Could you pay less for Medicare next year? What to review during open enrollment

They say what goes up must come down, but that rarely seems to be the case with healthcare costs. Here’s some good news: If you’re on Medicare, there are a couple of ways you might be able to buck the trend and keep more of your money.

During the Medicare annual enrollment period, which runs from mid-October until December 7, you have a chance to change your Medicare choices, and it’s less of a time commitment than you might think.

So, let’s take a few minutes to review just a few key steps you can take to explore your options for the upcoming year.

But first: the annual enrollment period is for people who are already receiving Medicare. If you need to sign up for the first time, see our tips on applying for Medicare.

Here are three simple steps to approach your Medicare AEP:

Step 1: Review next year’s Medicare price changes and your Annual Notice of Change

First things first. Here are the different types of premiums and how to find out what they’ll cost next year:

• Part A (Hospital Insurance): Most people don't pay a premium for Part A if they or their spouse paid Medicare taxes while working. (If you do have to pay for Part A, the 2026 premium amount is either $311 or $565 depending on your work history. Premium costs are adjusted for inflation and next year’s costs will be released by the Center for Medicare Services, usually by mid-November.)
• Part B (Medical Insurance): This amount can vary based on your income; higher-income beneficiaries may be subject to an Income-Related Monthly Adjustment Amount – more on that below. Inflation-adjusted Part B premium amounts will again be released by the Center for Medicare Services by mid-November (and if your premiums come out of your Social Security checks, the new Medicare benefit amount will also be listed on your COLA adjustment notice at the end of the year).
• Part D (Prescription Drug Coverage): Part D premiums vary by plan. Like Part B, Part D premiums can also be subject to an IRMAA, depending on your income. You’ll be notified of Part D premium updates for your plan via an Annual Notice of Change, which must be sent by September 30 each year.
• Medicare Advantage (Part C): These plans are offered by private companies approved by Medicare, and you can select one of them in place of Original Medicare for parts A and B (and often D). Premiums vary depending on the plan and the services it covers, and they’re set by the insurer, not the government. If you have Medicare Advantage, your insurer should have sent you an Annual Notice of Change in September letting you know the new prices for 2027.
• Medigap (also known as Medicare Supplement plans): You can add these to Original Medicare to cover additional types of costs. The cost varies by plan. Medigap plans aren’t included in the Medicare AEP, so the timing of cost adjustments and notifications also varies.

To know how much you’re set to pay for 2027, you’ll need to add together your premiums for Part B plus Part D plus any Medigap coverage, or Part B plus Part C if you have Medicare Advantage (and in either case you’ll also need to add Part A if you’re required to pay for it).

While premiums for Parts A, B, and D aren’t typically released until mid-November for the following year, looking at current premiums can give you a sense of what you might pay next year.

Take a look at the 2025 premiums for parts B and D.

Step 2: Take advantage of the annual enrollment period

You’re not required to do anything at all during the annual enrollment period – if you don’t, your current benefits will continue. But you might be missing an opportunity. Now is the time to find out.

Any changes you make during this period will go into effect on Jan. 1, 2027. That’s also when new 2027 premiums will take effect.

If it will save you money (while – very importantly – still meeting your coverage needs), you can make these changes by Dec. 7:

• Add Part D coverage. Medicare will also allow you to drop Part D, but we generally don’t recommend it because a gap in coverage could lead to future penalties.
• Change Part D coverage to another plan. We recommend you check every year to see whether your current medications will still be covered by your prescription plan, and at what cost. Thanks to the Inflation Reduction Act, out-of-pocket prescription costs now have an annual max ($2,400 in 2027), but the cap only applies to drugs that are covered by your plan. Make sure you consider both premiums and out-of-pocket costs.
• Change from Original Medicare (and Medigap if you have it) to Medicare Advantage, or vice versa.
• Switch Medicare Advantage coverage to another plan. Review your options and compare.

Note that the rules for when and how you can change Medigap plans are complicated and depend on where you live.

Step 3: See if you can appeal your IRMAA

As we said above, an IRMAA is an additional charge that higher-income beneficiaries pay on top of their standard Part B and Part D premiums. Note that, if you have grounds to do so, you can file an appeal to reduce your IRMAA at any time – it doesn’t have to be during annual enrollment. If you think you have grounds to appeal, do it as soon as possible after you receive the IRMAA determination letter. (Or, if you’re already paying an IRMAA, after you experience the life-changing event.)

Here’s how IRMAAs work.

What the Social Security Administration considers

An IRMAA is based on your modified adjusted gross income (MAGI) from two years ago. For example, your 2027 IRMAA will be based on your 2025 income.

Note that MAGI for IRMAA determinations is defined as your AGI plus any tax-exempt interest income.

If you’re subject to an IRMAA, you’ll receive a letter that lets you know your 2027 IRMAA. You’ll add it to the base premium to get your total costs.

Who has to pay it

In 2026, you’d be subject to IRMAA if your 2024 MAGI was above $109,000 (individual) or $218,000 (married couple). The 2027 thresholds will be adjusted for inflation and should be released towards the end of 2026.

When to appeal

If you’ve experienced a life-changing event that reduced your income significantly below the 2025 numbers the SSA is using (projected to be $112,000 or less for individuals; $224,000 or less for married couples), you can appeal your IRMAA determination.

Some common reasons for appeal are:

• Retirement or reduced work hours
• Divorce
• Death of a spouse
• Loss of an income stream, like a property or a pension

Note that you may have had a higher income for a reason that’s not considered a life-changing event. For example, if you had large one-time capital gains in 2025 (like from selling a house), that will not be considered grounds for appeal for 2027. You’ll simply have to pay higher expenses for one year.

How to appeal

File Form SSA-44 with the SSA and provide documentation of the event and your reduced income.

Why it's worth starting early

Don’t wait until December 7. The sooner you review coverage, the more time you'll have to compare plans, evaluate prescription costs and consult with a financial advisor and a Medicare specialist before the enrollment deadline. Keep in mind, Medicare AEP is the busy season for these specialists, so getting an appointment with one may be challenging toward the end of AEP.

Spend less on Medicare in 2027

Taking some time to review your options and get an understanding of the full picture of your costs can help ensure a thoughtful approach to the Medicare annual enrollment period. If you have questions about applying for Medicare or appealing your IRMAA, we’re always here for you.