Medicare plans can change from year to year
Benefits may increase or decrease. Premiums, deductibles, copays, provider networks, and prescription drug coverage can all change.
This is common with Medicare Advantage plans and Medicare Part D prescription drug plans. Every year, insurance companies review their plans and decide whether to continue offering them, revise their benefits, move members into a different plan, or discontinue a plan entirely.
For some people, the changes may be minor.
For others, the plan they have relied on for years may no longer be available beginning January 1, 2027.
If that happens to you, it does not mean that Medicare is going away. It means that your private Medicare plan is changing or ending, and you will need to review your options carefully.
Medicare Is Not Going Away
The first thing to understand is that Medicare itself is not disappearing.
If you are enrolled in Medicare Part A and Part B, you have Original Medicare. Your Part A and Part B coverage remains in place as long as you remain eligible and continue paying your Part B premium.
Original Medicare has been serving Americans since 1965.
Your Medicare coverage is not being terminated simply because a Medicare Advantage plan or prescription drug plan is ending.
What may change is the private plan you selected to receive your Medicare benefits.
The Difference Between Original Medicare and Private Plans
It is important to understand the difference between Original Medicare, Medicare Supplement insurance, Medicare Advantage, and Part D prescription drug plans.
Original Medicare: Part A and Part B
Original Medicare includes Medicare Part A and Medicare Part B.
Part A generally helps cover inpatient hospital care, skilled nursing facility care under qualifying circumstances, hospice care, and some home health services.
Part B generally helps cover doctor visits, outpatient care, preventive services, diagnostic testing, medical equipment, and many other outpatient services.
Original Medicare is not a one-year insurance policy.
If you remain eligible for Medicare and continue paying your Part B premium, your Part A and Part B coverage remains in place.
Medicare Supplement Plans: Medigap
Medicare Supplement insurance, commonly called Medigap, works alongside Original Medicare.
Plans such as Plan G, Plan N, and, for those eligible, Plan F, are designed to help pay certain Medicare-approved out-of-pocket costs.
A Medicare Supplement policy can generally remain in force for life as long as you continue paying the premium and the insurance company continues doing business in your state.
The premium may change over time.
However, the standardized benefits of your Medigap plan letter do not change simply because a new calendar year begins.
For example, if you have a Medicare Supplement Plan G, the core standardized Plan G benefits remain the same even if the premium changes.
Medicare Advantage Plans: Part C
Medicare Advantage plans are also called Medicare Part C plans.
These plans are offered by private insurance companies that contract with Medicare.
A Medicare Advantage plan replaces the way you receive your Part A and Part B benefits. Many plans also include Part D prescription drug coverage and additional benefits such as dental, vision, hearing, fitness programs, transportation, over-the-counter allowances, or Part B premium givebacks.
However, Medicare Advantage plans are offered on a year-to-year basis.
That means the insurance company can choose to continue the plan, change the plan, combine the plan with another plan, reduce its service area, or terminate it entirely for the next calendar year.
Medicare Part D Prescription Drug Plans
Stand-alone Medicare Part D plans are also offered by private insurance companies.
Like Medicare Advantage plans, Part D plans can change each year.
A Part D plan may change its premium, deductible, formulary, drug tiers, pharmacy network, copays, quantity limits, prior authorization requirements, or preferred pharmacy rules.
In some cases, a Part D plan may no longer be offered in your area for the following year.
What Insurance Companies Can Do
Private insurance companies offering Medicare Advantage and Part D plans have several options each year.
They may decide to continue a plan with little or no change.
They may decide to change the plan’s premium, benefits, copays, coinsurance, provider network, prescription drug formulary, service area, or maximum out-of-pocket amount.
They may decide to consolidate a plan and move members into another plan offered by the same company.
They may also decide to terminate a plan entirely or stop offering plans in certain counties.
These decisions can affect Medicare beneficiaries across the country. They can be especially disruptive for people who have developed relationships with doctors, specialists, hospitals, pharmacies, and treatment facilities that may not participate in another plan.
Why Medicare Advantage and Part D Plans Are Changing
Medicare Advantage and Part D plans are affected by changing healthcare costs, prescription drug expenses, government payment rules, quality ratings, provider contracts, and competition among insurance companies.
Several factors can lead carriers to revise or discontinue plans.
Higher Healthcare Utilization
Healthcare utilization refers to how often people use medical services.
When more people need hospital care, surgeries, specialist visits, rehabilitation, diagnostic testing, outpatient procedures, or expensive medications, the cost of providing coverage can increase.
Some people delay care while they are working and covered by an employer health plan with a high deductible or high out-of-pocket costs.
Then, after enrolling in Medicare, they may move forward with needed care such as cataract surgery, knee replacement, hip replacement, rotator cuff surgery, cardiac care, or other treatment.
When utilization increases, insurance companies may adjust their plan offerings to manage costs.
Changes in Medicare Payments
Medicare Advantage insurance companies receive payments from Medicare to provide Medicare-covered benefits to their members.
Those payments can be affected by changes in Medicare policy, risk adjustment formulas, healthcare costs, and the health needs of the members enrolled in the plan.
