aep

AEP 2026: Ten Decisions That Set Your Medicare Costs for the Next Twelve Months

---

Medicare's Annual Enrollment Period for 2026 is open right now, and it closes at 11:59 p.m. local time on December 7. From today, November 11, that leaves 26 days to make choices that will govern what you pay every month for all of 2027. The decisions are narrow but consequential: which drug plan covers your prescriptions, which Advantage plan keeps your doctors in network, and whether last year's income pushes you into a higher premium bracket. What follows is a section-by-section walk through the ten areas where money actually changes hands, each with the governing rule, the 2026 figure, and a worked example you can compare against your own situation.

1. What the 2026 Annual Enrollment Period Actually Decides

The 2026 Annual Enrollment Period opened on October 15 and runs through December 7, 2026. Elections made in this window take effect January 1, 2027, and they hold for the full calendar year unless you qualify for a special enrollment period. Someone with Original Medicare and a stand-alone Part D plan uses these eight weeks for a single decision: which drug plan to carry next year. Someone enrolled in Medicare Advantage uses them for two: whether to stay in Advantage at all, and which plan to select if the answer is yes.

Medigap behaves by different rules, and that difference catches people every fall. A supplement policy is not sold through AEP. You can buy or drop one in any month, but in most states an insurer can ask about your health and decline you, or charge a higher rate, once your one-time six-month Medigap Open Enrollment Period has ended. That window starts the month you are 65 or older and enrolled in Part B, and it lasts six months. Massachusetts, Minnesota, and Wisconsin set their own Medigap rules, so residents there should ask a licensed agent which protections apply. Leave a supplement at 66 to try an Advantage plan, then want it back at 69 after a diagnosis, and guaranteed acceptance is usually gone. That single risk is the reason the stay-or-go question deserves more thought than the premium table.

2. The 2026 Calendar: Which Dates Still Matter

December 7 is the wall. Elections submitted through Medicare.gov count if they are completed before midnight in your local time zone, and telephone enrollments through 1-800-MEDICARE follow the same deadline. An application to join a plan is not complete until the plan receives it, which is why mailing a paper form on December 3 is a gamble and submitting online or by phone is not. Coverage from an AEP election begins January 1, 2027.

December 8 through December 31 is quiet for most people. During that stretch you can still enroll if you qualify for a five-star special enrollment period, which lets you move into a Medicare Advantage or Part D plan rated five stars by Medicare for the coming year, and you can still act if you have a qualifying special enrollment period such as a move, loss of employer coverage, or release from incarceration. Dual-eligible beneficiaries and people who receive Extra Help have additional continuous opportunities. Separately, the Medicare Advantage Open Enrollment Period runs January 1 through March 31, 2027, and it permits exactly one change: from one Advantage plan to another, or from Advantage back to Original Medicare with a Part D plan. It does not allow you to switch stand-alone drug plans. Mark both dates now, because the second one cannot fix a Part D mistake made in the first.

3. Reading Your Annual Notice of Change in Twenty Minutes

By September 30, 2026, every Medicare Advantage and Part D plan had to send an Annual Notice of Change covering the 2027 plan year. The Evidence of Coverage, a longer document, had to be available by October 15. These are the two papers that tell you whether staying put is free or expensive. Open the notice and read four lines: the monthly premium, the deductible, the tier placement of your most expensive drug, and the copay attached to that tier. Then check the pharmacy network page and the prior authorization list.

A worked example makes the stakes concrete. Suppose your 2026 plan charged a $38 monthly premium and placed a diabetes drug on tier 2 with a $47 copay. For 2027 the same plan raises the premium to $54, adds a $615 deductible, and moves that drug to tier 3 with 25% coinsurance on a $600 retail price, which is $150 a month. Twelve months of that shift costs roughly $1,236 more than the old arrangement, and no part of it appears in the premium line a person glances at. The same document will also show whether your pharmacy is still in network; a preferred pharmacy dropping out can add $30 or more per fill. Read the notice with your medication list beside you, not from memory.

