modified adjusted gross income from two years earlier,” he explains. “If your income has since dropped below the applicable thresholds, your premiums will be adjusted accordingly for the following year — no action required.”

Schmehil says you may also be able to appeal an IRMAA if your circumstances have changed over the past two years and your income was higher two years ago due to a specific reason.

If you’ve since experienced a life-changing event, such as retirement, divorce, the death of a spouse, or the loss of income-producing property, you may be able to reduce your current premiums sooner, he explains.

“You can appeal the IRMAA determination by filing Form SSA-44 with the Social Security Administration,” Schmehil says. “If your appeal is approved, your premiums may be lowered and any overpayments reimbursed.”

Brandon Hill, Senior Advisor at Beckett Financial Group, says it pays to go through the motions even if you’re not sure you’ll be let off the hook as far as IRMAAs go.

“If your income today is no longer what it was two years ago, there is no harm in filing an appeal,” he says.

How to avoid IRMAAs

While appealing an IRMAA is always an option, a better bet may be for you to try to avoid one altogether. To that end, Schmehil suggests being mindful of your income the year of your 63rd birthday if you intend to enroll in Medicare at 65, which is when eligibility typically begins. One thing you could do, he says, is accelerate income prior to turning 63, such as taking gains on investments, so that it doesn’t count against you in IRMAA calculations.

Hill, meanwhile, suggests drawing from investments strategically to avoid IRMAAs.

"Try to avoid withdrawing from tax-deferred, qualified fund vehicles like traditional IRAs or employer plans like 401(k)s, 403(b)s, etc., as all of that income has never been taxed and would be taxable to you as ordinary income," he says.

However, Hill notes that Roth IRA withdrawals do not count toward IRMAAs. It could pay to do a Roth conversion ahead of retirement for this reason.

But be careful with the timing of that conversion. You may want to do Roth conversions ahead of age 63 so they don't drive you over the threshold where IRMAAs would apply, since funds converted from a traditional IRA to a Roth count as taxable income for that same year.

Hill also says that if you're still working at the time you become eligible for Medicare, there are steps you can take to reduce your likelihood of facing a surcharge.

"Maximize contributions to your retirement plans to get your taxable income down," he says.

Another potential option? If you’ve had a spike in income later in life, it could pay to delay your Social Security claim so those benefits aren’t added to your income. Incidentally, delaying Social Security past full retirement age results in boosted monthly benefits for life, so there’s the perk of more guaranteed income to enjoy, too.

Of course, larger Social Security benefits in retirement also put you at risk of future IRMAAs if, combined with retirement plan withdrawals, they result in a very large income. But if your income in retirement is going to be consistently high, IRMAAs may have to become a part of life for you — and an expense to brace for. The plus side is that if you’re liable for IRMAAs year after year in retirement, it means you’re probably enjoying a generous income that softens the blow.

Related content

• The Retirement Rule of $1 More
• Medicare Premiums 2026: Projected IRMAA Brackets and Surcharges for Parts B and D
• Six Medicare Changes Coming in 2026
• Four Proposed Changes to Medicare in the One Big Beautiful Bill Act — and What Ended Up in the Signed Bill

Additionally, the Secretary of the Department of Health and Human Services (HHS) can declare a Public Health Emergency that can also allow for the waiver or modification of Medicare Advantage requirements.

Surviving a disaster can be overwhelming and disorienting. That's even more the case when you are dependent on life-sustaining medication and care.

If you depend on a Medicare Advantage plan, you might be worried that you'll owe steep out-of-pocket costs if you have to see doctors or seek care at a hospital outside of your plan's network. Fortunately, the rules require MA plans to waive a number of their usual requirements and restrictions, allowing you to get the medical support you need, at no extra cost, during a disaster.

These special rules are in effect for a limited time following a disaster declaration. The specific duration can vary, but generally, the changes last for at least 30 days. You may still be displaced or impacted by a disaster when these special rules expire. Getting in touch with your MA plan provider as soon as possible can get you the needed assistance and limit your out-of-pocket expenses.

Older people who rely on original Medicare don't have any portability issues to worry about; their coverage has no geographic or network limitations and is accepted nationwide.

Here's a breakdown of the key rules for using Medicare Advantage during a disaster:

Access to medical care during a disaster

During a declared disaster or emergency, your Medicare Advantage plan must allow you to get care from other health care providers at Medicare-certified facilities, even if they aren't in your plan's network and your health care need isn't an emergency. If you have problems finding a provider, contact your plan for help

It's a good idea to become familiar with your plan rules during an emergency or disaster before something actually happens. They may be able to recommend providers and locate pharmacies outside of your immediate area, and save you some time. You can usually find your plan's contact information on your plan membership card, or you can also call 1-800-MEDICARE (1-800-633-4227) for assistance.

If you need regular care from a specialist, it would be to your advantage to put a list of providers, in and out of network, in surrounding communities. Pre-planning can help you address your medical needs more quickly. Don't overlook that access to the internet and phone service can be disrupted by inclement weather. Having a list that includes addresses and directions at the ready can move things along.

• Out-of-Network Care: Your plan must allow you to receive care from out-of-network providers at Medicare-certified facilities, even for non-emergency services, if you can't reasonably get to an in-network provider.
• Cost-Sharing: The plan must charge you the same cost-sharing amounts for copays, deductibles, etc., for out-of-network care as you would pay for in-network care. If you pay more, you should save your receipts and contact your plan for a refund.
• Referrals: Gatekeeper referrals, such as needing a referral from a primary care physician to see a specialist, must be waived. Your plan has to suspend these requirements.
• Authorization: The plan may suspend rules that require you to get prior authorization for certain services if failing to do so would increase your costs or limit your access to care.
  

Prescription drug access in a disaster

There are a few ways you can get a refill of your prescription medications in an emergency. If possible, move most prescriptions from one in-network pharmacy to another, and back to your regular pharmacy when the emergency or disaster ends. Be prepared to tell the new pharmacy the name of your regular pharmacy, such as the location or phone number, and the drugs you need refilled.

If your only option is to buy your drugs at an out-of-network pharmacy, you’ll probably have to pay full cost for the drugs. If you do pay full costs, save your receipts so you can submit them to your plan for a refund. One downside: you won’t get a refund for any out-of-network cost-sharing amount.

Contact your plan if you need help finding the closest in-network pharmacy or on how to submit a claim. You can also call 1-800-MEDICARE (1-800-633-4227) to get your plan’s contact information. TTY users should call 1-877-486-2048.

• Refills: Your plan must lift "refill-too-soon" restrictions, allowing you to get an early refill of your prescription drugs.
• Out-of-Network Pharmacies: You must have access to covered prescription drugs at out-of-network pharmacies if it's not reasonable for you to get to an in-network pharmacy.
• Extended Supply: You can request to get an extended day supply, usually a 60- or 90-day supply, of your prescription drugs.
• Lost or Damaged Drugs: Your plan must help you replace lost or damaged prescription drugs.

Special Enrollment Period (SEP)

If you missed an enrollment period, such as the annual Medicare open enrollment period, due to a declared disaster or emergency, you may be eligible for a Special Enrollment Period (SEP). This allows you to enroll in, disenroll from, or switch Medicare plans.

This SEP is available to individuals who live in or relied on a helper who:

• Reside, or resided at the start of the incident period, in an area for which the Federal Emergency Management Agency (FEMA) has declared an emergency or a major disaster
• Had another enrollment period at the time of the incident period, the AEP or other special enrollment opportunity, and
• Did not enroll or make a change during that other enrollment period

I want to emphasize that the SEP is available to Medicare beneficiaries who don’t live in the affected areas but rely on help making health care decisions from friends or family members who live in the affected areas. You don't have to be directly impacted by the emergency or disaster to use the SEP.

CMS will establish a special enrollment opportunity for individuals affected by a weather-related emergency or major disaster who need to enroll in, disenroll from, or switch Medicare health or prescription drug plans, and missed other enrollment periods. This opportunity will be available in areas for which FEMA has declared an emergency or a major disaster. It is available as of the start of the incident period and runs for four full calendar months. Enrollments are effective on the first of the month after the plan

For those signing up for the first time: If you sign up for Part A or Part B during a SEP because of a natural disaster or emergency, you’ll have two months to switch to a Medicare Advantage Plan and/or a Medicare Part D drug plan. Your coverage will start the first day of the month after the plan receives your request to join.

You can submit your enrollment request through 1-800-MEDICARE, your agent/broker, or by contacting the Medicare Advantage or Part D prescription drug plan directly.

Have a medical disaster plan

It's important to know the types of disasters that could happen in your community to be better prepared. Sign up for alerts and warnings so you are aware of local plans for evacuations and shelter resources.

Get and emergency kit together; consider the items you use every day and which ones you may need to add to your kit.

Compile a list of your prescription medicines. Include information about your diagnosis, dosage, frequency and any allergies. Pack an extra stash of nonprescription drugs, such as pain and fever relievers, antihistamines and antidiarrheal medicines. Last but not least, don't forget extra hearing-aid batteries.

If you need assistance about your original Medicare or Medicare Advantage plan, you can contact 1-800-MEDICARE (1-800-633-4227) anytime, 24 hours a day, 7 days a week with any questions. TTY users should call 1-877-486-2048.

Related Content

• Six Medicare Changes Coming in 2026
• Prior Authorization Coming to Traditional Medicare Starting in 2026
• Medicare and Moving: What You Need to Know
• How to Prepare For a Hurricane and Other Natural Disasters

The premium for Medicare Part D is different from the Part B premiums in a few ways. Unlike Part B, Part D is sold by private companies as a standalone policy to those enrolled in traditional Medicare. It is also sold to beneficiaries with Medicare Advantage plans that don't include prescription drug coverage.

The actual premium that a beneficiary pays varies according to the plan in which the beneficiary enrolls. That's why the average paid premium for Part D has always been lower than the base beneficiary premium listed in the Trustees report. For 2026, the base premium for Part D is projected to be $38.99.

The projected Part B increase impact on Social Security benefits

How might prices rise even more? Well, the 2026 Social Security COLA is projected to rise between 2.6% and 2.7%. In terms of dollars, if implemented now, that would translate into an increase of $54.18 per month or $650.16 per year, when using the average Social Security check amount for July 2025 ($2,006.69) as the base amount.

The Social Security Administration (SSA) automatically deducts the Part B premium cost from the Social Security benefits of most Medicare recipients. That would effectively reduce the increase to the average Social Security check from $54.18 to $32.68, after subtracting the projected Part B increase ($21.50) from the projected 2026 COLA raise ($54.18). In that scenario, the Part B increase will consume almost 40% of the monthly increase.

Medicare Part B premiums in 2026

Medicare Part B pays for doctor visits, outpatient care and some home health care. When enrolled, you pay both a deductible and a monthly premium. For 2026, the premium is currently projected to rise 11.6% to $206.50, up $21.50 from $185.00 in 2025.

The Part B deductible is projected to be $288.00 in 2026. That would be a $31.00 increase over the 2025 amount of $257.00. On a percentage basis, it's an increase of 11.2%, in line with the estimated increase of the Part B premium.

Understanding Medicare Part D premiums

Unlike Part B, there isn't a single "standard" Part D premium as it varies by plan. However, the average monthly Part D premium has been relatively stable due to a premium stabilization demonstration that was put in place as part of the Inflation Reduction Act(IRA). The continuation of this demonstration for 2026 is a key factor in keeping Part D costs down.

The premium stabilization provision of the IRA limits the amount of the higher costs of Part D drug coverage that plan sponsors can pass on to Medicare enrollees through premium increases. The IRA caps the annual base beneficiary premium (BBP) growth at 6% in 2025. The cap is enforced through increased Medicare subsidies paid directly to plan sponsors.

Annual deductible: The standard Part D deductible is projected to increase to $615 in 2026, up from $590 in 2025.

Out-of-pocket spending cap: A positive change coming in 2026 is the annual out-of-pocket spending cap for prescription drugs under Part D, which will rise to $2,100. This is an increase from the $2,000 limit in 2025. Once beneficiaries reach this cap, they will no longer pay out-of-pocket costs for covered prescription drugs for the remainder of the year.

The value of tracking the projected premiums

Medicare open enrollment runs from October 15 to December 7 annually. During this period, you can switch from original Medicare to a Medicare Advantage plan, or vice versa. You can also choose a new Advantage plan or Medicare Part D prescription drug coverage.

To get the most from your plan, it’s important to understand your out-of-pocket costs for premiums, which will vary depending on your plan and income. For instance, you could also owe a monthly surcharge on Medicare Part B and Part D premiums based on an income-related monthly adjustment amount (IRMAA).

Your IRMAA liability for 2026 will be based on the MAGI shown on your 2024 return. While you can't do anything to change your 2024 tax return, you can look over your finances to see if you are in danger of paying the IRMMA in 2027, which will be based on your yet-to-be-filed 2025 tax return.

Income planning can go a long way in limiting your exposure to the surcharge. For instance, a well-timed Roth conversion can reduce your taxable income and eliminate required minimum distributions (RMD).

The Centers for Medicare & Medicaid Services (CMS) has started releasing information for plan year 2026. In the lead-up to the release of the new premium and deductible amounts, the CMS has adopted some new rules and updated existing numbers in preparation for the open enrollment season that begins in October.

Check out these Nine Medicare Changes Coming in 2026 and check back periodically; I will be adding to the list as more information becomes available.

Projections for Medicare Part B and Part D premiums for 2026 are primarily derived from the annual Medicare Trustees Report. While the final figures are usually announced by CMS in October of the preceding year (so, October 2025 for 2026 premiums), the Trustees Report provides strong estimates.

Related Content

• Medicare Premiums 2026: IRMAA Brackets and Surcharges for Parts B and D
• Prior Authorization Coming to Traditional Medicare Starting in 2026
• Humana to Cut Prior Authorizations for Medicare Advantage Plans by 2026
• Nine Changes Coming to Medicare in 2026
• Four Proposed Changes to Medicare in the One Big Beautiful Bill Act — and What Ended Up in the Signed Bill

While there are federal programs in place to help retirees manage these costs, additional charges can be triggered if your income exceeds a certain threshold. A prime example is Medicare's income-related monthly adjustment amount (IRMAA).

Who gets hit with IRMAA?

IRMAA is a surcharge or tax applied to beneficiaries whose modified adjusted gross income (MAGI) exceeds a certain amount. It was passed back in 2003 as part of the Medicare Modernization Act as a way to offset revenue losses and costs.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

To calculate IRMAA, the Social Security Administration uses the income reported on your income tax returns filed two years prior.

For example, for 2025 the surcharge will be added to premiums for single filers who made more than $106,000, or $212,000 for joint filers, in 2023.

While this tax helps fund and preserve the program, it has the potential to double or triple monthly premiums for higher-income retirees.

For example, the standard monthly premium for Medicare Part B is currently $185. However, beneficiaries subject to IRMAA could pay more than $628 per month.

Medicare.gov

If you're unaware of this tax and exceed the income threshold, your retirement savings are at risk of eroding quickly.

Two ways to deal with IRMAA

The good news is that, with proper planning, you may be able to reposition your income to stay below the threshold and avoid the tax. And if you've already been charged, you might have a case for appealing it.

