BLOG

Medicare Annual Enrollment runs from October 15 through December 7. Whatever you decide during that window takes effect on January 1 and generally stays in place for the full year.

That is a short window for a decision that affects both your healthcare and your budget. And it is easy to let it pass, because doing nothing feels like the safe choice. Most plans renew automatically, so no action still produces an outcome.

The problem is that the plan renewing in January may not be the plan you signed up for. Here is what actually changes each year, and what is worth reviewing before the deadline.

What Actually Changes Each Year

Your plan is required to send an Annual Notice of Change by September 30 each year, describing what will be different in the coming year. It is the single most useful document you will receive, and it is also the one most likely to go unopened.

Four things commonly change:

• Drug formularies. Plans revise which medications they cover and what tier each one sits on. A prescription that was inexpensive this year can move to a higher tier, require prior authorization, or come off the list entirely.
• Provider networks. Doctors, specialists, and hospitals join and leave networks every year. This matters most with Medicare Advantage, where going out of network can mean significantly higher costs or no coverage at all for that visit.
• Plan availability. Insurers enter and exit markets county by county. A plan can be discontinued in your area, which means you will be moved or left without drug coverage unless you act.
• Premiums, deductibles, and cost sharing. Copays, deductibles, and out-of-pocket maximums get reset annually, and the changes are not always small.

For 2027, several Part D figures are already confirmed by the Centers for Medicare & Medicaid Services:

The out-of-pocket cap is a real protection, and it is worth knowing it exists. The figure to watch more closely is your own plan premium. A temporary federal program that had been holding standalone drug plan premiums down is ending after 2026, which means some plans may show larger premium increases than in recent years. That is a reason to read the notice rather than assume this year looks like last year.

One timing note. The standard Part B premium and the income thresholds for 2027 are usually announced by CMS in November, partway through the enrollment window. The 2026 standard premium is $202.90 a month, and the Medicare Trustees have projected roughly $209.50 for 2027, though that is an actuarial estimate rather than a final figure. If you are budgeting, build in some flexibility until the official numbers arrive. We cover these details with clients as part of Medicare and healthcare planning.

The Questions Are Different Depending on Your Coverage

There is no single checklist that fits everyone, because the three main paths through Medicare raise different questions.

If you have Original Medicare with a Part D drug plan

Your review centers on the drug plan. Check that every medication you take is still on the formulary, still on a tier you can live with, and still available at the pharmacy you use. Compare your plan against others in your county rather than assuming yours is still competitive, because plan pricing shifts year to year. Original Medicare itself does not have a network, so provider access is generally not the concern here.

If you have a Medicare Advantage plan

You are reviewing a bundled product, so there is more to check. Confirm your doctors and preferred hospitals are still in network for next year, not just this year. Look at how the plan handles specialists, referrals, and care outside Colorado if you travel or spend part of the year elsewhere. Review the maximum out-of-pocket amount, since that is the number that matters in a bad health year. And if the plan includes dental, vision, or hearing benefits, check whether those benefits changed, because supplemental benefits are a common place for plans to adjust.

If you have a Medicare Supplement (Medigap) policy

Supplement policies generally renew without the annual formulary and network changes, so your review is narrower. Your premium is the main variable, and premiums typically rise with age or with the insurer’s rate filings. Your Part D drug plan is separate and still needs its own annual review.

One important caution. Switching Supplement plans is not the same as switching during Annual Enrollment. Outside of specific guaranteed-issue windows, an insurer may be able to use medical underwriting to decide whether to accept you and at what price, and the rules vary by state. If you are considering a change to a Supplement policy, confirm your rights before you drop existing coverage.

IRMAA: How Income From Two Years Ago Affects Your Premiums

This is the piece that catches people most often, and it is the clearest example of why Medicare belongs in a financial planning conversation rather than a separate file.

If your income is above certain thresholds, you pay a surcharge on top of the standard Part B and Part D premiums. It is called the Income-Related Monthly Adjustment Amount, or IRMAA. The surcharge is based on your modified adjusted gross income from two years earlier, which means your 2027 premiums are determined by your 2025 tax return.

Two features make it worth understanding:

• It works like a cliff, not a slope. Income tax brackets are marginal, so crossing into a higher one only affects the dollars above the line. IRMAA does not work that way. Crossing a threshold by a small amount can move you into the next tier for the entire year. For reference, the 2026 thresholds begin at $109,000 for an individual return and $218,000 for a joint return. The 2027 thresholds are expected in the CMS fall announcement.
• It can sometimes be appealed, but only for specific reasons. If a qualifying life-changing event reduced your income after that tax year, you can ask Social Security to use a more recent year by filing Form SSA-44. Retirement, or work stoppage, is the most common reason. Other qualifying events include marriage, divorce, the death of a spouse, reduced work hours, loss of a pension, loss of income-producing property, and certain employer settlements.

What does not qualify is just as important. A Roth conversion, a large capital gain, or a one-time withdrawal is a voluntary financial decision, not a life-changing event. Those raise your income for IRMAA purposes, and the surcharge they trigger two years later cannot be appealed away.

That is not an argument against Roth conversions. It is an argument for doing them with the two-year lookback in view.

Why Enrollment Decisions Belong in the Retirement Income Conversation

Medicare is often treated as a healthcare decision and retirement income as a financial one. In practice they are the same conversation, because the income you create determines what you pay for coverage.

