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Medicare’s annual open enrollment period, the only time that beneficiaries can switch, join, or drop Medicare Advantage or Part D plans for coverage next year, begins on Oct. 15 and runs through Dec. 7.
According to Andrew Shelton of Hollister’s Shelton Insurance, with upcoming premium increases, higher deductible caps, new negotiated drug prices, possible plan drops and benefit reductions, this is a critical time to compare Medicare coverage options.
“I just want to get people started on this and give them a heads up that it’s time and that they should be prepared to probably spend more,” he said. “It is important to know what you’re currently paying as a premium and what your expectations are for coverage next year.”
The core of Medicare is known as Plans A and B, which are run by the federal government, with enrollment starting at age 65.
Part A, which covers basic hospital needs, is automatic at age 65 for people with 40 quarters (10 years) of Medicare tax contributions.
“Think of Part A as the brick and mortar of a hospital,” Shelton said. “It’s the ins and outs of inpatient care, skilled nursing facility care, hospice, and blood transfusions. If you’re 65 and go to the emergency room, the compensation agreement is already set up.”
Though the price changes for Part A will not be announced until early or mid-November, the 2026 Medicare Trustees Report, released in June by the Centers for Medicare & Medicaid Services (CMS), included projected fee changes as follows:
- Inpatient hospital deductible: $1,788, up from $1,736.
- Hospital coinsurance (days 61–90): $447 a day, up from $434.
- Lifetime reserve days coinsurance: $894 a day, up from $868.
- Skilled nursing facility coinsurance (days 21–100): $223.50 a day, up from $217.
These deductibles apply for the benefit period. A new benefit period starts after a 60-day break, so the deductible can apply more than once in a year.
Part B, which has to be joined through Social Security, is medical insurance that covers doctor visits, outpatient medical care, durable medical equipment, and preventive services.
“Any family practice, primary care, or specialists are all going to be covered under Part B,” Shelton said. “It also covers 100% of all of your lab work. Between the two plans, those cover about 80% of all of your medical expenses.”
As with Plan A, the final costs of Plan B have not been announced, but are similarly projected by the CMS to increase as much as $34 a month:
- The standard premium is projected to be $209.50 a month, up from $202.90.
- The deductible is projected to be $292 to $310, up from $283.
The report also predicts that the Plan B premium and deductible will rise substantially—as much as 70%—by the mid-2030s.
Shelton said the 20% of expenses not covered by Plans A and B is where coverage decisions have to be made. For those still on employer plans or with medical benefits through retirement, that option remains open.
For everyone else, Plan C, or Medicare Advantage, delivers benefits through a private managed network like an HMO (Health Maintenance Organization) or a PPO (Preferred Provider Organization).
In April, the CMS released its 2027 Medicare Advantage Policies, which include the following projected changes to Medicare Part C that will be finalized by Oct. 1.
- Overall plan payments will be rising approximately 2.48%.
- Insurers can cut back on plans for dental, vision, hearing, and healthy food allowances.
- New depression screenings have been added.
- Chronic illness supplemental benefits have been tightened.
- Cannabis products illegal under state or federal law are barred from coverage.
- Colorectal cancer screening coverage has been expanded.
- Insurers will be allowed to leave less profitable counties.
That last one complicates things, according to Shelton, as hundreds of thousands of people across the country are losing Medicare Advantage due to “service area reductions,” the euphemism for when companies pull out of a given area.
San Benito County has already been impacted, with the loss of Medicare Advantage plans from insurers like UnitedHealthcare and Blue Cross. According to Shelton, only Imperial remains the consistent Medicare Advantage plan in the area and negotiates directly with local physician associations like San Benito Medical Associates.
“I don’t see anything drastically changing on Medicare Parts A and B,” Shelton said. “The effect will be on Plan C in areas where insurance plans start pulling back a lot of supplemental benefits, like dental care, additional kinds of health screenings and things like that.”
One issue in choosing coverage is making sure a preferred physician works within a given Medicare plan, which is complicated by finding a doctor in the area who is accepting new or transferring patients.
“I’m concerned about the lack of physicians coming to the community,” Shelton said. “We have a physician base where many are pretty close to retirement or working well into their retirement. We’re not bringing new blood to the community, and that’s a big hole that we have.”
Plan D, which covers prescription drug costs, is the only part of Medicare that has finalized rates. These include:
- The standard deductible will increase to $700, up from $615
- The annual out-of-pocket cap for drugs with the plan’s formulary will rise to $2,400, up from $2,100.
“Out-of-pocket establishes how many dollars can come out of the actual fee you pay at the pharmacy annually,” Shelton said. “Even with the deductible, if I’m paying $600 a dose for medicine, I am going to meet my max out-of-pocket effectively by the end of April.”
The cap is a provision of the Inflation Reduction Act, signed by President Joe Biden in 2022. It also provides for a $35 monthly cap on insulin and free recommended vaccines. The Medicare Prescription Payment Plan also remains available, which allows patients to spread out-of-pocket Part D costs, such as the out-of-pocket cap, into monthly payments.
As part of the bill, 10 drugs were added to a negotiated price list in January, in the first round of lowering medication costs. These included drugs for conditions such as blood clots, diabetes, heart failure and rheumatoid arthritis.
Under the second round, starting at the beginning of the year, 15 more drugs are being added, including the weight loss drugs Ozempic, Rybelsus and Wegovy, and the inhaler Trelegy Ellipta, along with cancer drugs and other specialty drugs.
In a move that will raise prices for most enrollees, CMS will be ending the temporary Medicare Part D Premium Stabilization Demonstration program instituted in 2025, one year earlier than planned. The agency estimates that, for most enrollees, premiums will increase by around $10 a month.
Going into the renewal period, Shelton said it is never too early to prepare for what might seem like a bewildering number of choices, including compiling a list of current medications and dosages, and giving serious consideration to current and future medical needs.
With an established Social Security account, people can enroll through the government portal at medicare.gov. Brokers like Shelton Insurance can also help sort through the many options for drug and supplement plans.
“Sometimes people want to talk to a human being,” Shelton said, “and that’s where your broker comes in. We have a good knowledge of what’s available and our style is to put somebody in a plan that might be the last plan they’ll ever need to buy.”
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