1. File an appeal

The SSA allows Medicare beneficiaries to appeal the IRMAA surcharge if their income has dropped due to a life-altering event. The most common qualifying event is a loss of income due to retirement or other job changes.

The death of a spouse, divorce or annulment, marriage, loss of pension income or receiving an employer-settlement payment may also qualify you for an appeal.

To file an appeal, you'll need to complete Form SSA-44, which can be found on the administration's website or at a local SSA office.

You'll need to provide documentation to support your appeal, such as a retirement letter or pension-reduction statement, so make sure you have those documents ready to file with your request.

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Once the form is submitted, keep in mind that it may take a few weeks to process your request. In the meantime, continue paying the IRMAA surcharge to avoid any penalties or disruptions in coverage until your appeal is approved.

If you believe you're being charged IRMAA incorrectly, you can request a correction of the tax information being used and provide the IRS with updated documentation showing your current income.

2. Manage your income

You may also be able to strategically position your income to avoid the IRMAA surcharge altogether. Utilizing full or partial Roth conversions, life insurance policies that have a cash value, health savings accounts, annuities, reverse mortgages or even home equity lines of credit can also help keep your MAGI below the threshold.

It's important to note that capital gains, selling investments from a taxable account, and taking required minimum distributions will also count toward IRMAA, or push you into a higher IRMAA bracket, so plan accordingly.

The bottom line

Managing and eliminating every cost in retirement is tedious but crucial to ensuring you can live out your golden years in the way you intended. If you haven't, take the time now to start planning.

If you're retired and feel you've been hit with an IRMAA surcharge incorrectly or are dealing with other issues that may affect your financial well-being, reach out to a trusted professional.

Related Content

• 9 Things You Must Know About Medicare's Income-Related Monthly Adjustment Amount (IRMAA) Surcharges
• IRMAA Could Have Surprised This Retiree: What You Can Learn From Her Experience
• How a Roth Conversion Can Spare You From Medicare's IRMAA and Taxes
• Three Ways to Help Create Financial Stability for a Widow
• Six Medicare Changes Coming in 2026

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

That's because this somewhat complex task involves projecting expenses around unknown future health problems, while debating the merits of Medicare Supplements (aka Medigap) vs Medicare Advantage or comparing health care exchange policies if you aren't yet eligible for Medicare.

Avoiding or postponing this task can lead to the tendency to underestimate retirement health care expenses.

A Jackson study found that nearly two-thirds of pre-retiree investors underestimate their expected health care retirement costs and responded that they anticipate health care expenses significantly below the retirement average of $8,600 a year per person.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

Health care costs vary in retirement based on when you retire, how healthy you are, how long you are likely to live and health care price inflation.

In this article, you'll learn what health care expenses you might expect in retirement and how to proactively plan for them.

Retirement health care expenses

You can divide retirement health care expenses into these five common categories:

• Premiums. Monthly cost for the coverage you select
• Deductibles. The amount you pay upfront for certain services before coverage kicks in
• Cost-sharing or copays. Costs for doctor's visits, medical procedures, lab tests and prescriptions that you pay a portion of
• Out-of-pocket costs. Costs for doctor's visits, medical procedures, lab tests and prescriptions that aren't covered by your insurance
• Long-term care expenses. Costs for assisted living, nursing home care and home health aides, which are not covered by Medicare

Medicare eligibility begins at 65. According to a study from Milliman, the earlier you retire before Medicare eligibility, the more your health care costs will increase. Conversely, the longer you wait to retire after age 65, the more your costs decrease.

Living even five years longer than your targeted life expectancy will increase your health care spending by 42%.

Because health care costs tend to rise faster than general inflation, your health care spending is likely to increase at a higher rate than you may expect over a 25- to 30-year retirement.

Retiring before age 65 means you'll have to pay more of your own health care expenses because you won't be covered by employer health care insurance. You'll either need to continue your employer-based coverage — potentially at your own cost — or sign up at HealthCare.gov, also known as Obamacare and the Affordable Care Act (ACA).

Costs on the exchange depend on your income, where you live and the type of coverage you sign up for and include a combination of premiums, deductibles, copays and out-of-pocket costs.

Depending on your income, you may qualify for a government subsidy for your premium. If you don't, premiums for an individual insurance policy on the ACA Marketplace run on average between $800 and $1,200 a month for someone age 62 to 65.

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Once you are on Medicare, you'll have ongoing premiums that stack up differently depending on whether you choose a Medicare Advantage plan, which covers your hospitalization, doctor's visits, prescriptions, lab work and outpatient care, or whether you go with a Medicare Supplement plan that supplements traditional Medicare.

How to plan for health care expenses in retirement

Regardless of whether you're covered by Medicare or the ACA, yearly average medical costs in retirement — excluding long-term care — average $8,600 a year, according to the Jackson study mentioned above.

Use this as a baseline for your first year of retirement and bump it up annually to cover inflation and the higher cost of health care inflation.

A good potential rule of thumb would be to add 5% a year to the $8,600 figure and stick that in your budget.

The table below shows how health care costs, excluding long-term care, are likely to rise every five years after retirement.

Of course, your costs are likely to vary, perhaps even significantly, should you have a chronic or life-threatening health condition, but budgeting in this way will at least keep you in the neighborhood where your costs are likely to end up.

Source: SEC Compound Interest Calculator

A final word

Health care expenses could be a major factor in retirement income and expense planning.

By understanding what your health care costs are likely to be in retirement and factoring those costs into your retirement expense budget, you're likely to create a more realistic idea of your retirement expenses and avoid unexpected, budget-busting expenses.

Lucas Cox, CFP®, CKA®, RICP®, NSSA® is a financial advisor at The Lighthouse Planning Company in Russellville, Arkansas, and a licensed insurance professional. AR insurance license #16128263. Investment advisory services offered through CreativeOne Wealth, LLC, a registered investment adviser. Confident Financial Solutions and CreativeOne Wealth are unaffiliated companies. We are not affiliated with or endorsed by Medicare or any government agency, and do not provide tax or legal advice.

This material is for informational purposes only and should not be construed as a recommendation or advice for your particular situation. Insurance product guarantees are backed by the financial strength and claims-paying ability of the issuing company.

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• Planning for Health Care Costs in Retirement: A Comprehensive Guide
• How to Age-Proof Your Retirement Plan

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Prior authorizations (PAs) are tools widely used by private insurance companies to contain costs. In addition to making sure your plan will cover the service, medication or equipment, PAs are also a way the health plan can decide if the care is medically necessary, safe, and cost effective. In 2023, Humana had an average of 3.1 prior authorization requests per MA enrollee and a denial rate of 3.5%, according to an analyzation of prior authorization data by KFF.

Humana joined other signatories in a pledge to streamline prior authorization processes for Medicare Advantage, Medicaid Managed Care, Health Insurance Marketplace®, and commercial plans, covering nearly 80% of Americans. This commitment was made at a Health and Human Services (HHS) roundtable attended by Secretary Kennedy and CMS Administrator Dr. Oz.

“Today’s healthcare system is too complex, frustrating, and difficult to navigate, and we must do better,” said Jim Rechtin, President and CEO of Humana in a press release.

“We are committed to reducing prior authorization requirements and making this process faster and more seamless to better support patients, caregivers, physicians, and healthcare organizations,” he added.

UnitedHealthcare, the largest provider of Medicare Advantage plans, continues to require prior authorization for certain services and procedures. However, it does not require it for emergency or urgent care.

How Humana will trim prior authorization wait times

Any way you slice it, prior authorizations are an inconvenience for both patients and doctors, that can slow you down from getting the care or assistance you need. If Humana sees through plans to streamline the process, it could lead to less waiting for patients and less paperwork for doctor's offices.

Another win for consumers is Humana's plan for increased transparency around the prior authorization process. Humana will begin publicly reporting its prior authorization metrics in 2026. This will include data on prior authorization requests approved, denied, and approved after appeal, as well as the average time between submission and decision.

Here is what Humana is planning to do to reduce wait times and the overall burden of prior authorizations:

• Eliminating one-third of prior authorizations for outpatient services: By January 1, 2026, Humana will remove prior authorization requirements for approximately one-third of outpatient services. This specifically includes diagnostic services such as colonoscopies, transthoracic echocardiograms, and select CT scans and MRIs.
• Focus on electronic submissions and interoperability: Humana is working to support greater adoption of electronic prior authorization requests (ePA) over methods like fax or phone. Their goal is to modernize and streamline the ePA process to expedite approvals and create a more seamless experience for patients and providers.
• Faster approval times for electronic requests: Humana commits to providing a decision within one business day for at least 95% of all complete electronic prior authorization requests by January 1, 2026. The company currently provides a decision within one business day for over 85% of outpatient procedures.
• National "Gold Card" program: In 2026, Humana will launch a new "gold card" program. This program will waive prior authorization requirements for certain items and services for providers who have a proven track record of submitting coverage requests that meet medical criteria and deliver high-quality care with consistent outcomes for Humana members.

How prior authorizations can impact physicians and patient care

Physicians offices are a nexus point for prior authorizations between patients and insurers and it takes a toll. A survey of physicians by the American Medical Association revealed how prior authorizations impact patient care.

On average, a physician's office completes 39 prior authorizations per week that take at least 13 office hours to complete; 40% of the physicians surveyed have staff who work exclusively on PAs. Only 1 in 5 physicians appeal a denial, with over half saying the small number is because they lack the resources to file appeals (57%).

While eliminating prior authorization requirements by one-third is a significant reduction, the impact will depend on which services are no longer subject to prior authorization. Humana has specified certain diagnostic services like colonoscopies, echocardiograms, CT scans, and MRIs, which is a good start.

This move comes amid increasing scrutiny from Congress and the Centers for Medicare & Medicaid Services (CMS) and HHS, regarding prior authorization practices in Medicare Advantage. Humana's proactive approach may be a response to this pressure and potential federal regulations

At the same time, Medicare recently announced it will implement prior authorization requirements for certain traditional fee-for-service Medicare services in six states starting next year.

Related Content

• Medicare Advantage Plans: Prior Authorization Denial Rates
• Six Medicare Changes Coming in 2026
• Prior Authorization Coming to Traditional Medicare Starting in 2026

I'm not kidding. By leveraging your existing client base and offering them Medicare strategies, you can help create a predictable, long-term income source through renewals. This isn't me preaching, but speaking from experience.

I have asked many financial professionals, "Will you get rich overnight offering Medicare to your clients?" The answer is no.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

But can you build wealth over time? Absolutely — with the right strategy and patience, it's within reach.

Advisors Excel launched its Medicare Solutions division in 2019. Fast-forward just six years, and the fruits of our labor are paying big dividends for hundreds of producers.

In 2024, for instance, AE producers earned more than $15 million in commissions and renewals solely from Medicare.

What's keeping you from getting in on the action? The opportunity to help several of your clients and even prospects can be limitless.

The opportunity with Medicare

You've likely heard the statistic that over 11,000 Americans will turn 65 every day this year — and every one of these individuals needs to make a Medicare decision. Based on those numbers, the opportunity to help several of your clients and even prospects can be limitless.

What makes Medicare sales particularly attractive for financial professionals is the nature of renewal commissions.

Unlike many types of insurance policies that require clients to reapply annually or every few years, Medicare Advantage and Medicare Supplement, or Medigap, policies often offer ongoing renewal commissions as long as the client remains enrolled in the plan.

By selling Medicare to your existing clients, you can build a recurring revenue stream, creating the potential for substantial financial growth over time.

A value-add for existing clients

If you already have a client base that trusts you for other financial products, offering Medicare can be a natural extension of your services.

The key is to approach the conversation in a way that emphasizes the value it provides to your clients rather than simply focusing on making a sale.

One way to do this is to offer a "Medicare Checkup" or "Medicare Review" service, where you schedule regular meetings with clients to help ensure they're in the right plan based on any changes in their health or financial situation.

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Doing this year after year offers the opportunity to create a strong client-retention strategy while simultaneously building a renewal stream.

Another way to increase awareness with your current clients and prospects is to hold a "Medicare 101" seminar.

AE Medicare Solutions has all the tools to help with this; we can provide the presentation deck, speaker notes and guidance on which trusted vendors can help get the invite out.

So again, what's keeping you from getting in on the action?

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For every Medicare rule, there was an exception. The plans changed every year and varied from state to state. Sitting in an office in Virginia, where I can see across the river to D.C. and Maryland, this is an issue.

Not to mention the complex interplay between the various federal employee health benefits for retirees and Medicare.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

The "Medicare and You" handbook that gets updated every year and explains the system runs 125 pages. I have come to believe that to truly master Medicare advice, you must devote all your time to it.

We provide general advice and incorporate costs into financial and income plans but have developed relationships with Medicare consultants to provide a more in-depth service for our clients.

This article is meant to help you gain a general understanding of how the system works and what to do, and when, while transitioning to Medicare.

Medicare Part A: What is it?

Part A is hospital insurance. It is most commonly used for inpatient hospital stays. While it does provide for limited skilled nursing facility care, there are limits during each benefit period. This is not a good solution to plan for long-term-care expenses.

It also covers certain hospice expenses for those with life expectancies of less than six months.

What does it cost?

For most people, it is free. The qualification rules are the same as they are for Social Security retirement benefits. You have to have paid in for 40 quarters or 10 years, or be married to someone who has.

If you do not qualify, premiums are quite expensive and should be figured into your financial plan.

When should you enroll?

Assuming you qualify, you should enroll in the plan at 65, regardless of whether you're still working. Because the coverage doesn't cost anything, there is little downside to enrolling.

The most common exception to this is if you are currently contributing to a health savings account (HSA).

Medicare Part B: What is it?

Part B is medical insurance or physician coverage. Think of Part A as inpatient hospital care and Part B as outpatient medical care. Part A and Part B together are known as "original Medicare."

What does it cost?

A lot, but maybe less than what you pay privately. Medicare Part B premiums are based on your income.

More specifically, they are based on your modified adjusted gross income (MAGI) from two years prior. For example, your 2025 premium is based on your gross income from 2023.

You may also have to pay a surcharge known as the income-related monthly adjustment amount (IRMAA) if your income exceeds a certain amount. Here is the schedule of costs, which is based on your income two years ago:

Source: Medicare.gov

We do a lot of planning around IRMAA brackets for our clients. Often, we are doing Roth conversions up to these limits, or adjusting income sources to stay under the next premium jump.

We rely on both financial planning software and tax planning software to do this. You can access a free version of that planning software online.

When should you enroll?

This is much more complicated than the Part A decision because of the cost. However, in most situations you'll sign up for both Part B and Part D at the same time, so I'll cover both here.

If you're already retired: You should enroll during your initial enrollment period (IEP), which is a seven-month period beginning three months before your 65^th birthday.

While Medicare Part B can get expensive, if you retired before 65 and have a marketplace plan, it's likely cheaper than what you currently have.

If you're still working: You'll have to compare Part B and Part D (prescription drug coverage) to the coverage you currently have.

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So long as you have a "creditable" plan, you will not be penalized for delaying enrollment until you retire. In my career, I have come across only one employer plan that was not creditable.

Technically, you have an eight-month window to enroll for Part B and a 63-day period for Part D, but if you are retiring, you'll want to enroll sooner rather than later to avoid any gaps in coverage.

Medicare Part D: What is it?

