Medicare Open Enrollment: Averages Fell, Your Bill May Not

A thick envelope from your drug plan arrived a few weeks ago. You set it on the counter, meant to read it, and it is still there. That envelope is your Annual Notice of Change, and it is the one piece of Medicare mail that can quietly add hundreds of dollars to your costs next year.

Medicare open enrollment runs from October 15 to December 7. The headlines say premiums are falling, and on average they are. But averages are built from millions of plans, and the plan you are actually in may be moving the other way. A federal subsidy that held drug plan prices down ends on December 31, and the drug deductible and out-of-pocket cap both go up.

This guide shows you which numbers changed, works through what staying put could cost, and gives you a 30-minute way to compare plans before the deadline.

Medicare Open Enrollment: Doing Nothing Is Still a Choice

If you do nothing during open enrollment, your current plan renews automatically with whatever new premium, deductible, and drug list it set for next year. That sounds safe. It is only safe if your plan's changes happen to suit you.

Most people never check. A KFF analysis of federal survey data found that about 69% of Medicare beneficiaries did not compare their coverage with other options during a recent open enrollment period. People in traditional Medicare were even less likely to look (73%) than people in Medicare Advantage (65%).

Here is what open enrollment lets you do:

• Switch Medicare Advantage plans, or move from Advantage back to Original Medicare.
• