How to Cut Your 2026 Medicare Costs During Open Enrollment

Every fall, Medicare beneficiaries get a window of time that most people treat like junk mail — the Annual Enrollment Period, which runs from October 15 through December 7. Whatever changes you make during this window take effect January 1, 2026. If you ignore it, your current plan rolls over automatically, which sounds convenient until you realize that plan costs, drug formularies, and provider networks can change dramatically from one year to the next. The beneficiaries who save the most money are the ones who treat this period like a financial review, not a formality.

Let's start with the baseline costs you're working with. The standard Medicare Part B premium for 2026 is $185.00 per month, a $10.30 increase from the $174.70 you paid in 2025. That's $123.60 more per year just for Part B, before you've seen a single doctor. The Part B deductible in 2026 is $257, up from $240 in 2025. The Part A inpatient hospital deductible — the amount you pay for each benefit period before Medicare kicks in — is $1,676 in 2026. These numbers matter because they set the floor for what Original Medicare costs you, and they're the baseline against which you should compare any Medicare Advantage or Medigap plan you're considering.

If your income in 2023 (the year the Social Security Administration uses to calculate 2025 surcharges, with 2026 surcharges based on 2024 income) was above $106,000 for an individual or $212,000 for a married couple filing jointly, you're paying more than the standard Part B premium through what's called the Income-Related Monthly Adjustment Amount, or IRMAA. The IRMAA surcharges for Part B in 2026 range from an additional $74.00 per month at the lowest income tier all the way up to $443.90 per month for the highest earners. There's also a Part D IRMAA surcharge that ranges from $13.70 to $85.80 per month on top of your drug plan premium. If your income has dropped significantly since 2024 — due to retirement, the death of a spouse, divorce, or loss of income-producing property — you can file Form SSA-44 with the Social Security Administration to request a reduction in your IRMAA based on your current financial situation. This is one of the most overlooked cost-saving moves in Medicare, and it can save some beneficiaries hundreds of dollars per month.

For beneficiaries on Original Medicare without a Medigap supplement, the exposure to out-of-pocket costs is substantial. Original Medicare pays 80% of covered outpatient services after you meet the Part B deductible — you're responsible for the remaining 20% with no cap. A single hospitalization, a round of chemotherapy, or a series of specialist visits can quickly generate thousands of dollars in cost-sharing. This is why Medigap plans — also called Medicare Supplement Insurance — exist. The most comprehensive option, Plan G, covers the Part A deductible, skilled nursing facility coinsurance, Part B coinsurance, and foreign travel emergency care (up to plan limits). The only thing Plan G doesn't cover is the Part B deductible ($257 in 2026), which you pay once per year. Average monthly premiums for Plan G vary widely by age, gender, tobacco use, and location, but according to CMS.gov data and industry surveys, beneficiaries in their late 60s typically pay between $100 and $180 per month for Plan G, while those in their mid-70s may pay $150 to $250 or more depending on the state and insurer.

Data Snapshot: According to CMS.gov data, there were approximately 4,800 Medicare Advantage plans available nationwide for 2025 enrollment, with an average of 43 plans available per county — the highest number of plan choices in the program's history. Star ratings for Medicare Advantage plans, which CMS updates annually, showed that roughly 51% of Medicare Advantage enrollees were in plans rated 4 stars or higher for 2025. These ratings measure quality of care, member experience, and chronic disease management, and plans with 4 or more stars receive bonus payments from CMS that can be used to offer richer benefits. When you're comparing plans during AEP, filtering for 4-star and above plans on Medicare.gov's Plan Finder tool is a practical starting point.

Medicare Advantage plans — the private insurance alternative to Original Medicare — can look attractive on paper because many carry $0 monthly premiums. But the premium is only one piece of the cost equation. What matters equally is the plan's maximum out-of-pocket limit, which in 2026 can be as high as $9,350 for in-network services under CMS rules. Some plans set their limits lower, at $4,000 or $5,000, which provides meaningfully better financial protection if you have significant health needs. You also need to verify that your specific doctors and hospitals are in the plan's network — not just that the plan covers your area — because out-of-network care under an HMO plan may not be covered at all, and under a PPO plan it typically comes with much higher cost-sharing. Call your doctors' offices directly and ask whether they accept the specific plan you're considering, not just whether they accept Medicare Advantage generally.