Prescription drug coverage. Unlike original Medicare, Part D coverage is offered by private insurers, and you'll want to pick the plan that suits your prescription drug needs and your budget.

What does it cost?

The plans vary in cost. There is an added wrinkle here: Medicare Part D also has income adjustments, but they are not nearly as punitive as those for Part B. Those added costs are shown below:

Source: Medicare.gov

Medicare Advantage

You're probably wondering where the missing letter C is. Medicare Part C is also known as Medicare Advantage.

Think of this more like a prix fixe menu. Medicare Advantage plans are offered by private insurance companies and typically include your hospital, physician and drug coverage in one plan.

If you've ever watched The Price Is Right, you've probably seen enough Medicare Advantage commercials to last a lifetime.

Related Content

• Medicare Premiums 2026: Projected IRMAA Brackets and Surcharges for Parts B and D
• How to Appeal the IRMAA for Medicare Parts B and D
• Five Medicare Changes Coming in 2026
• Is Medicare a Good Reason to Wait Until 65 to Retire?
• Should You Still Wait Until 70 to Claim Social Security?

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

More on taxes and nontaxable income, from the Kiplinger team:

• Types of Income the IRS Doesn't Tax
• Seven Types of Tax-Free Income
• New 'No Tax on Tips' Bill Approved
• States That Don't Tax Pension Income

More on Medicare from the Kiplinger team:

• What’s the Best Medigap Plan?
• What You Will Pay for Medicare in 2025
• What Doesn’t Medicare Cover? Things You Should Know

This change will go into effect on January 1, 2026, when the CMS starts to "test ways to provide an improved and expedited prior authorization process relative to Original Medicare’s existing processes, helping patients and providers avoid unnecessary or inappropriate care and safeguarding federal taxpayer dollars," per a CMS press release. The model being implemented in 2026 builds on a change to prior authorizations rolled out by the Department of Health and Human Services (HHS) and CMS on June 23, 2025.

Six states — New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington — will begin using the Wasteful and Inappropriate Service Reduction (WISeR) Model to perform prior authorization evaluations, CMS announced in a Federal Register notice. This will apply to 17 services that CMS says "are vulnerable to fraud, waste and abuse."

The Trump Administration's continuing fight against fraud, waste and abuse

The beginning of the second Trump administration brought the inception of DOGE and its tech-savvy staff tasked with finding fraud, waste, and abuse in government, including Medicare and Social Security.

HHS and CMS appear to be continuing DOGE's mission with the introduction of an agreement among private insurance companies to "pledge to streamline and improve the prior authorization processes for Medicare Advantage, Medicaid Managed Care, Health Insurance Marketplace and commercial plans covering nearly eight out of 10 Americans." Humana recently announced a plan to reduce prior authorizations by one-third and reduce wait times for others.

The introduction of the short list of Medicare services for prior authorization will test how well technologies such as machine learning and AI can streamline the prior authorization process. “CMS is committed to crushing fraud, waste, and abuse, and the WISeR Model will help root out waste in Original Medicare,” said CMS Administrator Dr. Mehmet Oz.

As part of the goal of rooting out waste and fraud, the Justice Department conducted a 2025 National Health Care Fraud Takedown. Results were released on June 30, 2025, and included charges against more than 300 defendants who were accused of a range of health care fraud schemes.

One particular indictment can provide some insight as to how or why some of the procedures/services were selected for the list. In one particular case, three defendants in Arizona allegedly conspired to give elderly Medicare recipients unnecessary skin grafts, known as "amniotic wound allografts." The defendants allegedly pocketed millions of dollars and billed for "more than over $1 billion in false and fraudulent claims to Medicare and other health benefit providers for these medically unnecessary allografts." To make matters worse, according to the indictment, the defendants are alleged to have targeted Medicare beneficiaries, many of whom were terminally ill in hospice care.

The WISeR Model and how the program will work

The WISeR Model (Wasteful and Inappropriate Service Reduction) is meant to test the use of enhanced technologies, such as AI and machine learning, to decrease "certain wasteful or low-value services shown to have little to no clinical, evidence-based benefit." CMS chooses services that "have been identified as particularly vulnerable to fraud, waste, and abuse, or inappropriate use."

Medicare beneficiaries should know that AI will not be determining if a procedure is approved or denied; a human being will be reviewing the information. "...while technology will support the review process, final decisions that a request for one of the selected services does not meet Medicare coverage requirements will be made by licensed clinicians, not machines," CMS explained.

The use of the model will not alter Medicare coverage or payment rules. While other services may be added later to the model, it explicitly "excludes inpatient-only services, emergency services, and services that would pose a substantial risk to patients if delayed," according to the CMS fact sheet.

Providers and suppliers of the services to be included in the prior review process will be allowed to either submit a prior authorization request for the model’s selected items and services or go through a post-service/pre-payment medical review.

17 services to be subject to prior authorization

Here is the list of services that will go through a prior authorization process in New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington, between January 1, 2026, and December 31, 2031.

• Electrical nerve stimulators
• Sacral nerve stimulation for urinary incontinence
• Phrenic nerve stimulator
• Deep brain stimulation for essential tremor and Parkinson’s disease
• Vagus nerve stimulation
• Induced lesions of nerve tracts
• Epidural steroid injections for pain management
  • excluding facet joint injections
• Percutaneous vertebral augmentation (PVA) for vertebral compression fracture
• Cervical fusion
• Arthroscopic lavage and arthroscopic debridement for the osteoarthritic knee
• Hypoglossal nerve stimulation for obstructive sleep apnea
• Incontinence control devices
• Diagnosis and treatment of impotence
• Percutaneous image-guided lumbar decompression for spinal stenosis
• Skin and Tissue Substitutes
  • Application of bioengineered skin substitutes to lower extremity chronic non-healing wounds
  • Wound Application of cellular and/or tissue based products (CTPs), lower extremities

Critics come from both political persuasions

So far, there has been criticism from both the left and right, and for similar reasons.

"It's baffling how in one breath the administration is trying to take a victory lap on insurers streamlining prior authorization in Medicare Advantage, and in the other instituting the same delay tactics in traditional Medicare," Rep. Suzan DelBene (D-Wash.), whose state will be testing out the new model, told MedPage Today.

From the right, Michael Baker, director of healthcare policy at the American Action Forum, also hit President Trump on his promise to reduce prior authorizations and added a dose of skepticism about AI's ability to help the situation.

"Adding a duplicative third party to the already established Medicare Administrative Contractor network, particularly one that may be using untested artificial intelligence, machine learning, or algorithmic decision logic, may only increase the overall administrative burden and delay beneficiary care," Baker said to MedPage in an email.

How common are prior authorizations in Medicare and Medicare Advantage?

As it stands, traditional Medicare requires prior authorization for a substantially smaller set of procedures and services than most Medicare Advantage plans. Medicare services that typically require prior authorization include certain outpatient hospital services, non-emergency ambulance transport, and durable medical equipment. For 2023, just under 400,000 prior authorization reviews for traditional Medicare beneficiaries were submitted to CMS.

The situation is very different for Medicare Advantage plans. While they must cover all medically necessary services that Original Medicare covers, for some services, MA plans may use their own coverage criteria to determine medical necessity. Almost all Medicare Advantage enrollees — 99% according to KKF — must obtain prior authorization for some services. These are typically higher-cost services, such as inpatient hospital stays, skilled nursing facility stays and chemotherapy.

Related Content

• Medicare Advantage Plans: Prior Authorization Denial Rates
• Four Proposed Changes to Medicare in the One Big Beautiful Bill Act — and What Ended Up in the Signed Bill
• Seven Medicare Changes Coming in 2026
• Medicare Premiums 2026: Projected IRMAA Brackets and Surcharges for Parts B and D

Medicare plays a crucial role in covering the healthcare costs for the 68.5 million beneficiaries, of whom 90.1% are 65 and older, according to the Medicare Monthly Enrollment data for February 2025.

Misinformation about Medicare is all around, from social media posts to advice from well-meaning coworkers. This tendency, combined with Medicare's complex initial enrollment rules and the stress often associated with the years leading up to retirement, can lead to costly mistakes and unexpected expenses.

Don't believe these five Medicare myths listed below.

Myth #1- Medicare is free

Indeed, most people don’t pay a premium for Part A coverage, which is sometimes referred to as “premium-free Part A.” But that is the only part of Medicare that doesn't have a premium if you qualify.

Part A. You will not pay for Part A as long as you are 65 or older and you or your current or former spouse paid Medicare taxes while working for at least 10 years; otherwise, you will pay a premium for this coverage. In 2025, Medicare beneficiaries have a $1,676 Part A deductible.

Part B. Medicare Part B has a base monthly premium of $185 for most people. High earners pay an income-related monthly adjustment amount (IRMAA). For these beneficiaries, total Monthly Part B premiums, including the surcharge, will range from $259.00 to $628.90. These surcharges apply to enrollees in Original Medicare and Medicare Advantage plans.

PART D. For the first 40 or so years of Medicare, there was no outpatient prescription drug coverage. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) added a voluntary prescription drug benefit, Medicare Part D.

If you have Original Medicare and you want prescription drug coverage, you will need to enroll in a Part D plan. The majority of Medicare Advantage (MA) plans include Part D coverage, providing both medical and prescription drug benefits in one plan. However, if yours does not, you'll need to buy a stand-alone Part D policy.

A surcharge for high earners also applies to your Medicare drug coverage (Part D). In 2025, you’ll pay an extra amount in addition to your plan premium if your 2023 AGI is above $106,000 if you are single, or $212,000 if you’re married and file jointly. That surcharge ranges from $13.70 to $85.80.

Medicare Advantage premiums. Some MA plans charge an additional premium. Depending on the plan you choose, the monthly premium, in addition to Part B, will vary. The average monthly premium is $17.00 in 2025, down $1.23 from $18.23 in 2024.

Myth #2 You can enroll in Medicare at any point after you turn 65

The Initial Enrollment Period for Medicare (IEP) is a seven-month window around your 65th birthday, the three months before, the month of, and the three months after. Most people sign up for Medicare in this window.

It’s important to sign up for Medicare coverage during your IEP, unless you have other coverage. Failure to sign up during this time can result in gaps in your medical coverage and late enrollment penalties.

Medicare General Enrollment Period (GEP). If you missed your IEP, you can still enroll in Original Medicare; you will pay late enrollment penalties that are based on how long you waited to file after you turned 65 or lost your employer-provided health insurance. This enrollment period runs from January 1 through March 31 each year.

Be aware that the General Enrollment Period only allows you to enroll in Original Medicare. If you want to enroll in an MA plan, you’ll have to wait for the Annual Enrollment Period (AEP) that is discussed in more detail below.

If you first enroll in Original Medicare during the GEP, you have a Special Enrollment Period (SEP) to join a Part D plan starting the date you submit your application for premium Part A or Part B coverage. The SEP lasts for the first two months of enrollment in premium Part A or Part B.

Part B late enrollment penalty. This penalty adds an extra 10% to your monthly premium for each year you could have signed up for Part B, but didn’t.

Part D late enrollment penalty. You’ll pay an extra 1% for each month, or 12% a year, if you either: don’t join a Medicare Part D drug plan when you first get Medicare, or go 63 days or more without creditable drug coverage.

However, you may be able to avoid penalties if you have insurance through your employer at 65 and enroll in Medicare as soon as you lose this coverage. Otherwise, the only way to avoid these penalties is to see if you qualify for a Special Enrollment Period (SEP).

Medicare Supplement (Medigap) Open Enrollment Period. While there is no penalty for not signing up for a Medigap policy during your IEP, you will lose out on enrolling without having to undergo underwriting. The underwriting process can result in higher premiums, as it takes into account your health and lifestyle.

Once you are enrolled in Medicare Parts A and B, you will also qualify for a 6-month open enrollment period for Medigap plans. This starts with your Part B effective date and is a one-time election period. You can enroll in any Medigap plan that you like, with no health questions asked.

What’s most important to know about this enrollment period is that it happens only once for most people. However, states can choose to establish Medigap protections that go further than the minimum federal standards. Check with your SHIP (State Health Insurance Assistance Program) to find out if your state gives you more rights and opportunities to buy Medigap policies outside of the six-month window without underwriting.

Myth #3- You will be automatically enrolled in Medicare when you turn 65

This myth has a kernel of truth to it. If you have already claimed Social Security benefits at least four months before becoming eligible for Medicare, you will be automatically enrolled in Parts A and B. If not, you'll be responsible for applying within the seven-month IEP or later if you have employer-provided health insurance.

If you don't apply within the required timeframe, you'll be subject to those steep late enrollment penalties mentioned above.

Myth #4- You can't change your Medicare plan after you sign up

If there is one thing you can be sure of, you will have the opportunity to change your plan every year. In some cases, you will have multiple chances to change your coverage both inside and outside of the enrollment periods that occur annually.

Annual Open Enrollment Period. This happens every year from October 15 to December 7. During this time, you can switch from your Original Medicare plan to a Medicare Advantage plan or vice versa. If you have a Medicare Advantage plan, you can switch to a different Medicare Advantage plan. And, you can also choose a new Part D plan. If you switch your plan during this window, your new coverage will take effect on January 1 of the following year. If you make no changes, your current selections will be automatically renewed.

The Medicare Advantage Open Enrollment Period. This enrollment period happens annually from January 1 through March 31. If you are enrolled in a Medicare Advantage plan and, for any reason, you don’t like it, you can disenroll from your current plan and either return to Original Medicare and elect a Part D drug plan or switch to a different MA plan.

Medicare Special Enrollment Period (SEP). A Special Enrollment Period (SEP) is a time outside of the regular enrollment periods during which Medicare beneficiaries have an opportunity to enroll in or make changes to their Medicare coverage. SEPs are available to individuals who experience certain qualifying life events or meet specific criteria. You can make changes to your Medicare Advantage or Part D prescription drug coverage when certain events happen in your life. Those events include moving or losing other insurance coverage, such as your or your spouse's employer-provided coverage.

Read Missed Medicare Open Enrollment? Here Are Your Options to get more details about what types of life events qualify for the Special Enrollment Period.

Myth #5- Medicare is the only health insurance policy you need in retirement

Original Medicare doesn’t cover everything; the coverage gap is often called the “doughnut hole.” Part B pays for only 80% of doctors’ visits and other outpatient services. In addition, Medicare doesn’t cover supplemental services such as dental care, eye appointments, or hearing aids. You have two options to deal with your uncovered expenses. You can purchase Medigap insurance to complement your Original Medicare insurance or enroll in a Medicare Advantage plan.

Read What’s the Best Medigap Plan? to find out more about the 10 different Medigap plans you can choose from.

Set your calendar, enrollment missteps can be expensive

Medicare plays an important part in covering most people's healthcare costs during their retirement. If you overlook your initial enrollment period, you will pay late enrollment penalties every month you pay your Medicare premiums.

You can also lose money on higher-than-necessary premiums or out-of-pocket costs if you are enrolled in a Medicare Advantage plan and don't shop around during your annual enrollment periods. While MA plans must cover everything traditional Medicare does, participants in MA plans are restricted to networks of providers and hospitals that can change every plan year.

For instance, you could be left paying out-of-network fees to see your preferred health care provider if they are no longer in your network.

