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Expect Skinnier Benefits, Higher Premiums and Fewer Options

Open enrollment for 2026 is underway. The Wall Street Journal reports Big Changes Are Coming for 2026 Medicare Plans. Note: That is a free link courtesy of the WSJ.

Last year, seniors picking Medicare coverage faced some tough choices. This year might be even worse.

The enrollment period for 2026 Medicare coverage starts Wednesday, and it is likely to be a difficult one for many enrollees. For the second year in a row, big Medicare insurers are getting rid of some plans, trimming popular benefits and increasing out-of-pocket costs such as deductibles.

The upshot: Seniors have to be careful, or they might end up with a bad surprise such as higher drug costs or the loss of a favorite doctor.

“This year is a nightmare,” said Marcia Mantell, a retirement-planning consultant. Medicare enrollees “have to know more than they ever have had to know…it’s all the hidden stuff,” she said.

Behind the turmoil are business realities. Medicare insurers have seen their profits squeezed by higher-than-expected medical spending and regulatory changes. Now, some of the biggest are trying to improve their margins by dumping unprofitable products and by controlling costs better.

Higher costs

Medicare Advantage companies are increasing the maximum out-of-pocket cost in many of their plans. This figure is supposed to represent the total amount you could pay toward your care over the year, in the form of copayments and other charges. It is an important number to watch.

Wall Street analysts at Leerink Partners, analyzing a sampling of large 2026 plans, found that Medicare insurers including Elevance Health, UnitedHealthcare and CVS Health’s Aetna were raising their average out-of-pocket caps. But Humana’s is actually going down.

Loss of doctors and hospitals

At least 1.2 million Medicare Advantage enrollees are likely to lose their current plans next year because the plans are being eliminated, according to Healthpilot, a brokerage that offers Medicare plans.

Big Medicare insurers are paring back their preferred provider organization designs, known as PPOs, while bolstering their more-restrictive health maintenance organization plans, known as HMOs.

HMOs often don’t pay for care you get from doctors and hospitals outside their approved networks, which can be limited. PPOs typically give patients more freedom.

You should always check if the doctors and hospitals you like are included, because a growing number of hospitals are leaving Medicare Advantage networks. Sarah Murdoch, director of client services at the Medicare Rights Center, suggested reaching out directly to healthcare providers because insurer directories aren’t always accurate or up-to-date.

If unfettered access to healthcare providers is important to you, consider opting for traditional Medicare, which tends to include nearly every hospital and doctor. But if you do, you will likely need a special product called a Medicare supplement, or Medigap, and that can be expensive, or even impossible, to get.

If you don’t get a Medigap soon after you first age into Medicare at 65, you might be refused, or pay higher rates, based on your pre-existing health conditions. Look here for more detail on the federal rules.

Fewer Drug Plans

Many of the biggest changes this year are affecting Medicare drug coverage.

For the second year in a row, the number of stand-alone Medicare drug-benefit plans, known as Part D plans, is dropping sharply. The 2026 offerings will include 360, down from 464 currently and 709 in 2024, according to Avalere Health, a consulting firm.

Both the stand-alone plans and the drug benefits offered through Medicare Advantage are also hitting patients with higher charges.

Drug deductibles—the amount you pay up front before coverage kicks in—are mushrooming for many. Also, in a number of plans, medications that now come with a flat copayment will next year require “coinsurance,” a charge that represents a percentage of the medication’s total cost.

Reduced perks

Over the past several years, Medicare insurers layered on perks designed to lure seniors—including money for fun extras such as pickleball paddles. Some of those are now being dialed back.

Analysts at TD Cowen looked at a sampling of plans, and found that UnitedHealthcare, Aetna and Elevance will be trimming some extra coverage that seniors can use for a variety of needs, sometimes including items such as healthy food and home repairs. Their rival Humana wasn’t doing so, on average.

Broker Incentives

Medicare insurers are also making hidden changes that might have a big impact on your Medicare shopping. The companies are cutting back on commissions that they pay insurance agents, generally for less-profitable plans that they don’t want to grow.

These changes don’t hit seniors directly, of course. But agents and brokers have no incentive to steer clients to plans that don’t pay.

Agents said that commissions for many stand-alone Part D plans have vanished. And they see a pattern of lower and fewer payments tied to many PPOs.

Seniors need to do their own homework to ensure they are seeing all the options, including those that don’t pay commissions. Start with the plan finder tool at Medicare.gov, which should list everything available in your area.

Where to Get Help

The Wall Street Journal provided a number of links.

The Journal notes that “You can find unbiased Medicare advice from the State Health Insurance Assistance Program (SHIP) in every state.”

• SHIP can help you review your Medicare plan options during the Fall Open Enrollment Period. SHIP offers confidential, unbiased guidance from trained and certified Medicare experts to help you make important decisions about your care and benefits. SHIPs and their highly trained volunteers help thousands navigate Medicare each year.
• The nonprofit Medicare Rights Center maintains a national helpline. Call the National Helpline at 800-333-4114.I called that number and they help with prescription pans in all states. However they refer you to SHIP for advantage plans for other than New York State. So start with SHIP unless you live in New York.
• Be sure to run your medications through the Medicare.gov site when you are shopping for next year’s plan. The government’s tool can give you a sense of what you might pay for those medicines under each plan. 

My plan at Aetna was cancelled but I have not picked a new one. So, I cannot tell you my specific changes.

But I can tell you many perks this year were cancelled and I expect the same again this year.

For 2026, it’s very important to do your homework.

The Medicare Hospital Insurance (HI) trust fund, which pays for Medicare Part A, is projected to be exhausted in 2033, according to the latest Medicare Trustees Report. This is three years earlier than previous projections and is due to rising healthcare costs and higher-than-expected spending on hospital and hospice care.

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Finally, the government shutdown is totally related to reduced Obamacare subsidies here are two more links for discussion.

Government Shutdown

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Expect bigger deficits but no solutions to the real problem.

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