Prescription drug costs are often where beneficiaries lose the most money by not shopping around. If you're on Original Medicare, you need a standalone Part D drug plan. If you're on Medicare Advantage, drug coverage is usually bundled in. Either way, the plan's formulary — the list of covered drugs and their tier placement — determines what you actually pay at the pharmacy. A drug that's on Tier 2 (preferred generic) in one plan might be on Tier 4 (non-preferred brand) in another, with a cost difference of $50 to $200 per month for the same medication. Medicare.gov's Plan Finder allows you to enter your specific prescriptions and compare your estimated annual drug costs across every plan available in your ZIP code. This tool is free, requires no personal information to use in browse mode, and is the single most powerful cost-comparison resource available to beneficiaries. Use it every year during AEP — formularies change annually even if your plan name stays the same.

One major change for 2026 that affects Part D beneficiaries is the continued implementation of the Inflation Reduction Act's drug pricing provisions. The out-of-pocket cap for Part D prescription drugs is $2,000 in 2026, down from $3,300 in 2024 and the elimination of the coverage gap (the so-called donut hole). This cap means that once you've spent $2,000 out of pocket on covered Part D drugs in a calendar year, you pay $0 for the rest of the year. For beneficiaries who take expensive specialty medications — biologics for rheumatoid arthritis, cancer drugs, MS treatments — this cap can represent savings of thousands of dollars annually compared to prior years. If you're currently in a plan that doesn't emphasize specialty drug coverage, this is the year to re-evaluate whether a plan with a more favorable specialty tier structure could reduce your costs before you hit the cap.

Low-income beneficiaries should also check their eligibility for the Extra Help program (also called the Low Income Subsidy, or LIS), which helps pay Part D premiums, deductibles, and copayments. In 2026, individuals with annual incomes up to approximately $22,590 and limited assets may qualify. Extra Help is not automatic — you must apply through the Social Security Administration at ssa.gov or by calling 1-800-772-1213. Separately, the Medicare Savings Programs, administered by state Medicaid agencies, can help pay Part B premiums and in some cases Part A premiums and cost-sharing. Eligibility thresholds vary by state, but millions of eligible beneficiaries are not enrolled simply because they don't know these programs exist. If your monthly income is under $1,900 as a single person, it's worth calling your state Medicaid office to ask about the Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB), or Qualifying Individual (QI) programs.

If you're currently in a Medicare Advantage plan and want to switch back to Original Medicare with a Medigap supplement, be aware that in most states, Medigap insurers can use medical underwriting outside of guaranteed issue periods — meaning they can charge you more or deny coverage based on your health history. The guaranteed issue periods when they cannot do this include the six-month window starting when you first enroll in Part B at age 65, and certain Special Enrollment Periods such as when your Medicare Advantage plan leaves your area or loses its Medicare contract. Outside those windows, getting Medigap coverage with pre-existing conditions can be difficult or expensive in most states. However, if you live in California, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Missouri, Nevada, New Jersey, New York, Oklahoma, or Oregon, your state has a birthday rule that gives you a 30-day window each year around your birthday to switch Medigap plans without medical underwriting — a significant consumer protection that residents of those states should use strategically.

Finally, don't overlook the Medicare Open Enrollment Period that runs January 1 through March 31 each year. This is separate from AEP and allows beneficiaries already enrolled in a Medicare Advantage plan to switch to a different Advantage plan or return to Original Medicare once. Changes made during OEP take effect the first day of the following month. It's a safety valve if you realize in February that the plan you chose during AEP isn't working — your doctors aren't in network, your drugs cost more than expected, or you simply want to reconsider. You cannot, however, use OEP to enroll in a standalone Part D drug plan if you switch back to Original Medicare; you'd need to do that separately and may face a late enrollment penalty if you've gone without creditable drug coverage. The best strategy is to do your homework during AEP so you don't need OEP as a correction — but it's good to know the option exists.