Related Content

• Five Medicare Changes Coming in 2026
• Medicare Premiums 2026: Projected IRMAA Brackets and Surcharges for Parts B and D
• What You Will Pay for Medicare in 2025
• Medicare Premiums 2025: IRMAA Brackets and Surcharges for Parts B and D

In a press release issued Monday, CMS said it had identified suspicious activity related to the unauthorized creation of certain beneficiary online accounts using personal information obtained from unknown external sources.

CMS reported that roughly 103,000 beneficiaries might have been affected by the recent data breach. The agency is currently mailing notifications to the individuals, informing them of the incident and outlining steps they can take to protect their personal information.

How the Medicare breach happened

On May 2, 2025, CMS’s 1-800-MEDICARE call center began receiving inquiries from beneficiaries regarding letters they received confirming Medicare.gov accounts had been created in their names, the agency said. However, the beneficiaries hadn't created the accounts.

CMS launched an investigation and found malicious actors had fraudulently created new accounts between 2023 and 2025 using valid beneficiary information, including Medicare Beneficiary Identifiers (MBI), coverage start date, last name, date of birth, and zip code.

Once these unauthorized accounts were established, bad actors may have accessed additional beneficiary data, including the following:

-Provider information
-Mailing address
-Dates of service
-Diagnosis codes
-Services received
-Plan premium details

What CMS is doing

CMS said it is not aware of any reports of identity fraud or misuse of the information due to this fraudulent activity, but said out of an abundance of caution, it is taking steps to safeguard beneficiaries' information, including:

-Deactivating all fraudulently created Medicare.gov accounts

-Disabling the ability to create new Medicare.gov accounts from foreign IP addresses to prevent further exploitation

-Continuing to monitor claims data for any suspicious activity and replacing MBIs for affected individuals

-Mailing new Medicare cards with new MBIs to beneficiaries as needed

What you can do

If you receive a letter in the mail from CMS, review your Medicare Summary Notices and Explanation of Benefits and see if you spot any unfamiliar charges or services. Report any suspicious activity to 1-800-MEDICARE (1-800-633-4227) or the Office of Inspector General at oig.hhs.gov/fraud/report-fraud/. It's also important to obtain a free annual credit report through www.annualcreditreport.com or by calling 1-877-322-8228.

If you are a victim of identity theft or fraud, file reports with local law enforcement and/or the Federal Trade Commission by phone at 1-877-IDTHEFT (1-877-438-4338) or online at www.ftc.gov/idtheft if any identity theft concerns arise.

Why hackers go after Medicare

Medicare is a prime target for hackers because of the information they can steal to use for identity theft and financial gain. With stolen Medicare information, bad actors can file fake claims for health care services, medicine and supplies, which cost the government and individuals money.

Medicare information includes a lot of personal identifying data such as names, addresses, birthdates and Social Security numbers. Hackers can use this information to steal a person’s identity, open credit cards in their name, hack into their bank accounts, or take other actions for financial gain. They can even use Medicare information to commit insurance fraud.

The best way to protect your Medicare number is to treat it like a credit card and be careful with whom you share it. Make sure to regularly review your statements, and if you spot any suspicious activity, report it immediately.

Related content

• Five Medicare Changes Coming in 2026
• 19 Things Medicare Gives You for Free
• Four Changes to Medicare in the One Big Beautiful Bill Act

Essentially, those who pay the IRMAA are paying a greater share of their actual Medicare Part B and D premiums. As it stands, the government pays a substantial portion — about 75% — of the Part B premium for most beneficiaries who pay, on average, the remaining 25%. For 2024, premiums from Parts B and D covered 23% of Medicare program costs, according to the 2025 Trustees' Report.

If you are a higher-income beneficiary, you will pay a larger percentage of the total cost of Part B based on income reported on your annual tax return. You'll pay monthly Part B premiums equal to 35%, 50%, 65%, 80%, or 85% of the total cost, depending on your income and subsequent surcharge amount. For 2025, the IRMAA Part B surcharge ranged from $185.00 to $443.90 monthly, or $2,220 to $5,326.80 annually, on top of the base premium of $185.00.

Your additional premium for Part D is a percentage of the national base beneficiary premium, which is $36.78 for 2025. The IRMMA surcharge for Part D 2025 ranged from $13.70 to $85.80 monthly or $164.40 to $1,029.60 annually.

In 2026, the Part B surcharges will cost you anywhere from $81.20 to $487.00 monthly. Part D surcharges are lower and will range from $14.50 to $91.00 every month. This is on top of the basic premiums. For 2026, the Part B premium is $202.90, and the Part D standalone premium is, on average, $46.50.

One of the quirks of the IRMAA is that it is based on your tax returns from two years prior; your 2026 liability will be based on the income shown on your 2024 tax return. Read Medicare Premiums 2026: Projected IRMAA Brackets and Surcharges for Parts B and D to see five income brackets and accompanying surcharges.

Who pays the IRMAA?

IRMAA applies to Medicare beneficiaries whose yearly income exceeds certain thresholds set by the Social Security Administration (SSA). These thresholds or brackets are adjusted annually, except for the fifth bracket: That bracket was added by the Bipartisan Budget Act of 2018 and won't be indexed for inflation until 2028.

The SSA uses the most recent complete federal tax return data to assess your liability for the IRMAA. For 2026, the SSA will look at your 2024 tax return to calculate the surcharge you owe, if any.

If you are liable for the IRMAA surcharge, the SSA will send you an Initial Determination Notice with your premium amount(s) and the reason for the determination. If you have both Medicare Part B and Medicare Part D prescription drug coverage, you'll pay higher premiums for each. If you have only one — Medicare Part B or Medicare prescription drug coverage — you'll pay an income-related monthly adjustment amount only on the benefit you have.

How is the IRMAA calculated?

The SSA uses your income tax information from two years before to determine if you owe an IRMAA. So, for example, whether or not you paid the 2025 IRMAA is based on your 2023 tax return. For 2026, you will need to take a look at your 2024 tax return.

Your IRMAA could change during the year. Sometimes, the IRS only provides information from a return filed three years prior; for 2026 surcharges, that would mean the SSA is using your 2023 tax return and not your 2024 return. If the SSA uses the 2023 tax year data, and you filed a return for tax year 2024 or did not need to file a tax return for tax year 2024, contact the SSA to update their records.

Amended tax returns. If you amend your tax return, and it changes the income used to determine the IRMAA amounts, contact the SSA to report your new MAGI. The SSA will need to see a copy of your amended tax return and the acknowledgment receipt from the IRS. The SSA will then correct or remove your IRMAA amounts where appropriate.

What kind of income can trigger the IRMAA ?

IRMAA is based on your Modified Adjusted Gross Income (MAGI). This typically includes your adjusted gross income (AGI) plus certain tax-exempt interest.

The income that is used for IRMAA is defined by Social Security as being: “Adjusted gross income plus any tax-exempt interest” or everything on lines 2a and 8b of the IRS form 1040.

Here's a look at what counts as IRMAA income:

• Social Security benefits (taxable portion), pension income
• Wages and tips
• Interest
• Alimony
• Dividends
• Rental income
• Capital gains
• Dividends, including municipalities
• Distributions from qualified/tax deferred investments
• Distributions from traditional 401(k)s, 403(b)s, IRA’s, SEP IRAs

Tax-exempt interest and income added back in that determine your MAGI IRMAA income:

• Tax-exempt interest that has been earned or accrued. For instance, municipal bonds, which can be significant for a lot of retirees
• Interest from U.S. savings bonds used for qualifying education expenses
• Income earned abroad that was excluded from gross income
• Non-taxable income from U.S. territories, including: Puerto Rico, Guam, American Samoa and the Northern Mariana Islands

What does NOT count as IRMAA income:

• Distributions from Roth accounts
• Distributions from Health Savings Accounts (HSAs) and 401(k) plans
• Proceeds from life insurance
• Portions of QLAC annuities

Which Medicare parts are affected?

Only Medicare Part B and Part D premiums are subject to the IRMAA surcharge. Medicare Part A hospital insurance is not affected.

If you are expected to pay IRMAA, SSA will notify you that you have a higher Part D premium. That is because Part D insurance plans are managed by private insurers. While you pay insurers directly for your stand-alone Part D plan, you pay the surcharge to the government.

How is the IRMAA paid?

IRMAA surcharges for Part B and Part D are paid separately. Part B IRMAA is automatically added to your monthly premium bill, while the Part D IRMAA must be paid directly to Medicare, not your plan or employer. It’s your responsibility to pay the surcharge even if your employer or a third party, such as a retirement system, pays your Part D plan premiums. You’ll get a bill each month from Medicare for your Part D IRMAA, and you can pay it the same way you pay your Part B premiums if you pay them directly.

If you have your Medicare Part B premiums deducted from your Social Security check, the SSA will also deduct the IRMAA Part B surcharge. If your check does not cover the full amount, you'll have to pay the shortfall directly. There are a few ways to do this.

Here are four direct payment options:

• Online through your secure Medicare account, which is the fastest way to pay. Use this free service to pay by credit card, debit card or from your checking or savings account. Don’t create or use a Pay.gov account to make your Medicare payment. Use your Medicare account to pay your bill
• Sign up for Medicare Easy Pay. With this free service, Medicare automatically deducts your premium payments from your savings or checking account each month. It can take up to six to eight weeks for your automatic deductions to start. You'll need to pay your premiums another way until your automatic deductions start
• Mail your payment to Medicare. Pay by check, money order, credit card, or debit card. Fill out the payment coupon at the bottom of your bill, and include it with your payment. If you’re paying by credit or debit card, be sure to complete and sign the coupon. If you don’t have your payment coupon, write your Medicare Number on the check or money order. If you don’t sign the coupon, Medicare can’t process your payment, and it will be returned to you. Use the return envelope that came with your bill, and mail your Medicare payment coupon and payment to: Medicare Premium Collection Center, PO Box 790355, St. Louis, MO 63179-0355
• Online through your bank’s digital bill payment service

How long do you have to pay the IRMAA?

Fortunately, your IRMAA can change each year based on your income. If your income drops the next year, your IRMAA could be less or disappear altogether. If you had a one-time spike in income, you can look forward to paying less the next year when your income returns to normal.

IRMAA surcharges aren't minimal. In 2025, they can cost up to an additional $6,356.40 annually, or $5.326.80 for Part B and $1,029.60 for Part D. These numbers rise to $6,936 annually, or $5,844 for Part B and $1,092 for Part D, in 2026. Try to consider the income sources you expect to tap in retirement and come up with a distribution/income plan that will limit your exposure to the IRMAA surcharges.

Many married couples need to plan for the possibility of an IRMAA surcharge. When the first spouse dies, the surviving spouse becomes an individual tax filer. That person may well jump several IRMAA tiers in the following years. That’s because the survivor usually receives roughly the same income, but now falls into different income brackets with higher tax rates.

Can you appeal the IRMAA?

If you believe the IRMAA determination is incorrect, or if you've experienced a life-changing event that significantly reduced your income, such as retirement, divorce, or the death of a spouse, you can appeal the decision with the SSA.

Use Form SSA-44 to submit your request along with supporting documentation. If you prefer or need to visit an office in person, appointments are generally required. You can find the phone number for your local office using the Office Locator function on the SSA website or by calling 1-800-772-1313 (TTY 1-800-325-0778) for assistance.

You can get more detailed information by reading How to Appeal the IRMAA for Medicare Parts B and D.

Avoiding the IRMAA takes planning

If you are enrolled in Medicare and your income exceeds the income limits, you're going to pay more for your Medicare Part B and Part D premiums; the higher your MAGI, the higher the IRMAA surcharge.

The IRMAA can sneak up on you if you aren't careful. It only takes earning $1 over the threshold to trigger the surcharge. In 2026, that $1 of income would cost you an additional $1,052.40 annually in Medicare surcharges, consisting of $974.40 for Part B and $174 for Part D. That's just the first tier; there are four more. The maximum surcharge in 2026 is $6,936: an extra $5,844 for Part B and an extra $1,092 for Part D.

A Roth IRA conversion of a traditional IRA is one way to reduce income and, therefore, reduce or avoid the IRMAA. However, a Roth conversion takes planning. You can convert the account at once or over several years. The most important thing to consider is the year you intend to enroll in Medicare. Completing the conversion three years before you apply is critical to avoid triggering the IRMAA. The tax-free income from the new Roth IRA will not count toward your IRMAA MAGI, the figure that either damns or exempts you from the IRMAA surcharges.

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The Income-Related Monthly Adjustment Amount, or IRMAA for short, is an extra charge added to the monthly premiums for Medicare Part B and Part D if your modified adjusted gross income (MAGI) from the two prior years exceeds certain limits.

The extra expense for 2025 can range from $888 to $5,326.80 per year for Medicare Part B, and $164.40 to $1029.60 for Medicare Part D, depending on how much your income exceeds the threshold.

IRMAA's negative impact

You might think the IRMAA won't apply to you, since your income in 2025 has to exceed $106,000 as a single filer and $212,000 as a couple. However, it may, when taking into account pensions, dividend-paying investments, capital gains, and required minimum distributions.

Plus, the IRMAA is based on your earnings from two years prior, which means for 2025, it's based on your 2023 income. “People don’t know what IRMAA is,” says Nancy Gates, lead educator and financial coach at Boldin. “They could pay three times what everyone else pays for Medicare.”

You may not think it's a big deal if you are retiring with a sizable nest egg, but the money owed is deducted from your monthly Social Security check, which many retirees rely on for their cash flow.

“If your Social Security is now 10% less every month, that’s a very tangible consequence,” says Derrick Longo, a wealth advisor at Exencial Wealth Advisors. “Even for people who have adequate savings, Social Security is still a steady source of income.”

That’s particularly true in the current environment in which stock market volatility has hurt many retirees' investment portfolios.

If you've received an Initial IRMAA Determination from the Social Security Administration stating that you’ll be subject to IRMAA on your Medicare Part B and D premiums, you can try to appeal. Gates says you can file an appeal to the Social Security Administration (SSA) if you have a life-changing event, such as retirement, and SSA may exempt you from IRMAA.

But you may not be able to get an exemption, Gates says, depending on circumstances, such as if you have big after-tax dividend payments or made a profit on the sale of your house, or you and your spouse both have pensions and/or RMDs.

“Every situation is different, but IRMAA really impacts many people after RMDs kick in,” says Gates.

Roth conversion for the win

The good news is that there is a strategy you can employ that can help you avoid IRMAA when it comes to RMDs: Roth conversions.

This occurs when you move money out of a traditional IRA or 401(K), 403(b), or 457(b), pay taxes on the withdrawals, and shift the money into a Roth IRA to enjoy future tax-free growth. Beyond the potential for tax-free gains, Roth IRAs have no required minimum distributions and allow tax-free withdrawals after five years and the age of 59-1/2.

This strategy helps in avoiding the IRMAA as it means that in future years, you won’t have to withdraw money, add to your MAGI and potentially pay more for Medicare.

Be forewarned that even with a Roth conversion, there could be some bracket creep if you had a lot of capital gains or your income still exceeds the MAGI threshold, says Longo.

That doesn’t mean a Roth conversion isn’t still worthwhile. After all, it's a tax-efficient way to leave money to heirs and to protect your spouse from big tax hits when you pass away.

Timing is everything

Gates says Roth conversions work best when you have an idea of your tax rates across your lifespan and know the highs and lows. From there, you can explore strategies such as Roth conversions to avoid or reduce IRMAA fees.

