Medicare costs are rising in 2026. Here’s how to save during open enrollment

(NerdWallet) – Nearly two-thirds (64%) of Americans believe Medicare benefits will be cut under the current administration, according to a recent NerdWallet survey. For some, benefit cuts could come as early as next year — with a big price tag.

Medicare Part B premiums are projected to increase by $21.50 to $206.50 next year — one of the largest premium increases in Medicare history, according to the Medicare Trustees. Medicare Part D prescription drug plan premiums could increase by as much as $50, up from the $35 cap set by the government last year. And many large private insurers are scaling back their Medicare offerings or exiting the market entirely due to lack of profitability.

Consumers have one major defense against rising costs, shrinking provider networks and disappearing benefits: Medicare’s collapsing open enrollment period. From October 15 to December 7 each year, you can add, drop, or change Medicare plans.

“This is the most important open enrollment period in Medicare’s 60-year history,” said Melinda Coffill, co-founder of 65 Inc., which provides Medicare guidelines. “Everyone should review their plans.”

Here’s a Medicare Open Enrollment Checklist to help you review your plan and compare your options this fall.

1. Read your annual change notice carefully

Medicare enrollees should have received an Annual Notice of Change (ANOC) in the mail in September detailing changes to their plans for the upcoming year. Note any changes to your plan:

• Premium
• deductible
• Copays and coinsurance.
• Out of pocket maximum.
• Provider networks and service areas.
• Prescription drug coverage and pharmacy networks.
• Medical facilities.
• Other Benefits

2. Make sure your prescription drugs are still covered and affordable

Carolyn McClanahan, a physician and certified financial planner (CFP), says the biggest mistake seniors can make is not reviewing their prescription drug coverage. “A lot of people let it coast, and their drugs may not be on the formulary or the cost has gone up,” McClanahan says.

Don’t rely on your ANOC alone. Caughill urges consumers to visit their insurance company’s website and look for their drugs on the plan’s new formulary, or list of covered drugs. Medicare prescription drug plans come with a $2,100 cap on out-of-pocket costs in 2026, a cap that applies only to covered drugs. If the drug you need isn’t covered by your plan, it can easily wipe out your savings.

Even if your drugs are covered, they may be at a different cost-sharing level, Coghill warns. For example, a drug that comes with a $10 copay this year may jump to a 25% coinsurance next year. If the retail price of that drug is $1,000, your cost will be $10 to $250. “Plans that work this year may not work at all for you next year,” Coffill says, so you may want to compare your coverage with other Medicare prescription drug plans.

3. If you are on Medicare Advantage, verify that your doctors and hospitals are still in network.

“The wild card in Medicare Advantage is the plan network,” Coghill says, because they can change at any time. If your medical provider is suddenly dropped from your plan’s network, you’ll either have to find a new one or face higher out-of-network costs. And as insurers scale back their offerings, the areas your plan serves may shrink.

On top of that, preferred provider organization (PPO) plans, which give enrollees more freedom to see out-of-network providers, are being phased out by some insurers. Check with your primary care doctor and any specialists or hospitals you plan to visit and make sure they are in your plan’s network for the next year.

4. Look at the special benefits and prioritize long-term financial security

Rising costs may tempt seniors to enroll in Medicare Advantage plans that offer lower premiums and additional benefits such as dental allowances and gym memberships. But McClanahan cautions against trying to save money this way.

Premiums are often lower because the plan limits who you can see and where you can get care. Your doctor can drop your plan at any time, and you won’t be covered for certain services if you can’t get prior approval. “You can shoot yourself in the foot down the road if you get sick and you need better care,” she says.

When it comes to the extras offered by Medicare Advantage plans, Caughill doesn’t recommend letting them be a deciding factor. “They’re like sprinkles,” she says. “The reason some of us have health insurance is because of cancer, stroke, heart attack, chronic condition, car accident.” Make sure you have enough coverage for those things “before the splurge” and prioritize keeping your deductibles and maximum out-of-pocket costs low.

5. When the big changes hit, consider going back to original Medicare

If you’re on Medicare Advantage and your plan ends or moves out of your area, you may want to consider switching to Original Medicare and getting a Medicare supplement insurance or Medigap plan.

Medigap plans help cover out-of-pocket costs, which are unlimited in original Medicare. “You should never be on traditional Medicare without a Medigap plan,” McClanahan says, because it exposes you to higher financial risk.

If you miss signing up for Medigap when you join Medicare, you’re often subject to medical underwriting, which can make it difficult to get an affordable policy. But some significant changes, such as when your Medicare Advantage plan stops or no longer works in your area, temporarily give you “guaranteed issue rights.” This means Medigap insurers cannot deny you or charge you more because of your health.

Once you’ve reviewed your plan changes, you can use the Medicare Plan Finder tool on Medicare.gov to compare options and determine whether changing Medicare plans makes financial sense. If you decide to switch, enroll in your new plan by the December 7 deadline.