If an insurance company believes that a plan is no longer financially sustainable in a particular county or market, it may reduce benefits, change the network, raise cost sharing, consolidate plans, or discontinue the plan.
Star Ratings and Quality Measures
Medicare evaluates Medicare Advantage and Part D plans using quality and performance measures.
Plans receive Star Ratings ranging from one star to five stars.
Higher-rated plans may receive additional funding or quality bonuses. Those funds can help support plan benefits, lower premiums, and supplemental benefits.
When a plan’s Star Rating declines, the insurance company may receive less funding. That can affect the plan’s ability to offer certain benefits or maintain the same plan design.
Part D Prescription Drug Changes
Medicare Part D has gone through significant changes in recent years.
The Inflation Reduction Act changed how prescription drug costs are shared among Medicare, prescription drug plans, drug manufacturers, and beneficiaries.
For 2027, the standard Part D deductible is expected to increase to $700.
The annual Part D out-of-pocket threshold is expected to increase to $2,400 for covered medications.
Once you reach the annual out-of-pocket threshold for covered Part D drugs, you will generally pay $0 for covered medications for the rest of that calendar year.
These changes can be especially helpful for people with very expensive prescription drugs.
However, they can also affect how Part D plans design their formularies, premiums, pharmacy networks, drug tiers, and utilization-management rules.
Competition and Supplemental Benefits
Medicare Advantage plans have become highly competitive.
Many plans have added benefits beyond traditional medical coverage, including dental, vision, hearing, fitness memberships, over-the-counter cards, transportation assistance, meal benefits, and Part B premium givebacks.
These benefits can be valuable.
However, they can also be expensive for insurance companies to provide.
As costs rise and funding changes, carriers may reduce or eliminate certain benefits, increase copays, narrow provider networks, or revise their plan offerings.
How Plan Changes Can Affect You
If your Medicare Advantage plan or Part D plan changes significantly, you may need to make a new coverage decision.
If your plan is terminated, you will need to select another coverage option for 2027.
This can create several challenges.
Provider Network Changes
Your doctor, specialist, hospital, rehabilitation facility, home health provider, or treatment center may no longer be in-network under a replacement plan.
This is especially important if you are receiving ongoing care or have a strong relationship with a doctor or specialist.
A plan may also change from a PPO to an HMO.
A PPO usually gives you more flexibility to receive care outside the network, although out-of-network costs can be higher.
An HMO generally requires you to use the plan’s provider network except in emergency or urgent-care situations.
If your plan changes from a PPO to an HMO, you may have fewer providers available to you.
Prescription Drug Changes
Your medications may be covered this year but treated differently next year.
A drug may move to a higher tier. A new deductible may apply. A plan may require prior authorization, step therapy, or a quantity limit.
In some cases, a plan may remove a medication from its formulary or change the pharmacies that offer the best pricing.
Before selecting a plan, verify that each medication you take is covered and that the pharmacy you prefer is in-network.
Treatment Continuity Issues
A plan change can be especially difficult if you are in the middle of treatment.
You may be undergoing cancer treatment, cardiac care, rehabilitation, physical therapy, dialysis, home health care, surgery planning, or another ongoing medical process.
Before choosing a new plan, make sure you understand whether your current doctors, facilities, treatments, and medications will be covered.
Do not wait until the last minute if you have important healthcare needs.
Financial Changes
A plan can remain available but still become more expensive to use.
Your monthly premium may increase.
Your primary-care, specialist, hospital, ambulance, outpatient surgery, rehabilitation, diagnostic-testing, or emergency-room copays may increase.
A service that had a flat copay this year may require coinsurance next year.
Your maximum out-of-pocket amount may also change.
The maximum out-of-pocket amount is the most you would pay for covered Part A and Part B services during the year under your Medicare Advantage plan. Once you reach that limit, the plan generally pays the full cost of covered Medicare services for the rest of the calendar year.
However, that amount resets each January.
It is important to remember that your Medicare Advantage maximum out-of-pocket amount does not include your Part D prescription drug costs.
Your Options if Your Plan Is Ending
If your Medicare Advantage or Part D plan is ending, you have options.
The best option depends on your health, doctors, medications, budget, travel needs, and ability to qualify for other coverage.
Choose Another Medicare Advantage Plan
You may be able to enroll in another Medicare Advantage plan available in your county.
You can compare plans from the same insurance company or from other carriers.
Before enrolling, compare:
– Your doctors and hospitals
– Your prescription drugs and pharmacies
– Monthly premium
– Primary-care and specialist copays
– Hospital and outpatient cost sharing
– Maximum out-of-pocket amount
– PPO versus HMO structure
– Prior authorization requirements
– Dental, vision, hearing, and other supplemental benefits
Do not choose a plan based only on the premium or extra benefits.
A plan with a $0 monthly premium may still have high copays, a narrow provider network, costly prescription coverage, or a high maximum out-of-pocket amount.
Return to Original Medicare
You may decide to return to Original Medicare.
Original Medicare includes Part A and Part B.
With Original Medicare, you can generally receive care from any doctor or hospital in the United States that accepts Medicare and is accepting new Medicare patients.