You can spread the Roth conversions out over the years when your tax bracket falls to remain under your desired/specific tax and IRMAA thresholds, and not face a big tax bill, she says.

For those who are in lower income ranges or who are planning to retire early, converting before age 63 can be especially advantageous. That's because most individuals enroll in Medicare at age 65, and so their income before 63 will not impact their Medicare Premiums, she says.

“Taxes are the primary driver of the Roth conversion strategy, and IRMAA is often secondary,” says Gates. She says people should take advantage of Roth conversions during the years they are in lower tax brackets and before they begin collecting Social Security, pensions, and RMDs (which kick in at age 72 or later, depending on your birth date).

“As long as you stay in the 12% tax bracket, you’re under the IRMAA threshold. In the 22% tax bracket, you could be under the threshold or fall into the first tier,” says Gates.

To avoid IRMAA, time is of the essence. You'll need to start and complete the Roth conversions three years before you apply for Medicare, because of the two-year look-back period.

For instance, someone planning on applying for Medicare in 2025 would have needed to complete their Roth conversion by 2023, because the SSA looks at the return from two years ago. A warning for people who applied for Social Security benefits early: you will be automatically enrolled in Part A and Part B (you can decline Part B, but not Part A) and will face premium surcharges if you don't plan accordingly.

Don't forget taxes

There is a caveat with this strategy that you need to consider. When you convert to a Roth, you pay taxes on the money you move from your traditional 401(k) or IRA to a Roth IRA, which could push you into a higher tax bracket, which means more money going to Uncle Sam.

You have to weigh whether it's worth it to pay more taxes for one year or pay higher Medicare premiums for several years. Typically, the tax hit is worth it, says Gates.

“You need to monitor the IRMAA threshold every year and look for those years and do a series of Roth conversions during those low tax years,” says Gates.

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Advantage plans are an alternative to original Medicare, replacing Part A (hospital coverage), Part B (outpatient care coverage), and sometimes Part D (prescription drug coverage).

Enrollment in these plans is expected to grow to 60% of the eligible population by 2030, with many people drawn to them because they're often marketed as "zero premium" plans with out-of-pocket limits, while Medicare Part B has uncapped spending and charges premiums. The Trump administration strongly favors the expansion of Medicare Advantage plans.

Yet, while Advantage Plans seem like a good alternative, a substantial number of older Americans who sign up for them don't stick with them. In fact, among those who signed up between 2011 and 2022, around half left their plans within five years.

Recent research published in the journal Health Affairs helps demonstrate why so many are opting out of their Advantage Plan during open enrollment, either by switching to a different Part C plan or by returning to traditional Medicare instead. Since these Advantage plans are less likely to attract beneficiaries over the long term, the study warns that such plans will likely have less incentive to cater to participants with chronic conditions.

Should you ditch your Medicare Advantage plan? Why others are

Researchers sought to gain insight into why Medicare Advantage participants were disenrolling by using information from the Medicare Current Beneficiary Survey, linked with data on Medicare Advantage enrollment. The survey measures patient satisfaction with access to medical care, as well as the cost and quality of the care they receive.

Researchers found two primary factors drove departures from Medicare Advantage plans, and neither was related to cost. Instead, most people who disenrolled did so because of difficulty accessing care as well as concerns about the quality of their care.

Access issues, in particular, were especially likely to prompt Advantage customers not just to switch to a different Medicare Part C plan but instead to return to traditional Medicare. This makes sense, given that traditional Medicare doesn't impose the same limits as Advantage Plans on which doctors or care providers patients can visit.

Hospitals have also been ending their affiliations with Medicare Advantage Plans, creating huge problems when break-ups happen outside of the open enrollment period, and Advantage Plan customers suddenly find themselves without coverage at the hospital where they'd been treated.

Researchers also revealed that individuals with health issues were more likely to switch out of their Medicare Advantage plan. Those who described themselves as being in poor health were:

• More than twice as likely as other Advantage members to express difficulty with getting care;
• More than three times as likely to be dissatisfied with the quality of care they are getting
• More than twice as likely to be unhappy with the cost of their care
• More than twice as likely to be dissatisfied with their specialty care.

"People who stay in [Medicare Advantage} are shopping for better service, but … those who switch to traditional Medicare are the ones potentially with high health care needs, who are much more strongly driven by dissatisfaction with access to care issues " said Geoffrey Hoffman, Ph.D., Associate Professor, U-M School of Nursing and one of the study's authors.

This tendency to switch between Advantage plans or back to original Medicare could undermine the long-term effectiveness of these plans while also driving up the nation's cost to provide original Medicare. The study warns that Advantage plans will likely focus on the short-term healthcare needs of beneficiaries due to plan hopping.

How you can find the right Medicare plan

Since concerns about care quality and accessibility were the most likely reasons for retirees to switch out of their Medicare Advantage Plan — often back to traditional Medicare — it's clear that these are issues that older Americans should pay attention to when shopping for an Advantage Plan.

Those shopping for coverage should visit the Advantage plan's website to find their searchable directory and determine if their preferred care providers accept that insurance plan. Plan websites may also offer a comprehensive directory of all care providers whose services are covered, providing insight into the breadth of the plan's network. The Medicare Advantage open enrollment period is from January 1 to March 31 each year. Original Medicare's open enrollment period is from October 15 to December 7 each year.

Those looking for a plan should also check the Star Ratings published on the Medicare Plan Finder by the Centers for Medicare and Medicaid Services (CMS). The Health Affairs research revealed that enrollment in a plan with a low star rating was far more likely to result in dissatisfaction with the Medicare Advantage Plan and to lead to disenrollment when given the opportunity, as shown in the figure below.

"While imperfect, the star rating a plan receives is still signaling something important, that our study tells us is definitely linked to why people are switching," Hoffman said.

Online guides that provide insight into shopping for a Medicare Advantage plan can also be a helpful resource. It's best to start exploring these tools before open enrollment, though, to prepare in advance, as there's limited time to sign up for coverage you're committing to for the year — except in situations where major life changes entitle you to a special enrollment period.

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HSAs can help you build a nest egg to pay for medical expenses in retirement, including Medicare premiums and co-payments. However, the prevailing rules prohibit participation after you enroll in Medicare and are confusing for those who have an HSA while they are preparing to retire.

There is one provision that might be helpful to those who use the Affordable Care Act marketplace to buy healthcare while waiting for their Medicare eligibility to kick in at 65. More about that opportunity is below.

Present HSA rules limit contributions when close to retirement

Currently, HSA contributions, including those made by an employer, are prohibited when you are covered by "disallowed" insurance plans, including Medicare Part A. Workers can still enroll in HSA-eligible workplace plans and use funds already in their HSAs for eligible expenses; they just can’t make any additional contributions once they are enrolled in Medicare.

Then, you face the tricky period when you have an HSA and are preparing to enroll in Medicare. There is a six-month lookback period, during which your Medicare Part A coverage is back-dated six months, starting no earlier than the first month of Medicare eligibility, the month of reaching age 65.

A best practice for workers is to stop contributing to their HSA six months before the month they apply for Medicare to avoid penalties. Be aware that the month of your application is what is used to calculate the six-month lookback, not the month you wish the benefits to begin.

You must satisfy the following four requirements to be HSA-eligible in 2025:

• Be covered by a qualified high deductible health plan (HDHP)
• Have no other disqualifying health coverage
• Not be enrolled in any part of Medicare
• Not be able to be claimed as a dependent on someone else’s current-year tax return

The One Big Beautiful Bill did not include most of the provisions included in the House version that are detailed below.

Importance of repealing the Medicare Part A enrollment prohibition

Medicare eligibility kicks in at age 65. At that point, most people have to decide whether to enroll in Medicare Parts A and B or a Medicare Advantage plan. If you have credible coverage from an employer, you can delay enrollment without paying a late enrollment penalty when/if you enroll later. However, if you claimed your Social Security benefits before age 65, you have created a conflict if you enrolled in an HDHP plan through your employer.

If you are receiving Social Security benefits when you turn 65, you will be automatically enrolled in Medicare Part A and Part B. If you have credible employer coverage, you can waive Part B coverage penalty-free and use your Medicare Part A coverage as secondary coverage; you can't disenroll from Part A. If your employer-provided coverage is an HDHP, you'd be able to keep your coverage, but you will no longer be eligible to make or receive contributions to your HSA.

The only way to opt out of this would be to rescind your Social Security election within 12 months and pay back all benefits received to date. You may or may not be aware that you have the option to stop and restart your Social Security benefits. There are several reasons why you may want to revisit your decision to file for benefits; you'd also be able to increase your monthly benefit if you claimed your benefits before your full retirement age (FRA).

1. Proposed change: If the repeal is implemented, anyone with an HDHP plan can continue to make contributions after enrolling, voluntarily or automatically, in Medicare Part A. This also means that employees who have an HDHP plan can claim their Social Security benefits before age 65 without jeopardizing their HSA eligibility.

Status: Did not pass.

Changes to contribution limits and new spousal contribution and catch-up rules

There are more favorable provisions in the legislation that would raise the contribution limits for some workers and give married couples some flexibility when making catch-up contributions.

Contribution limits. In 2025, annual HSA contribution limits are $4,300 for self-only coverage and $8,550 for family coverage, and HSA contribution limits are indexed every year for inflation. Employees making under certain income thresholds would be allowed to save more.

2. Proposed change: Higher contribution limits based on income. The higher contribution limit would allow individuals who make less than $75,000 annually to contribute an additional $4,300 every year to their HSA. Families who make less than $150,000 may contribute an additional $8,550 each year to their account; the additional contribution limits would be indexed for inflation.

The additional amounts would be phased out for individuals making $100,000 annually and $200,000 for families.

Status: Did not pass.

Catch-up contributions. Now, if both spouses are HSA-eligible and age 55 or older, they must open separate HSA accounts to make their respective “catch-up” contributions of $500 or an extra $1,000 annually.

3. Proposed change: New rule would allow both spouses to consolidate their catch-up contributions and deposit them into one account. Both spouses still must be HSA-eligible.

Status: Did not pass.

Restrictions when one spouse has a Flexible Spending Account (FSA). An employee is not eligible for an HSA if their spouse is enrolled in an FSA.

4. Proposed change: This provision would allow an individual to be eligible for an HSA even if their spouse is enrolled in an FSA.

Status: Did not pass.

Allowing HSA account holders to use more healthcare services and providers

Current rule disallowing use of on-site employer health clinics. Employees who utilize discounted health care services at a clinic at their worksite can not contribute to an HSA. The IRS views such services as a significant medical benefit, therefore incompatible with HSAs.

Status: Did not pass.

5. Proposed change: Employees who make use of the discounted health care services at a health clinic at their worksite may still contribute to an HSA.

Status: Did not pass.

Current rule disallowing membership in a DPC. Currently, membership in a direct primary care (DPC) would disallow you from having an HSA. These plans are considered a "separate and additional form of health insurance coverage" that is incompatible with HSAs. A DPC practice typically charges a patient a flat monthly or annual fee in exchange for access to a range of primary care and medical administrative services.

6. Proposed change: The new law would allow individuals to maintain HSA eligibility if they have a direct primary care (DPC) membership of up to $150 per month.

The new law also allows HSA funds to pay for DPC services. However, HSA distributions for DPC services cannot exceed $150 per month for individuals or $300 per month for family arrangements. These amounts would be adjusted annually for inflation.

Status: Passed! If you have an HDHP and contribute to an HSA, you can now make use of direct primary care memberships to get your care, use funds to pay the monthly fee, and maintain your eligibility to contribute to an HSA.

New expenses are eligible for HSA reimbursement

The definition of eligible expenses has been expanded to cover certain fitness expenses and also would allow some expenses incurred before an HSA is established to be eligible for reimbursement.

Current rule: Sports and fitness expenses, such as fitness facility membership fees, are not treated as HSA-qualified medical expenses.

Status: Did not pass.

7. Proposed change allowing certain fitness expenses: This provision would expand the definition of qualified medical expenses for HSAs to allow workers to use their HSAs for physical fitness memberships and instructional physical activity.

Individuals would be allowed up to $500 per year, and families would have a limit of $1,000 per year, with up to one-twelfth of such expenses allowed per month.

Status: Did not pass.

Current limit on eligible expenses: HSA funds can only be used for qualified medical expenses (QME) after the HSA is established.

8. Proposed change: The new definition would allow individuals to use HSA funds for medical services incurred within 60 days before the establishment of an account. These expenses would now be treated as eligible QME.

Status: Did not pass.

HSAs can help pay your medical expenses in retirement

HSAs are getting more attention as Gen Xers move into pre-retirement and lack the employee benefits, such as pensions and employer-provided health care that previous generations took into retirement. The attention is well-deserved, as an HSA can be a powerful wealth-building tool; think of it as a medical IRA. Why? Because the contributions are tax-advantaged and the distributions from an HSA are tax-free when used for qualified medical expenses.

After 65, the rules are even more generous. You can take distributions for any reason without paying a penalty. The 20% penalty for non-medical expenses imposed before age 65 goes away. If you use the money for something other than QMEs, you only pay income taxes.

Although most of the favorable changes for retirees proposed in the One Big Beautiful Bill did not come to fruition, there was one provision that might be helpful if you are using the Affordable Care Act marketplace to buy health insurance as you wait for your Medicare eligibility to begin. As of January 1, 2026, you can enroll in an HDHP Bronze plan or pick up a catastrophic plan and contribute to an HSA.

What hasn't changed is the cost of the legislation. The deficit spending caused by the bill could trigger mandatory cuts to Medicare, amounting to roughly $500 billion from 2026 to 2034.

If you'd like to know more about changes included in the legislation, read Four Proposed Changes to Medicare in the One Big Beautiful Bill Act — and What Ended Up in the Signed Bill.

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This extra step, called prior authorization, is becoming more common with most types of health insurance, including Medicare Advantage, employer coverage and individual plans sold through HealthCare.gov or your state health insurance marketplace.

When your health plan requires prior authorization, your doctor must provide evidence that the specific care is medically necessary and is the best course of action in your situation.

Prior-authorization requirements have increased significantly over the past few years. For example, virtually all enrollees in Medicare Advantage plans are required to obtain prior authorization for some services, and these insurers made nearly 50 million prior-authorization determinations in 2023, up from 37 million in 2021, according to health policy research organization KFF.

Insurers don’t always approve these requests. In 2023, for example, Medicare Advantage insurers fully or partially denied 3.2 million prior-authorization requests, according to KFF.

Insurers say that prior authorization provides a vital screen to ensure patients receive safe, evidence-based care and to reduce low-value and inappropriate services so that coverage is as affordable as possible.

'An overused process'

The American Medical Association, however, calls prior authorization “an overused process that interferes with patients receiving timely care, or even any care at all.”

More than one in four physicians report that delays or denials related to prior authorization have led to a serious adverse event, such as hospitalization, disability or even death for a patient in their care.

And prior authorization isn’t the only obstacle you may encounter. You may face a denial of your claim after you receive a procedure or treatment if the insurer decides that your coverage doesn’t include it, or you didn’t get the necessary prior authorization first.

Insurers of health plans sold on HealthCare.gov denied 19% of in-network claims and 37% of out-of-network claims in 2023, according to KFF.