4. The $2,100 Part D Cap and How It Really Works

For 2026 the standard Part D benefit caps your out-of-pocket spending on covered drugs at $2,100 for the year, up from $2,000 in 2025. The figure is indexed and will change again. That cap counts what you pay toward covered prescriptions, not your premiums, and it does not count drugs your plan refuses to cover or prescriptions filled outside the network. Once your true out-of-pocket spending reaches the threshold, you pay nothing more for covered drugs for the rest of the calendar year.

Consider a 72-year-old taking two brand-name medications with a combined retail price near $1,400 a month. Under the 2026 design she pays the plan's deductible first, then roughly 25% coinsurance until her cumulative out-of-pocket total hits $2,100, which happens around late April. From May through December she pays $0 for those drugs. Her annual exposure is capped near $2,100 plus premiums rather than the $16,800 the retail price implies. The Medicare Prescription Payment Plan, available through every stand-alone drug plan and most Advantage drug plans, spreads that $2,100 across twelve monthly bills instead of concentrating it in the first four months. Enrolling in that program is a separate opt-in and does not reduce what you owe; it changes the timing. Ask the plan how to elect it for 2027.

5. Negotiated Drug Prices Landed January 1, 2026

The first round of Medicare drug price negotiations took effect on January 1, 2026, when maximum fair prices applied to ten medicines: Eliquis, Xarelto, Januvia, Jardiance, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, and the insulin aspart products sold as Fiasp and NovoLog. A second cycle covering fifteen additional drugs produced prices that apply starting January 1, 2027. These negotiated amounts are what the plan pays at the pharmacy counter, and your coinsurance is calculated from them, so a drug's tier and your cost share can look very different in 2027 than they did two years earlier.

This creates a specific comparison problem. A plan that was expensive for you in 2026 may now be cheap, and a plan that was cheap may have repositioned a negotiated drug onto a higher tier to manage utilization. Your job during this AEP is to price your actual prescriptions against at least three 2027 plans rather than trusting last year's answer. Insulin users should also confirm the $35 monthly cap per insulin prescription still applies in their 2027 plan, and that the specific formulation they inject is on the formulary. Adult vaccines recommended by the Advisory Committee on Immunization Practices remain $0 under Part D. If a drug you take is not on a plan's formulary, ask whether an exception or transition fill applies, and get the answer in writing before December 7.

6. Advantage Plan Turnover and Network Shifts for 2027

Roughly 34 million people, a little more than half of everyone with Medicare, are enrolled in a Medicare Advantage plan heading into 2027. Every year a handful of plans exit specific counties, and every year some enrollees learn this from a letter in early October rather than from a broker. When a plan leaves, you receive a notice of non-renewal and a special enrollment period that lets you pick a replacement. If you ignore both, Medicare generally returns you to Original Medicare on January 1, which can leave you without drug coverage and exposed to the Part D late enrollment penalty.

Network changes matter more than the marketing materials suggest. Pull out your physician list and verify every doctor, specialist, and hospital against the 2027 provider directory, then call the plan and ask whether each one is in network for the full year. A plan can keep a hospital in network while dropping the anesthesia group that staffs its surgery center. Check the maximum out-of-pocket limit, which for 2027 sits above $9,000 in-network at the legal ceiling, and check whether prior authorization now applies to a service you use routinely, such as imaging or cardiac testing. Extra benefits like dental allowances, over-the-counter cards, and transportation credits are worth comparing, but price them honestly: a $1,200 dental allowance you cannot use at your dentist is worth nothing.

7. IRMAA, Extra Help, and the Income Side of the Equation

Medicare's income-related monthly adjustment amount is a surcharge added to Part B and Part D premiums for higher earners. The 2026 brackets are based on your 2024 tax return, which is why a one-time event two years ago can still be raising your premium today. For 2026, the first surcharge threshold begins at $109,000 of modified adjusted gross income for a single filer and $218,000 for a joint return. The standard 2026 Part B premium is $202.90 a month with a $283 deductible, and surcharges stack on top of that. Confirm the exact bracket against the letter the Social Security Administration sends you, since thresholds are indexed each year.