A few places where they intersect:

• Which accounts you withdraw from affects your modified adjusted gross income, which affects IRMAA two years later. Roth withdrawals and return of basis are treated differently than traditional account withdrawals.
• Roth conversions, capital gains, and large one-time withdrawals can all push income across a threshold. Timing and sizing them around the thresholds is a planning decision.
• Qualified charitable distributions from an IRA, available from age 70 and a half, can satisfy a required minimum distribution without the distribution counting toward income, which can matter if you are near a threshold.
• Medicare does not cover custodial long-term care, so the coverage you choose this fall does not address that risk. That belongs in long-term care planning instead.
• Premiums and out-of-pocket costs are a recurring line in your retirement budget, so they belong in the income plan rather than being handled separately each fall.

Your 2025 income is already set, so 2027 premiums are largely determined. But the decisions you make between now and December 31 of this year will set your 2028 premiums. That is why we look at Medicare and the broader financial plan together rather than one at a time.

A Short Checklist Before December 7

• Find the Annual Notice of Change your plan sent this fall and read the summary of what is changing.
• List every medication you take and confirm each one is still covered, still on an acceptable tier, and available at your pharmacy.
• Confirm your doctors and hospitals are in network for next year if you have Medicare Advantage.
• Check the plan’s maximum out-of-pocket amount, not just the premium.
• Look at whether your income is near an IRMAA threshold, and whether anything in your 2025 return was unusual.
• If a qualifying life-changing event has reduced your income, look into Form SSA-44.
• Make the change before December 7. After that, options are limited. Medicare Advantage enrollees have a separate window from January 1 through March 31 to switch plans or return to Original Medicare, but that window does not apply to everyone.

Final Thoughts

Annual Enrollment is one of the few retirement decisions with a hard deadline attached, which is probably why it gets rushed. The work itself is not complicated. It is mostly a matter of reading the notice your plan already sent you, checking your own prescriptions and providers against it, and understanding how your income decisions connect to what you pay.

If you would like help thinking through how coverage and income fit together, you can request a complimentary consultation or find more retirement planning insights on our blog. For plan-specific questions, the team at McGregor Wealth Management can point you toward Medicare-specific support.

If you’d like to get in touch, call 303.681.0113, email mark@mgswealth.com, or schedule a meeting online.

Frequently Asked Questions

What should I review during Medicare Annual Enrollment?

Start with the Annual Notice of Change your plan mails each fall, which lists what is changing for the coming year. From there, confirm that your prescriptions are still covered at a tier you can afford, that your doctors and hospitals are still in network if you have Medicare Advantage, and that the plan is still offered in your county. Compare the maximum out-of-pocket amount rather than focusing only on the monthly premium. Annual Enrollment runs October 15 through December 7, and changes take effect January 1.

How does IRMAA work, and can it be appealed?

IRMAA is a surcharge added to Medicare Part B and Part D premiums for beneficiaries whose income exceeds certain thresholds. It is based on modified adjusted gross income from two years earlier, so a 2027 premium reflects a 2025 tax return. It also functions as a cliff, meaning crossing a threshold by a small amount can move you into a higher tier for the full year. If a qualifying life-changing event such as retirement, divorce, or the death of a spouse reduced your income, you can ask Social Security to use a more recent year by filing Form SSA-44. Voluntary income events such as a Roth conversion or a large capital gain do not qualify.

What happens if I do nothing before December 7?

In most cases your current plan renews automatically with whatever changes the insurer made for the new year, including any revisions to the formulary, network, premium, or cost sharing. If your plan is being discontinued in your area, you may be moved to another plan or left without drug coverage. Doing nothing is a decision, and it is worth making it deliberately rather than by default. Medicare Advantage enrollees have a second window from January 1 through March 31 to switch plans or return to Original Medicare, but that option does not extend to everyone.

About Mark

You probably have people helping with your investments, legal matters, and taxes…but who makes sure you are getting all the benefits you’re owed? I do. My name is Mark McGregor. I scour federal, state, local, and corporate databases to find benefits you are owed but NOT receiving. That’s what I do. Yes, we do all the other things as well, such as providing investment management, tax planning, long-term care planning and other services. Those are the big things, but I also help to make sure the little unknown things are taken care of for you. It’s also making sure that the little things don’t become big problems for you down the road.

I got into this business to fill a void I noticed after the passing of one of my friends’ parents who was experiencing hardship due to poor planning. I saw the issues they had to deal with firsthand, and this left me feeling that there were lots of financial salespeople, but not many true advisors making sure people were getting all the available benefits they had worked so hard for.

I use the skills I gained from my bachelor’s degree from California Polytechnic State University and 24 years of industry experience to get all the benefits my clients are owed. I live in Castle Rock, and we are actively involved in sports and charitable organizations, such as Unbound, which provides personal attention and direct benefits to children, youth, the aging, and their families so they may live with dignity and achieve their desired potential and participate fully in society.

Disclaimer: Investment advisory services are offered through Retirement Wealth Advisors, Inc., an SEC-registered investment adviser. McGregor Wealth Management and Retirement Wealth Advisors are not affiliated. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss during periods of declining values. Past performance does not guarantee future results. This material is provided for general informational and educational purposes and is not intended as individualized investment, tax or legal advice. McGregor Wealth Management and its affiliates do not provide legal or tax advice. Consult an appropriate financial professional, tax advisor or attorney regarding your individual circumstances. Insurance and annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Mark McGregor and/or McGregor Wealth Management are not affiliated with or endorsed by the Social Security Administration, the Centers for Medicare & Medicaid Services, or any other government agency.