But you don’t have to take no for an answer, and perseverance often pays off. Less than 12% of Medicare Advantage prior-authorization denials were appealed in 2023, but more than 81% of the appealed denials were partially or fully overturned, KFF found.

Only 1% of the in-network denials were appealed for the policies sold on HealthCare.gov, but 44% of the denials were overturned at the first level of appeal, KFF found.

You may also be able to successfully appeal denials from employer health insurance plans or traditional Medicare — whether for prior authorization or for a service you already received — although few people know their appeal rights.

“Never accept the first denial letter you get, because it is often just the default reaction to treatment protocols, especially if it’s something new,” says Suzanne Garner, 47, of San Diego, who was first diagnosed with breast cancer seven years ago.

“It doesn’t matter if the treatment is fully FDA-approved and, in the case of oncology care, even if the National Cancer Coalition and ASCO [the American Society of Clinical Oncology] have endorsed it to be a piece of standard of care,” she says. “If it’s new, for a while, it’s likely to be denied.”

By appealing, Garner has successfully reversed more than 20 prior-authorization denials and five denials for claims after receiving a bill.

“At the beginning, I was very intimidated when I would get these denials and big cost estimates, and I remember crying and saying to my husband that we would have to go into our daughter’s college fund or our retirement fund,” Garner says. “For the most part, we figured it out, but it took being brave, advocating for myself and waiting on hold a lot. Don’t be afraid to appeal, and don’t be afraid to ask a lot of questions.”

Here’s what you need to know to appeal a health insurance denial, whether it involves a prior authorization request or a big bill following a procedure or treatment that you believe your insurance should cover.

Help from your doctor

The procedure for appealing a denial varies depending on the type of health insurance.

“You have to follow the time line and the instructions on the explanation of benefits or the Medicare summary notice,” says Tatiana Fassieux, education and training specialist for California Health Advocates. She helps people with all levels of appeals through HICAP, the state’s health insurance assistance program.

Whatever the appeals process, you should contact your doctor’s office right away after you receive a denial.

“There’s a certain amount of time to appeal — sometimes it’s 30 to 60 days, depending on the insurance. But we might not be alerted to that denial until 21 days have passed, and sometimes it’s a fight against time,” says Michelle Vanderwaall, who spent more than 20 years as an operations manager for several surgical specialties in a San Diego hospital system.

Your doctor’s office can help you determine how urgently you need care. When you’re diagnosed with a major disease, you might feel as though you have to rush to get treatment, with no time for appeals, Garner says.

“Oftentimes, when you’re told you have cancer, it feels like a medical emergency. But you may have weeks or a month or two where you can take a breath and make sure everything is lined up before you have that surgery or scan or treatment.”

Plus, your medical team may regularly deal with appeals, developing expertise in navigating them. The staff at the office of Garner’s oncologist were instrumental in overturning denials for PET scans, breast MRIs, an oophorectomy (ovary removal surgery) and other procedures.

“My oncologist and her team have gone to bat for me. I’ve had so many scans denied,” she says. “I had a number of PET scans because I also have an autoimmune disease that will show up on these imaging studies.”

The insurer initially denied the requests for PET scans and wanted her to have CT scans instead. Several of the denials were reversed after her oncologist got on the phone with a doctor at the insurance company and explained her specific needs, a step called a peer-to-peer review.

Bruce A. Brod, a physician and clinical professor of dermatology at the University of Pennsylvania Perelman School of Medicine, says that he sometimes can get a denial reversed through a peer-to-peer review.

But the conversation isn’t necessarily with other dermatologists, so he may need to take extra time to explain the patient’s needs. “Oftentimes, I’m talking with a nurse practitioner who was involved in primary care, or a primary-care physician. Or sometimes I talk to an OB/GYN or internist who works for the insurance companies,” says Brod.

Another reason to contact your doctor’s office after a denial: It may be a simple mistake.

Garner received a bill for the full cost of a re-excision surgery for her lumpectomy. “When I got the notice, it looked as though insurance covered $0, and I didn’t understand,” she says. “I was stressed out about it, and I brought all the paperwork to my next visit and had my team look at it.”

They discovered that the wrong number/letter combination had been typed in for the surgical code. After they submitted the claim with the correct code, the insurance company covered it.

Other sources of assistance

Some doctor’s offices are more helpful with appeals than others, and you may need to advocate for yourself. But that can be difficult to do when you’re learning new medical terminology while dealing with a major diagnosis.

“I’m aggressive and pretty educated in my diagnosis,” says Garner. “When you get a cancer diagnosis, you have to learn a new language, and it’s super overwhelming.”

Garner learned a lot from other cancer survivors in support groups, and she shares the knowledge she has collected, too.

For example, she helped a neighbor who was diagnosed with breast cancer get 14 months of coverage for an infusion her oncologist recommended. The insurance company wanted to pay for only eight months, citing an older study that suggested eight months of treatment could be just as effective as 14 months.

Garner used Outcomes4Me, a cancer-support app that aggregates medical research for patients based on their specific diagnosis (Garner now works for Outcomes4Me), and they looked through PubMed (a resource of medical literature from the National Institutes of Health) and Google Scholar to find newer studies.

“We were able to pull together a compelling case with numerous studies that showed it was more effective to have the full 14 months,” she says.

You may get help from a nurse navigator or a social worker at the hospital or your doctor’s office. Additionally, nonprofits and advocacy groups specializing in your disease may provide resources and help with claims.

Cancer-focused groups include the American Cancer Society, the Susan. G. Komen Foundation, which focuses on breast cancer, and Triage Cancer, a national nonprofit that provides education on the legal issues after a cancer diagnosis.

Among other disease-specific organizations are the American Diabetes Association, the American Kidney Fund and the National Kidney Foundation.

The Patient Advocate Foundation and Triage Health help people with a variety of serious conditions navigate insurance and financial issues.

“I think one of the major challenges is that there is an overarching lack of awareness about the appeals process,” says Monica Bryant, a cancer-rights attorney and chief operating officer for Triage Cancer.

“This is a lot to put on the shoulders of someone who already has a too-full plate. However, when we’re talking about access to care issues and how to avoid financial hardship after a cancer diagnosis, the appeals process is an incredibly important tool.”

Bryant has helped reverse denials in a variety of situations. She has been able to get coverage for oral chemotherapy when the insurer wanted to cover only IV chemo, or for cancer screenings outside of the usual guidelines — for example, for a person younger than the standard age who needed the screening for a medical reason.

She has also helped get coverage for off-label drugs prescribed by the doctor. “The science moves faster than insurance companies and the law, and the science might indicate that a drug that is approved for one type of cancer is really effective in treating another type and is being prescribed off-label,” she says.

She helps gather the evidence to build the patient’s case, which can include medical records, test results, literature, clinical trial results, a personal narrative or a letter from the doctor, she says.

Prior authorization is much less common for original Medicare than it is for Medicare Advantage plans, but you can get help navigating the appeals process for either type of coverage from your State Health Insurance Assistance Program, the Center for Medicare Advocacy and the Medicare Rights Center.

Your insurance broker may also be able to assist, says Craig Wilcox, a Medicare insurance broker in Northern Nevada.

Next levels of appeal

If the first stage of your appeal is unsuccessful, you can request an external appeal, in which someone from outside the insurance company reviews the evidence.

“We gather all the medical records, and we make sure it’s a complete story and time line of what happened,” says Christine Huberty, an attorney with the Center for Medicare Advocacy.

If that appeal is denied, the next steps vary depending on the type of insurance. For Medicare Advantage plans, you can request a hearing with an administrative law judge. (The case must meet a minimum dollar amount of $190 to be eligible in 2025.) “You don’t need an attorney, but people assume you do,” says Huberty.

She has assisted several people in getting denials overturned at this third level, especially for rehabilitation in a skilled nursing facility.

For example, your doctor may say you need six to eight weeks of rehabilitation after a stroke, but after two weeks of rehab, you get a surprise denial for further care, she says. “The people who fight the denial often get it overturned, but they may have to do it five or six times over the course of their treatment.”

Huberty recently helped Rosemary Perry and Lisa Strelecky with a claim involving their mother’s skilled nursing facility in Hartford, Conn.

Their mother had a severe laceration on her leg from a chair lift footrest and needed 21 stitches. Three days later, she fell on the stairs in her garage and couldn’t walk. After four days in the hospital, she was transferred to a skilled nursing facility for rehab.

“I thought she was going to be there for six to eight weeks to do the physical therapy and get this wound under control,” says Strelecky, who is a neonatal nurse. But nine days after she was admitted, she received a notice that the insurance was going to stop paying for the care.

The sisters called the insurance company to appeal and let them know their mother needed daily nurse care, complicated wound care and physical therapy. The coverage was extended.

Then, six days later, the insurer said the coverage was going to end again. They appealed and got coverage extended for four more days. After that, their appeal was denied.

They wrote a letter explaining that she continued to need physical therapy and nursing care, but the insurer also denied the next level of appeal. Keeping their mother at the facility cost $700 daily without insurance coverage.

They were billed the full cost for a week before moving her to another facility, and she passed away the same day she was transferred.

Shortly after the funeral, Perry and Strelecky contacted the Center for Medicare Advocacy and connected with Huberty, who agreed to accept the case. She gathered the evidence explaining why their mother continued to need skilled nursing facility care during that time and sent it to the insurance company and the administrative law judge.

The day they were scheduled to have a hearing before the administrative law judge, the insurer agreed to pay out for the week of care that was unpaid, which Huberty says is common.

“Had I known that Christine’s department existed, would she have been able to help us sooner?” asks Strelecky. “That would have been amazing.”

Tips for getting out-of-network coverage

The plot of the hit TV show Breaking Bad revolves around Walter White’s scheme for earning money to pay for his out-of-network lung cancer treatments. But rather than cooking meth for the cash, you may be able to get an insurer to cover out-of-network care if you can build a strong enough case that your policy doesn’t include an in-network specialist who provides the specialized care.

“There are network exceptions, and if a patient can show that seeing a provider is medically necessary, that would be a reason to appeal,” says Bryant of Triage Cancer.

In breast reconstruction after a mastectomy, she sees this happen frequently for those who want a procedure known as a DIEP flap reconstruction but have no access to in-network plastic surgeons who perform it. But the exceptions can vary a lot by insurer, she says.

Sometimes your doctor’s office will do the legwork.

Michelle Vanderwaall frequently needed to get out-of-network coverage for patients when she managed an ENT (ear, nose and throat) office. Before ear surgery, for example, sometimes patients have to get a special hearing test with an audiologist, and there may be no in-network specialists who do it, she says.

She would get the names of audiologists in the plan’s network and ask each one whether they could do the test. When she had exhausted all the options, the insurer would usually cover the out-of-network audiologist.

Get a reference number or written letter from the insurance company verifying the extra coverage, she says.

If you’d like to use a doctor who isn’t covered by your plan, you could also switch plans during open enrollment, which is usually in the fall for employer plans, individual plans sold through HealthCare.gov or your state health insurance marketplace, and Medicare Advantage plans (original Medicare lets you see any doctor who participates in the Medicare program).

Even if the doctor you prefer isn’t in a plan’s network, you could get some extra coverage by switching from a health maintenance organization (HMO) to a preferred provider organization (PPO). PPOs usually cover out-of-network providers, but you may need to pay a higher deductible and co-payments than for in-network care.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Whether it's a tumble over some cobblestones or a serious medical event, such as a heart attack, sometimes you need emergency health care abroad.

When an emergency happens, you can't put off medical care until you get home. You have to be treated where you are and sort out the expenses after the emergency subsides. But that doesn't mean you can't plan. Understanding what your Medicare insurance does and doesn't cover when you are away from home is the first step.

Whether you can expect assistance from Medicare when you travel boils down to what type of Medicare policy you have and whether you're traveling domestically or internationally.

Beneficiaries with original Medicare have access to more care when in the U.S. and can shop around for limited international coverage that's included in some Medigap plans.

Those enrolled in Medicare Advantage plans (MA) are at a significant disadvantage because their care is tied to a defined network of doctors and hospitals. If you have an MA plan, you'll likely pay more domestically for care and might be able to find a plan that provides travel insurance as one of the perks.

What's covered by Medicare when you're traveling in the U.S.

The type of Medicare policy you have will impact your ability to use your Medicare benefits when traveling in the U.S.

Original Medicare. If you're enrolled in original Medicare, you're in luck. You can use your coverage anywhere in the 50 U.S. states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa and the Northern Mariana Islands. Your Medicare coverage doesn’t change when you cross state lines; there are no price increases, out-of-state restrictions or additional approvals when you need care.

Medicare Advantage. An essential cost management feature of many MA plans is the network of physicians, hospitals and providers with whom they've contracted to provide care to their members. The size and scope of these networks can vary significantly between plans — they don’t usually reach across state lines. When you leave a network, you run the risk of paying more for your care.

Take some relief and comfort knowing that MA plans are required to cover emergency and urgent care anywhere in the U.S. without imposing additional costs or coverage rules. If you have an MA plan and seek non-emergency/urgent care, your plan might or might not cover that care outside of its service area.

Some plans might cover providers that are out-of-network or out of your service area, but with higher cost-sharing and coinsurance.

Your plan might also impose other rules or restrictions for non-emergency care, such as prior authorization. Contact your plan to see what the rules are and which costs apply when you travel within the U.S.

If possible, use telehealth to see your regular doctor or provider for prescription refills or to attend to an issue that doesn't require a physical examination.

Limits of international Medicare coverage

When it comes to international travel, original Medicare and Medicare Advantage plans provide minimal assistance and shouldn’t be relied on to cover a medical event, minor or major, when you're outside of the country.

There are exceptions to the rule, however. There are three circumstances where Medicare will provide some coverage at a foreign hospital, but they primarily benefit beneficiaries living in or traveling near Canada or Mexico. In practical terms, the exceptions only apply if you're in the U.S. or traveling to Alaska.

These are the three situations when Medicare might pay for certain types of health care services you get in a foreign hospital (a hospital outside the Medicare definition of the U.S.):

• A foreign hospital is closer while traveling in the U.S. You’re in the U.S. when you have a medical emergency, and the foreign hospital is closer than the nearest U.S. hospital that can treat you
• Traveling to Alaska. You’re traveling through Canada without "unreasonable delay" by the most direct route between Alaska and another state when a medical emergency occurs, and the Canadian hospital is closer than the nearest U.S. hospital that can treat you (Medicare determines on a case-by-case basis which situations qualify as “without unreasonable delay")
• A foreign hospital is closer to your home. You live in the U.S., and a foreign hospital is closer to your home than the nearest U.S. hospital that can treat you, regardless of whether you have a medical emergency

Be prepared to pay all your costs outside the U.S. out-of-pocket. Foreign hospitals have no obligation to file claims for payment. As you might expect, you also pay any co-insurance, co-payments, and deductibles you'd normally pay if you received these same services or supplies inside the U.S.

In the same way that Medicare only covers foreign medical expenses in limited circumstances, it also limits the types of services it will cover.