If your income dropped because of a life-changing event such as retirement, divorce, or the death of a spouse, file Form SSA-44 with Social Security to request a new determination. People who never file simply pay the higher amount. On the other side of the ledger, Extra Help through the Low-Income Subsidy reduces Part D premiums and cost sharing for people under roughly 150% of the federal poverty level, about $24,000 for a single person in 2026, with partial help extending to 200%. Many eligible people never apply. If your income is near those lines, the application is worth an hour.

8. Common Mistakes That Cost Real Money in 2026

The most expensive error is assuming your plan renews unchanged. Plans do renew automatically, but their terms do not. Premiums, deductibles, tiers, and networks all reset on January 1, and an auto-renewed plan can cost hundreds more without any action on your part. The second mistake is shopping on premium alone. A $0 premium Advantage plan with a $9,000 out-of-pocket ceiling and narrow network can cost far more than a $60 premium plan if you need a specialist. The third is trusting the January through March Advantage Open Enrollment Period to fix a drug plan error; it cannot, because stand-alone Part D changes are not permitted then.

The fourth mistake is switching from Medigap to Medicare Advantage without understanding that returning later usually requires medical underwriting. The fifth is filling prescriptions at a pharmacy outside the plan's preferred network, which can double a copay with no warning at the counter. The sixth is leaving a drug off your Plan Finder search because it is inexpensive today; a new prescription in February changes the math. The seventh is keeping duplicate coverage, such as an employer retiree drug plan alongside a new Part D policy, which can disqualify you from both. Write your drug names and dosages down exactly as printed on the bottle before you compare anything, and check the plan's formulary for each one by name rather than by category.

9. How to Check Your Own Situation This Week

Set aside one afternoon and gather five things: your Annual Notice of Change, your Evidence of Coverage, a list of every prescription with dosage and quantity, the last twelve months of pharmacy receipts, and the names of every doctor you saw in 2026 along with any hospital you used. With those in hand, go to Medicare.gov and build a saved drug list, entering each medication exactly as written. Compare no fewer than three plans: your current one, the cheapest option the tool returns, and one plan recommended by someone who knows your doctors.

Then verify outside the tool. Call the plan's pharmacy help line and ask what a specific drug will cost at your specific pharmacy in January, because directory data lags. Call your two most important doctors and confirm they accept the plan for 2027. Call 1-800-MEDICARE, which operates around the clock, or your State Health Insurance Assistance Program, where counseling is free and not tied to a commission. If you use a walker, oxygen, or a specialist who is hard to replace, weight network stability above a $20 premium difference. One reader scenario: a 68-year-old in Ohio found her $0 premium plan was dropping her cardiologist for 2027; the replacement plan cost $41 a month and kept him. That $492 a year bought continuity of care.

10. What Happens If You Do Nothing, and How to Undo a Choice

Doing nothing is a decision. Your current plan renews on January 1, 2027, on whatever terms the insurer filed, and your premium is deducted from Social Security automatically. If your plan is leaving Medicare entirely, doing nothing returns you to Original Medicare, where you will owe the Part D late enrollment penalty for each month without creditable drug coverage. That penalty equals 1% of the national base beneficiary premium multiplied by the number of uncovered months, and it is permanent. A twelve-month gap adds roughly 12% to your drug premium for as long as you hold Part D.

You can change your mind during AEP. Elections are not final until December 7; if you enroll in one plan and later choose another before the deadline, the last valid election generally governs, though you should confirm the replacement with Medicare to be certain. After December 7, options narrow to the Advantage Open Enrollment Period, a five-star plan special enrollment period, or a qualifying life event. If you enroll in a Medicare Advantage plan for 2027 and regret it, the January 1 through March 31, 2027 window lets you switch to another Advantage plan or return to Original Medicare with a drug plan, once. That is the safety net, and it is thin.

Medicare's Annual Enrollment Period closes on December 7, 2026, and the choices you make before then carry through the end of 2027. A licensed agent can price your exact drug list against the plans available at your address, confirm your physicians are in network, and put the election in writing before the deadline. There is no cost for that help and no obligation to enroll. Call one this week, while there is still time to compare more than one option.

Get Matched with a Licensed Agent

Want personalized guidance? We'll connect you with a top-rated Aep agent in your area.

Connect with an Agent

Published 2026-11-11 12:13:23.531605+00:00