It’s always a good idea to do a checkup on your Medicare coverage this time of year. But it’s especially important this year, during the annual fall enrollment period that got underway Thursday.
Changes in Part D prescription drug and Medicare Advantage plans will make for greater-than-usual disruption for 2027.
Premiums and other costs for Part D plans will rise sharply for some people. The number of Medicare Advantage plans is falling in some parts of the country, and some will increase cost-sharing and reduce supplemental benefits such as dental care. And expanding coverage of GLP-1 drugs will come with complications that may be difficult to navigate.
“The stakes this year may be higher for people who don’t compare plans during the open enrollment period,” says Juliette Cubanski, vice president and director of the program on Medicare policy at KFF, the health care research nonprofit. “You could definitely be leaving more money on the table.”
If you are enrolled in Medicare Parts A and B, there is no need to revisit that coverage during the annual enrollment period that runs from Oct. 15 through Dec. 7.
For the checkup, start by reviewing any changes in your current coverage. Part D and Advantage plan providers are required to send an Annual Notice of Change document each fall. You’ll learn if the monthly premium, annual deductible and coverage of drugs will change for the coming year. Medicare Advantage plans that include drug coverage also must notify you of changes, along with revisions to their provider networks.
Part D plans
The market for prescription drug plans, or Part D, is changing in the wake of Biden-era legislation that improved coverage by adding an annual out-of-pocket cap on drug spending. The changes, contained in the Inflation Reduction Act of 2022, have given thousands of dollars in relief to beneficiaries who take expensive drugs for conditions like cancer and multiple sclerosis, and have provided seniors greater predictability in planning their health care spending. In 2027, the cap is $2,400 (the maximum deductible will rise to $700, from $615 this year).
Anticipating higher premiums and deductibles as insurance companies adjusted to the cap, the Biden administration offered a temporary program designed to offset premium increases by subsidizing drug plans. The Trump administration ended those subsidies for 2027, prompting concerns that people’s costs would soar.
Many enrollees will see premiums fall or increase only modestly if they keep their current plans, according to analysis by KFF, the health care research nonprofit. But some will face substantially higher premiums.
Among the largest increases are United Healthcare’s AARP-branded plans, which enroll more than two million people. Monthly premiums for AARP Medicare Rx Preferred will rise by $50 or more in all 50 states and the District of Columbia — and the increase will be more than $75 in 37 states. AARP Medicare Rx Saver will raise premiums by $50 or more in 33 states.
“We’re talking about plans that might cost you $1,000 or more over the course of a year for a drug plan that might not be much different from other offerings in the market,” Dr. Cubanski said. “It’s hard to understand why somebody would want to pay that much more.”
Four million seniors were enrolled in zero-premium drug plans this year, but those are disappearing — expect to pay $10 or less per month if you stay in one of these plans. But even if you’re in one of these low-premium plans, there could be other changes that affect your access to medications. The plan might be reducing the number of drugs that it covers, or your share of a prescription’s cost.
Medicare Advantage
A rising number of plan cancellations and higher costs will affect the market for Medicare Advantage plans next year.
A New York Times analysis found a sharp rise in disruption as insurers shut down plans they viewed as unprofitable. Roughly five million Advantage enrollees, or 14 percent, will be forced to change coverage. In some rural counties, no plans will be offered. Some of the extra benefits Advantage offers will be pared back, including dental, vision and hearing coverage. Out-of-pocket limits also are expected to rise in many plans.
Overall satisfaction with Medicare Advantage plans has fallen sharply over the past two years, according to a survey of plan members by JD Power.
The reported problems include smaller networks and problems finding health care. “What we’re seeing is concerns around costs, provider access and trust,” said Meaghan Hafner, senior director of health care solutions at JD Power.
Mary Beth Donahue, president and chief executive of Better Medicare Alliance, a Medicare Advantage research and advocacy group, noted that its own surveys show high levels of enrollee satisfaction with the program. But she cited cuts in federal payments to plan sponsors as a cause for declining satisfaction. “It’s impacted premiums and out-of-pocket costs, and we’re definitely now seeing it affect benefits.”