Medicare Part A, Part B, and MA plans might approve payment for the following services:

• Medicare Part A hospital insurance will cover your hospital care when you've been formally admitted with a doctor's order to a foreign hospital as an inpatient
• Medicare Part B will cover your emergency and nonemergency ambulance and doctor services you get immediately before and during your covered foreign inpatient hospital stay
• Medicare will not pay your ambulance or doctors' expenses if it doesn't approve payment for your hospital stay. It will also deny reimbursement if you received the ambulance and/or doctor services outside the hospital after your covered hospital stay has ended

Medicare Advantage plans are required to provide all the services that original Medicare does, but not more. Although many MA plans have lots of perks that cover things Medicare doesn't, such as hearing aids, they don't automatically offer international travel benefits beyond what was already discussed.

However, there are Medicare Advantage plans that offer forms of coverage for emergency care and urgent care services during international travel.

The coverage and rules vary, so it's important to check with your plan to determine the details of your foreign coverage before you enroll in a plan and again before you travel.

Warning for snowbirds and globetrotters

Many MA plans limit the amount of time you can spend outside your service area (PDF) and still be covered. Typically, the limit for coverage is six months. For example, if you’re a snowbird who spends winters in Florida, you can remain there for six consecutive months and maintain your MA coverage.

If you stay longer than your allotted time, you might be disenrolled from the plan, and a Special Enrollment Period (SEP) would be triggered. If you fail to make a new selection of coverage, you will be automatically enrolled in original Medicare.

While the six-month limit is common, a small number of MA plans allow you to travel continuously within the U.S. for up to one year and still keep your benefits. However, that's a condition you need to seek out when you choose your plan.

Prescription drug coverage

Whether you have a standalone Part D prescription drug plan or get coverage through your Medicare Advantage plan, Part D won't cover prescriptions you get outside the U.S. If you have to buy medication from an international pharmacy, you should expect to pay the entire cost out of pocket.

Vaccination coverage

Your Medicare Part D drug coverage covers all vaccines recommended by the Advisory Committee on Immunization Practices (ACIP), including certain vaccines you might need to get before you travel outside the U.S. Those vaccinations include: yellow fever; chikungunya; and Japanese encephalitis.

Your Part D plan won't charge you a copayment or apply a deductible for vaccines ACIP recommends. Before traveling, talk to your medical provider about which ones are right for you.

Select Medicare Advantage plans and Medigap are your best bets for international coverage

Some Medicare Advantage plans include travel benefits for when you need care away from home. These travel benefits usually cover more than just emergency and urgent care and help ensure you have coverage no matter where you are.

However, not all plans have the same rules and limitations. It's important to ask questions when shopping for the right Medicare Advantage plan.

Several Medigap plans offer some coverage for foreign travel emergencies. There is a deductible, a lifetime limit and a limited window of time during which your coverage is active while traveling.

Medigap plans C, D, F, G, M, and N provide foreign travel emergency health coverage. Here are the features and limitations of this coverage:

• Initial deductible: You pay a $250 annual deductible for foreign travel emergency services
• Coverage limit: Plans cover 80% of the billed charges for certain medically necessary emergency care outside the U.S. after you meet the $250 deductible
• Lifetime limit: There is a lifetime limit of $50,000 for foreign travel emergency coverage
• Time limit: The emergency care must begin during the first 60 days of your trip outside the U.S. If your trip lasts longer, the coverage will not apply after the first 60 days

Take note of these examples of what these Medigap plans will not cover:

• Routine care: Regular check-ups, non-emergency treatments or elective procedures aren't covered. If you plan to see a doctor abroad for a routine check-up, your Medigap will not pay for it
• Trips longer than 60 days: If you're traveling abroad for an extended period, more than 60 days, any medical emergencies occurring after the initial 60 days are not covered
• Exceeding lifetime limit: If you've already reached the $50,000 lifetime limit for foreign travel emergency coverage, any further claims won't be covered

Medigap plans E, H, I, or J, which are no longer sold, might be kept it if you bought one of these plans before June 1, 2010. They still cover foreign travel emergency care.

Be safe at home and away

Original Medicare and Medicare Advantage plans provide limited travel medical coverage outside the U.S.; you should consider buying a travel insurance policy to get more coverage.

Check with an insurance agent or travel agent to get more information about the cost of travel medical insurance. Be careful to read the terms of the coverage. Travel insurance doesn’t necessarily include health insurance, so it’s important to read the conditions or restrictions carefully.

Those with Medicare Advantage need to also consider getting travel health insurance for their domestic sojourns. Unless you enrolled in an MA policy that includes travel coverage, don't assume you'll be covered by your policy.

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Either way, the legislation triggers automatic cuts to Medicare and some other programs; fortunately, Social Security is excluded from these reductions. Without congressional intervention, Medicare payments are projected to be reduced by 4%, resulting in a $500 billion cut over eight years, beginning in 2026.

Here’s how Medicare was intended to change with the House and Senate bills and how it's ultimately changing under the legislation signed into law.

1. Allow contributions to HSAs after enrollment in Medicare Part A: Not included

There were some exciting changes to Health Savings Accounts (HSAs) included in the House version of the legislation. One of the most significant changes was for individuals enrolled in Medicare Part A who are still employed.

As it stands, if you want to make contributions to an HSA, you have to delay enrolling in both Medicare and Social Security. This is because most individuals who are collecting Social Security benefits when they become eligible for Medicare at age 65 are automatically enrolled in Medicare Part A. You cannot decline Part A while collecting Social Security benefits. To make HSA contributions, you can only be enrolled in a high-deductible health plan (HDHP).

Current Law: Individuals entitled to Medicare Part A are ineligible to contribute to a health savings account (HSA) even if they are still enrolled in a private high-deductible health plan (HDHP).

House bill- proposed changes: Under the proposed law, Medicare Part A-eligible working seniors enrolled in an HDHP can still contribute to an HSA. Existing HSA contribution rules and penalties for non-qualified medical expenses that apply to those under 65 will also apply to this group.

Contribution limits increase for some based on income. Another provision allowed bigger contribution limits. Individuals who make less than $75,000 annually could contribute an additional $4,300. In the case of families, they could contribute $8,550 each year to their HSA if they earn less than $150,000. These amounts would be indexed for inflation in succeeding years. The additional amounts would be phased out for individuals making $100,000 annually and for families making $200,000 or more.

As HSA accounts could be used to reimburse you for Medicare premiums and co-pays, the opportunity to save more could help cover more of your medical expenses in retirement.

If you'd like to know more about the HSA changes included in the legislation, read Proposed Changes to HSAs in the One Big Beautiful Bill Add up for Retirement Savers.

Senate bill- proposed changes: There were no provisions in the Senate bill to change how HSAs work. There were no changes to allow those employed and enrolled in Medicare Part A to still contribute to an HSA and no increase to contribution limits.

What ended up in the signed bill: A provision like this did not end up in the bill that landed on the president's desk to sign; therefore, this did not change.

2. Allow more hospitals to register as a "rural emergency hospital": not included

Financial stress has led to 146 hospitals in rural U.S. counties to close and 81 to convert to non-acute care (meaning they stopped providing general, short-term, acute inpatient care) between 2005 and 2023. Designation as a Rural Emergency Hospital (REH) by Medicare can be a financial lifeline to keep medical facilities open in sparsely populated areas.

Current Law: Only certain hospitals that were enrolled in Medicare as of December 27, 2020, were eligible to convert to the Rural Emergency Hospital (REH) designation.

House bill- proposed changes: The law would have established a “look-back” from January 1, 2014, to December 26, 2020, and allow qualifying rural hospitals open during that time, but that have since closed, to reopen under the REH designation.

Senate bill- proposed changes: The Senate bill did not include the provisions to retroactively extend the designation as a Rural Emergency Hospital (REH) to financially assist underserved rural communities.

What ended up in the signed bill: A provision like this did not end up in the bill that landed on the president's desk to sign; therefore, this did not change.

3. Use AI to reduce and recover improper payments: not included

The elimination of fraud, waste, and abuse has been a major theme of the second Trump administration. There was a provision in the bill to use AI to reduce and recoup Medicare overpayments.

The CMS recently launched a bid to audit every Medicare Advantage plan and clear the significant backlog by 2026.

House bill- proposed changes: A new law would have allocated $25 million for the Secretary of Health and Human Services to engage AI contractors and data scientists to investigate and recover improper Medicare payments. Also, the Secretary would be required to provide Congress with progress reports on reducing these improper payments.

Senate bill- proposed changes: The Senate bill did not include the provision to use AI to reduce waste, fraud and abuse.

What ended up in the signed bill: A provision like this did not end up in the bill that landed on the president's desk to sign; therefore, this did not change.

4. Limit eligibility for Medicare: included

Admittedly, current law already excludes anyone in the U.S. from unlawfully receiving Medicare benefits. To be eligible to enroll in Medicare as a retiree, you must be 65, have worked for 10 years, and be either a U.S. citizen or have been a permanent resident of the U.S. for at least five consecutive years.

The Big Beautiful Bill explicitly outlines which non-citizens would be eligible for Medicare; the work and age requirements are unchanged.

House bill- proposed changes: : The law eliminated Medicare eligibility for illegal immigrants and only allowed eligibility for Lawful Permanent Residents, certain Cuban immigrants, and individuals living in the United States through a Compact of Free Association.

The Compacts of Free Association are agreements between the U.S. and three Pacific Island nations: Micronesia, the Marshall Islands and Palau.

Senate bill- proposed changes: The Senate bill contained a provision about eligibility for Medicare. It included most of the same provisions as the House-passed bill. However, the Senate bill made certain immigrants from Haiti eligible for Medicare; they join certain Cuban immigrants who have entered the U.S as defined in section 501(e) of the Refugee Education Assistance Act of 1980 (Public Law 96–422).

The Senate bill terminated Medicare benefits no later than 18 months from enactment of the legislation for anyone who is currently receiving benefits but no longer eligible under these changes.

What ended up in the signed bill: A provision like this was included in the bill that landed on the president's desk to sign; therefore, it is now law.

5. Changes to Medicaid: included

While Medicaid is separate from Medicare, the One Big Beautiful Bill Act does result in major cuts to this Federal government program to the tune of more than $1 trillion over the next decade.

The biggest change under the law will require some Medicaid enrollees to regularly file paperwork showing they are working, going to school, volunteering 80 or more hours a month, or qualify for an exemption, to receive Medicaid. This requirement kicks in January 2027 and is expected to end health insurance coverage for millions of Americans.

Both the House and Senate versions included provisions that called for cuts to Medicaid.

What ended up in the signed bill: Reductions in Medicaid were a big piece of the legislation and were signed into law.

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The pending House reconciliation bill could lead to over $500 billion in Medicare cuts from 2026 to 2034, as projected by the Congressional Budget Office (CBO).

The CBO estimates that the bill would increase the deficit by at least $2.3 trillion compared to current law. If enacted, this deficit increase would trigger mandatory sequestration cuts under PAYGO. Notably, unlike Social Security and low-income programs, Medicare is not exempt from these potential cuts.

The PAYGO Act

The PAYGO Act mandates sequestration if Congressional legislation is projected by the Office of Management and Budget (OMB) to increase the deficit on average over either a five- or ten-year period, within a session. Despite being triggered multiple times, Statutory PAYGO sequestration has been consistently waived by Congress and has therefore never been implemented.

Certain programs and types of spending are exempt from sequestration, with most of the exemptions related to mandatory spending. Exempt health programs include: Medicaid, CHIP, ACA tax credits, Medicare Part D low-income subsidies and reinsurance, and veterans' medical care. Social Security is also exempt from sequestration.

Most Medicare spending is subject to sequestration, but special rules cap the reduction percentage for Medicare and certain other programs. The Budget Control Act (BCA) limits cuts to Medicare benefits spending, encompassing payments to providers under Part A and Part B, and to plans under Part C (Medicare Advantage) and Part D, to 2%. This is less than the standard percentage reduction applied to other nonexempt mandatory spending. Under a Statutory PAYGO sequester, these Medicare benefit payment reductions are capped at 4%.

If a PAYGO sequester were to be triggered, neither the Statutory PAYGO Act nor the BCA includes any explicit directions as to how the two sequesters would be implemented alongside each other.

Congress can stop the cuts

The aim of Statutory PAYGO is to enforce budget discipline, but the automatic spending cuts have never taken effect. Congress has consistently prevented these cuts by either excluding their impact during the initial legislation or by later delaying or eliminating them.

For instance, the Tax Cuts and Jobs Act of 2017 and the American Rescue Plan of 2021 both significantly increased the federal deficit, $1.9 and $2.1 trillion respectively, without triggering automatic cuts under PAYGO because of congressional action.

Time will tell

Congress could act later this year to prevent these cuts, similar to previous years when the PAYGO cuts were triggered. However, unlike the reconciliation bill, removing the impact of legislation from the PAYGO scorecard in the Senate requires 60 votes instead of a simple majority, making it more challenging for the administration due to slim majorities in both chambers.

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According to Fidelity, a 65-year-old retiring in 2024 can expect to spend an average of $172,000 on health care and medical expenses throughout retirement.

Are rising costs and evolving program coverage rules frustrating? Absolutely — that's why we've waded through next year's Medicare changes to help keep you informed and hopefully save you money.

9 Medicare changes to expect in 2026

One key discussion at the beginning of the second Trump administration was which changes made to Medicare by the previous administration would be kept in place or reversed. So far, the Trump administration appears to be staying the course, although with adjustments that better align with its policy objectives.

Certain provisions of the 2022 Inflation Reduction Act (IRA) needed to be codified, or they would have expired. Moreover, the Trump administration didn't follow all of the recommendations of the Biden administration. For example, it initially declined to cover GLP-1 receptor agonists for obesity, a position that had been supported by the previous administration. However, after negotiations to lower prices, it announced plans to cover the GLP-1s in 2026.

Here are the changes coming to Medicare in 2026, including provisions of the IRA, with a few tweaks, that will remain in effect after 2025. Be sure to scroll to the bottom, where you'll find the changes that were recently announced.

1. Prescription payment plan updates

2025 was the first year that the Medicare Prescription Payment Plan (MPPP) enabled those with Medicare prescription drug coverage to spread the costs of their prescription drugs over the calendar year rather than paying in full at the pharmacy counter each time they fill a prescription. Keeping this arrangement just got easier.

Automatic renewal of plan participation. Beginning in 2026, if you participate in the MPPP, you will be automatically re-enrolled the following year unless you opt out. Additionally, a separate renewal notice must be sent after the end of the annual election period, which should include the upcoming terms and conditions of the payment plan.

If you decide to opt out, CMS will require plan sponsors to process opt-out requests within three calendar days, rather than the initially proposed 24-hour timeframe, to reduce administrative burden.

2. Cap on Part D prescription drug expenses indexed for inflation

Many of us are familiar with inflation indexing from our tax returns; every year, certain limits, such as how much you can contribute to an IRA, are adjusted for inflation. However, that doesn't mean it will necessarily change every year; the formula that is applied could result in no change in a given year.

In 2026, the cap on out-of-pocket prescription drug costs is going up to $2,100, a $100 increase over the 2025 limit of $2,000. That means you'll be liable for an additional $100 in drug costs over the year in 2026.

3. Medicare Part D deductible is going up

Far more attention is paid to the Part A ($1,676 in 2025 is going up by $60 to $1,736) and Part B ($257 in 2025, rising by $26 to $283in 2026) deductibles. That is probably because those amounts are set in stone and everyone must pay them, unlike a Part D. Your deductible for your Medicare Part D insurance will depend on the plan you choose. Moreover, the deductible can vary, and you may not have to pay one at all. However, if you are subject to a Part D deductible, there is a maximum that no policy may exceed.