If you return to Original Medicare, you will usually need to enroll in a stand-alone Part D prescription drug plan if you want outpatient prescription drug coverage.
You may also want to consider a Medicare Supplement plan to help with Medicare-approved out-of-pocket costs.
Consider a Medicare Supplement Plan
A Medicare Supplement plan works with Original Medicare.
It can help pay certain Medicare-approved deductibles, copays, and coinsurance amounts, depending on the plan you select.
However, moving from Medicare Advantage to a Medicare Supplement plan may require medical underwriting in many states.
That means the insurance company may ask health questions, review medications, and decide whether to approve your application.
There are situations where you may have a guaranteed-issue right to buy certain Medicare Supplement plans without medical underwriting.
For example, if your Medicare Advantage plan leaves Medicare or stops serving your area, you may have a time-limited right to apply for certain Medicare Supplement coverage without being denied because of your health.
Keep every letter and notice you receive if your plan is ending. You may need those documents to show that you qualify for a guaranteed-issue right.
Before leaving a Medicare Advantage plan to apply for a Medicare Supplement policy, it is wise to understand whether underwriting will apply and whether you can qualify for the coverage you want.
Important Medicare Enrollment Periods
Medicare gives you certain enrollment periods to change coverage.
Annual Enrollment Period
The Annual Enrollment Period runs from October 15 through December 7 each year.
During this period, you can:
– Join a Medicare Advantage plan
– Switch from one Medicare Advantage plan to another
– Leave Medicare Advantage and return to Original Medicare
– Join, switch, or drop a Part D prescription drug plan
Changes made during this period generally take effect on January 1 of the following year.
Medicare Advantage Open Enrollment Period
The Medicare Advantage Open Enrollment Period runs from January 1 through March 31 each year.
This period is only for people who are already enrolled in a Medicare Advantage plan.
During this period, you can make one change.
You can switch to another Medicare Advantage plan or return to Original Medicare.
If you return to Original Medicare, you can also enroll in a stand-alone Part D prescription drug plan.
You cannot use this period to move from Original Medicare into a Medicare Advantage plan.
Special Enrollment Periods
If your Medicare Advantage plan ends, leaves Medicare, or stops serving your area, you may qualify for a Special Enrollment Period.
A Special Enrollment Period gives you additional time to choose a new Medicare Advantage plan, return to Original Medicare, or enroll in a Part D plan.
The exact timing and options depend on your specific situation and the reason your plan is ending.
How to Read Your Annual Notice of Change
Every fall, Medicare Advantage and Part D plan members receive an Annual Notice of Change, commonly called an ANOC.
This notice explains what will change in your coverage beginning January 1.
Read your ANOC carefully as soon as it arrives.
Pay close attention to changes in:
– Monthly premium
– Deductible
– Copays and coinsurance
– Maximum out-of-pocket amount
– Doctors and hospital network
– Prescription drug formulary
– Drug tiers
– Pharmacy network
– Prior authorization rules
– Quantity limits and step therapy
– Dental, vision, hearing, and over-the-counter benefits
– PPO or HMO plan structure
Your ANOC is one of the most important documents you will receive during the Medicare enrollment season.
Five Steps to Take Before Choosing a Plan
1. Read Your ANOC Carefully
Do not set it aside.
Review every change your current plan is making for the upcoming year.
If your plan is ending, keep the non-renewal notice in a safe place.
2. Make a List of Your Healthcare Needs
Write down every doctor, specialist, hospital, rehabilitation center, pharmacy, and medication that matters to you.
This list will help you compare plans based on what you actually use.
3. Compare More Than Premiums and Perks
A low premium can be appealing.
Dental benefits, over-the-counter cards, fitness memberships, and Part B givebacks can also be attractive.
But those benefits should not be more important than your access to doctors, hospitals, medications, and affordable medical care.
Always review your maximum out-of-pocket amount and your expected copays before enrolling.
4. Understand Both Medicare Paths
You may have two primary Medicare paths to consider.
The first path is Medicare Advantage.
The second path is Original Medicare, a stand-alone Part D plan, and possibly a Medicare Supplement plan.
Neither path is automatically best for everyone.
The right choice depends on your healthcare needs, provider preferences, prescriptions, travel habits, budget, and ability to qualify for Medicare Supplement coverage.
5. Get Help From Someone Who Explains All Your Options
You should never feel pressured to choose a plan quickly.
A good Medicare advisor should explain your options clearly and help you compare both Medicare Advantage and Medicare Supplement coverage when appropriate.
The goal should be to find the coverage that fits your needs, not simply the coverage that pays the highest commission.
The Bottom Line
Medicare is not going away.
However, Medicare Advantage and Part D prescription drug plans can change, consolidate, reduce benefits, revise provider networks, or terminate from one year to the next.
If your plan changes or ends for 2027, do not panic.
Take the time to compare your doctors, hospitals, medications, pharmacies, expected medical needs, copays, and maximum out-of-pocket costs.
Do not make a decision based only on a $0 premium or extra benefits.
The right Medicare plan is the one that protects your access to care and fits your healthcare needs and budget for the year ahead.
Call Scott if you have questions or need assistance: 512-844-3983