Can you leave Advantage for traditional Medicare?
You can switch between Medicare Advantage and traditional Medicare during the annual enrollment period. (You also can make this move, or switch Advantage plans, during the Medicare Advantage Open Enrollment period from Jan. 1 through March 31).
But don’t leave Advantage for traditional Medicare without first confirming that you will be able to obtain supplemental coverage.
There is no annual out-of-pocket limit in traditional Medicare for outpatient and hospitalization services. Protection for it is available from supplemental insurance coverage. Some retirees get this from former employers, unions or Medicaid, but most often it means purchasing what’s known as Medigap — a policy offered by private insurance companies that covers part or all of the portion Medicare requires you to pay.
The best time to buy a Medigap plan is when you first sign up for Part B, which covers doctor visits and outpatient care. That’s when Medicare forbids Medigap plans from rejecting you, or charging a higher premium, if you have a pre-existing condition. This is referred to as “guaranteed issue,” and the opportunity is available to you during your six-month Medigap Open Enrollment Period, which starts on the first day of the month in which you’re 65 or older and enrolled in Medicare Part B.
After this period ends, Medigap plans in most states can reject applications or charge higher premiums because of pre-existing conditions, with the exception of four states that protect Medigap applicants beyond the guaranteed issue period (Connecticut, Maine, Massachusetts and New York).
Medigap plan providers can require medical screening before agreeing to cover you, so shop a few plans before leaving Advantage.
If your Advantage plan is canceled for next year, that affords you a guaranteed issue right to purchase a Medigap policy if you choose to switch to traditional Medicare.
GLP-1 changes
Medicare coverage of GLP-1 drugs will become more complicated in 2027. Coverage of Wegovy, a GLP-1 drug for cardiovascular conditions, will expand significantly. Separately, the Medicare GLP-1 Bridge pilot program that began this year to cover some GLP-1 drugs for obesity continues through the end of 2027.
The Bridge program covers drugs only for weight management, and it is separate from Part D. Patients pay $50 monthly for their drugs, but that payment does not count toward their Part D deductible.
Wegovy already was approved by Medicare for Part D coverage for cardiovascular conditions, but few plans had covered it. In 2027, all Part D plans must cover Wegovy.
As a result, patients will face a complex patchwork of GLP-1 coverage next year. In Part D and Medicare Advantage plans, they will pay according to their plan’s deductible and cost-sharing rules. Comprehensive information on Wegovy coverage won’t be available until later in October, but KFF notes that if it resembles coverage of its brand-name counterpart, Ozempic, this year, most plans will probably place Wegovy on a preferred brand tier, with more people paying a percentage of the cost (known as coinsurance) rather than a flat dollar amount (co-payment).
Another complication: Patients who already have had a GLP-1 prescription through a Part D plan are not eligible to participate in the Bridge program.
“My worry is that there’s going to be confusion among both patients and health care providers,” says John Batsis, a geriatrician and associate professor of medicine at the University of North Carolina at Chapel Hill.
How to shop for your coverage
The federal Medicare Plan Finder is the place to start comparing drug or Advantage plans. Check your online profile to make sure your list of medications is current. You’ll see premiums and total projected annual costs, including deductibles and out-of-pocket costs. This year, the plan finder’s Advantage listings have been upgraded: Beneficiaries can type in the name of any licensed health care provider — not just doctors, which was the case last year — and find which Advantage plans they accept.
Advantage plan directories have a track record of inaccurate listings, so it’s best to confirm directly with your health care providers that they are participating in any Advantage plan that you are considering.
Independent insurance brokers are knowledgeable about the products they represent, but they don’t represent every plan. What’s more, commission structures can create financial incentives that favor Advantage plans over Part D and Medigap.
“It’s hard to know if brokers are always acting in the best interest of the beneficiary, or if their steering is based on where they’re going to get the best commission,” says David J. Meyers, an associate professor at Brown University who studies payment and delivery reform in Medicare. “It might not be a bad option, but it’s not an unbiased option for the beneficiary.”
Every state has a State Health Insurance Assistance Program, which offers free, unbiased guidance on plan selection.
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