Annual deductible. If your plan has a deductible, you pay 100% of your gross covered prescription drug costs (GCPDC) until the deductible is met. For 2026, that maximum increases to $615, $25 more than the 2025 amount of $590.

You pay all out-of-pocket costs until you meet your plan's full deductible. After that, you’ll pay 25% coinsurance for both generic and brand-name drugs. This continues until your total out-of-pocket spending on covered Part D drugs reaches $2,100 for 2026.

4. Limit on special supplemental benefits for the chronically ill (SSBCI) on Medicare Advantage

Medicare Advantage (MA) plans are known for the extra benefits they provide to their subscribers. Some MA plans offer special benefits tailored to the enrollee's medical condition. The CMS finalized and codified a non-exhaustive list of non-allowable supplemental benefits that are on offer under the Special Supplemental Benefits for the Chronically Ill (SSBCI) category.

In the Final Rule, the CMS adopted the non-exhaustive list of non-primarily health-related items or services that do not meet the standard of having a reasonable expectation of improving or maintaining the health or overall function of the enrollee.

Here is a list of examples of items or services that may not be offered as SSBCI, including all of the following:

• Alcohol
• Tobacco
• Cannabis products
• Non-healthy food
• Life insurance
• Hospital indemnity insurance
• Funeral planning and expenses
• Procedures that are solely cosmetic in nature and do not extend upon Traditional Medicare coverage
• Broad membership programs inclusive of multiple unrelated services and discounts

5. Insulin costs capped

Insulin costs for Medicare beneficiaries were capped at $35 per month or less in 2023, depending on negotiated or maximum fair prices. This cap will now apply annually, beginning in 2026. And watch your benefit statements, as no deductible should be applied to insulin.

For 2026 and each subsequent year, the applicable cost-sharing amount is the lesser of:

• $35
• 25% of the maximum fair price established for the covered insulin product under the Medicare Drug Price Negotiation Program
• 25% of the negotiated price of the covered insulin product under the stand-alone Medicare prescription drug plan (PDP) or MA plan with prescription drug coverage (MA-PD plan)

6. Zero cost-sharing for adult vaccines

Medicare beneficiaries have had access to a limited number of free vaccines since 2023. However, free vaccines are now a permanent feature of Medicare Part D plans. Part D insurers must continue to waive deductibles and cost-sharing for adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP).

The list of free vaccines is updated every year, so just because a vaccine is on the list this year doesn't mean it will be on the list next year.

If you are traveling outside of the country, you may want to consult the CDC's list of recommended vaccinations depending on your destination. We are in the midst of a global Measles outbreak. The CDC suggests that you ensure you are up to date with all your routine vaccines, as "the majority of measles cases imported into the United States occur in unvaccinated U.S. residents who become infected during international travel."

As an extra measure of caution, you can see which countries in the world have reported measles outbreaks before you travel.

7. Prior authorizations for traditional Medicare are coming to six states in 2026

Traditional Medicare, also known as original Medicare, has historically required little in the way of pre-authorization for beneficiaries seeking services; pre-authorization was typically the domain of Medicare Advantage. But that's going to change next year.

This change will go into effect on January 1, 2026, when the CMS starts to use AI to "test ways to provide an improved and expedited prior authorization process relative to Original Medicare’s existing processes, helping patients and providers avoid unnecessary or inappropriate care and safeguarding federal taxpayer dollars," per a CMS press release.

Six states — New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington — will begin using the Wasteful and Inappropriate Service Reduction (WISeR) Model to perform prior authorization evaluations.

Medicare beneficiaries can be assured that AI will not be determining whether a procedure is approved or denied; a human being will be reviewing the information. "... while technology will support the review process, final decisions that a request for one of the selected services does not meet Medicare coverage requirements will be made by licensed clinicians, not machines," CMS explained.

8. Maximum out-of-pocket costs for Medicare Advantage plans decrease

It's unusual to see limits decrease from one year to the next, as most limits usually tick up in the new year. This is the case for Medicare Advantage participants. Unlike tax brackets, a lower number in this case is welcome. In 2026, the annual out-of-pocket limit for in-network services will decrease by $100 from $9,350 in 2025 to $9,250.

The cap on out-of-pocket expenses for out-of-network services has yet to be announced.

9. Medicare to cover weight loss drugs

Initially, the Trump administration decided not to cover GLP-1 weight loss medications prescribed only to treat weight loss in 2026. Cost was a big factor. Medicare currently covers drugs that are used for weight loss, like Mounjaro and Ozempic, but only when they are prescribed by doctors for other reasons, like managing diabetes.

After negotiations with many major drug companies, the Trump administration struck a deal to lower the costs of GLP-1 medications and Medicare to begin covering the weight-loss drugs in 2026. Medicare will pay $245 per month, down from list prices ranging from $1,000 to $1,350.

Beneficiaries will pay a maximum of a $50 copay. Ozempic, Wegovy, Mounjaro and Zepbound will be covered by Medicare.

Review your Medicare plan annually

Every year, Medicare beneficiaries have at least one opportunity to change plans; you can join, switch, or drop a Medicare Advantage Plan or Medicare Part D drug plan, switch to original Medicare, or keep your current coverage. If you've reviewed your options and are satisfied with your current coverage, you don't need to do anything.

Checking your coverage each year is easy and worth your time. Medicare costs, benefits, and providers can change each year. Comparing your options could help you find better coverage or save money. If you need assistance, locate your state SHIP program (State Health Insurance Assistance Program) for unbiased help. They can help you sift through the Medicare Advantage plans available in your area to find the one with coverage that matches your needs.

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The CDC reports that an estimated 129 million people in the U.S. live with chronic illness. And the National Institutes of Health finds that 85% of Americans over 65  years old have at least one chronic health condition, while 60% have at least two.

Having a chronic illness could impact many aspects of your retirement — including your finances and the cost of healthcare as you age. So it’s important to consider your health when making key retirement decisions.

Chronic illness and your Social Security benefits

Claiming Social Security is a key retirement decision all older Americans need to make. But the decision gets trickier when there's a chronic illness to think about.

The general rule of thumb with Social Security is that you'll break even whether you take benefits early, late, or on time as long as you live an average lifespan. But if your health condition is likely to shorten your lifespan, that's something to consider. And it could conceivably make the case for an early Social Security claim.

But Adam Rex, CFP, AIF, and Vice President of Risk Management at Cornerstone Financial Services, cautions that people with chronic illness shouldn't necessarily rush to claim Social Security early.

"A chronic illness can affect your quality of life and expenses, but not necessarily your lifespan," he says. "Waiting until full retirement age, or even age 70, can mean significantly more monthly income down the line — income that’s guaranteed and can really help when other resources start running low."

Rex says Social Security has the potential to be a lifeline for retirees with chronic illnesses, especially since Medicare doesn't cover long-term care.

"We put extra emphasis on making Social Security work as hard as possible," says Rex. "That might mean using other retirement assets earlier on so the client can delay claiming benefits and lock in a higher monthly amount for life. In the later years, when costs tend to go up, that higher income can really make a difference."

Chronic illness and Medicare coverage

Medicare enrollees need to choose their coverage carefully. One of the biggest decisions involves deciding whether to stick with traditional (original) Medicare or sign up for a Medicare Advantage (MA) plan.

When managing a chronic illness, the decision could really go either way, says Nicole E. Asher, CFP®, CPWA®, ChFC, senior vice president, senior wealth management adviser at Greenleaf Trust.

"Medicare offers specific programs and plans designed to support individuals with ongoing health conditions," Asher explains. One option is Chronic Care Management, which provides added support for enrollees who are managing multiple chronic conditions. The conditions that may qualify are broad, including cancer, fibromyalgia and bipolar disorder, to name just a few.

That said, several Medicare Advantage plans offer Special Needs Plans tailored to individuals with chronic conditions. These plans offer disease management programs and access to specialists within different provider networks. The definition of "chronic disease" may be more limited in an MA plan than in traditional Medicare.

Asher says it's important to compare your plan choices and costs, either alone or with the help of a Medicare benefits counselor. You may find that sticking to traditional Medicare plus a Medigap plan gives you access to more providers with fewer restrictions. But with the right Medicare Advantage plan, you may find that you're able to manage your condition effectively without too much expense or hassle.

Chronic illness and managing your savings

Retirees are advised to withdraw from their savings carefully to ensure that their money lasts as long as it needs to. When you're managing a chronic illness, you may be torn between a desire to spend your money early on in retirement while your health still allows you to do the things you've always wanted versus reserve funds for later-in-life care.

Rex cautions that people with chronic illness could see their medical expenses rise over time, so retirement plan withdrawal rates have to be determined carefully. You may also need to be prepared to build in some flexibility and adjust your withdrawal rate based on what your healthcare costs look like from year to year.

Asher, too, says that if you're living with chronic illness, it's important to think about how your condition could impact your future expenses. Specifically, she advises, think about whether your illness will require ongoing treatments or specialized equipment down the line.

You may also reach a point where you require home modifications due to your condition, or a home health aide to manage daily activities. These are expenses to build into your budget and withdrawal strategy to help ensure that there’s enough money to pay for the things you need.

“While the idea of living for the moment and enjoying your savings while you can is understandable, especially if you’re facing health challenges, it’s equally important to plan for a full, potentially long life,” Asher insists.

Chronic illness: the definition matters

If you're new to the world of chronic illness, here's a quick primer on how different conditions are defined. Each type involves a different kind of medical benefit.

"Chronic illness" is a catch-all phrase referring to a disease, syndrome or disorder that lasts at least a year and has no cure, but may be managed. We use the term "chronic illness" here to mean a host of conditions that affect your ability to function, but may or may not leave you disabled. You may not even have the benefit of a diagnosis, but feel limited by illness. So, chronic illness is your perception of disease rather than a medical term.

"Chronic disease" is often used interchangeably with "chronic illness," but the term may have a more exact meaning depending on the institution using it, such as Medicare. Most specify that the patient must have a specific diagnosis, be ill for at least a year and require ongoing care or treatment. A chronic disease may or may not lead to disability.

"Disability" is distinct from a chronic illness or disease in that it leaves you unable to work; it is more precise and carries legal weight. One must apply for "disabled" status for additional benefits. Social Security defines disability as "the inability to engage in any substantial gainful activity (SGA)" due to a diagnosable physical or mental impairment that lasts at least 12 months or that will likely cause death. Meeting that threshold means you can apply for Social Security Disability Insurance (SSDI), even if you already take Social Security retirement benefits.

When you have a chronic illness but don't qualify for disability, you'll need to approach your finances and retirement spending with extra care. And you should document your treatments, diagnoses, medical tests and procedures. If your condition worsens and you want to apply for disability, you will have information to back up your claim.

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The property she is looking to buy needs some work — it’ll take about $100,000 to do everything she wants to do. She asked if I thought it would be a good idea to cash out the 457(b) retirement plan she has in Illinois, which has a value of about $100,000.

I told her I’d strongly advise against her doing so, for a number of reasons, including:

• Her 457 plan has grown on a tax-deferred basis, meaning withdrawals from it will be taxed as regular income. Cashing out the entire account would add $100,000 to her taxable income for 2025.
• The additional income would bump her into a higher tax bracket.
• That higher income would mean she wouldn’t be able to contribute to her Roth IRA.
• And she would face IRMAA on her Medicare.

“What’s IRMAA?” she asked.

I explained it in detail, and she said, “Wow, I never would have thought of that.” We decided on a different course of action to get the funds to do the work on her new property.

My client is not alone in her ignorance of IRMAA. Many people are unaware of the impacts it can have on their monthly cash flow. So, let’s dive into it.

What is IRMAA?

The income-related monthly adjustment amount, known as IRMAA, is a surcharge on your Medicare Part B and D premiums. It's supposed to work in a similar fashion to tax brackets — the more you earn, the more you have to pay.

An IRMAA assessment is based upon your modified adjusted gross income (MAGI) from two years prior. People having to pay the IRMAA in 2025 are doing so based on their income in 2023. In my example above, my client would not experience an IRMAA until 2027 if she had totally cashed out her 457 plan in 2025.

How much is IRMAA?

The surcharge on Part B premiums (outpatient coverage) follows these ranges on 2023 income:

The surcharge on Part D premiums (drug coverage) follows these ranges on 2023 income:

These figures will change from year to year due to inflation, almost always trickling up across the board.

What kind of income counts?

Adjusted gross income is a line item on your tax return and typically consists of wages, non-Roth IRA withdrawals, CD interest, dividends, capital gains and any taxable portion of your Social Security. To get MAGI for IRMAA purposes, you also have to add in non-taxable interest, which is most commonly that from municipal bonds.

As Roth conversions have been a popular tax-mitigation strategy as of late, it is wise to be mindful of how much you're converting so as to not raise your taxable income above the IRMAA thresholds in conjunction with any "regular" IRA distributions. This is because any amount converted from a traditional IRA to a Roth IRA counts as taxable income for that year.

Conversely, income from life insurance, whether you received a large lump sum from a death benefit or drew an income stream from the cash value of a permanent life policy, generally will not count toward the IRMAA, as by and large it is tax-free income.

Can anything be done once an IRMAA is assessed?

You can appeal the IRMAA using Form SSA-44, titled Medicare Income-Related Monthly Adjusted Amount - Life Changing Event.

There can be many reasons an IRMAA assessment could be potentially waived. Considering IRMAA is based upon income from two years prior, many Medicare beneficiaries no longer have the same level of income due to them retiring during those two years.

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Perhaps they sold a rental property, which not only would reduce their income, but could also be a "one-off" source of income.

Perhaps a spouse passed away, or there was a divorce in the past two years that led to a loss of spousal income.

It's also important to remember that an IRMAA is not necessarily permanent. If someone had a windfall in a given year but not the following year, the IRMAA could go away or be reduced.

How is IRMAA paid?

IRMAAs for Part B and Part D are paid separately. Part B's surcharge is automatically added to your monthly premium, and Part D's is paid directly to Medicare.

It’s important to note that this charge is not paid to the drug plan. Part D must be paid by the Medicare beneficiary even if a third party typically pays their Part D premium. Medicare will send a bill each month for Part D IRMAA, which can be paid via any of the same methods as Part B premiums are paid, such as being deducted from your Social Security payment.

If you are delaying your Social Security benefits while receiving Medicare, Medicare would send you a bill for the IRMAA each month.

In summary, if you are a higher-income earner, have a lot of investment income and/or come into possession of a large sum of taxable money as a “one-off” in a given year, be prepared for the possibility of your Medicare insurance premiums to rise in the future.

Working with a financial adviser when planning for retirement can help you be prepared for IRMAA, allowing you to put strategies in place to avoid any surprises.

Update: Some details in the "How is IRMAA paid?" section have been updated.

Related Content

• You Can Appeal the IRMAA for Medicare Parts B and D
• Three Medicare Changes on the Horizon for 2025
• What You’ll Pay for Medicare in 2025
• How a Roth Conversion Can Spare You From Medicare’s IRMAA and Taxes
• Health Care Costs in Retirement: Budgeting for a Healthy Future

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.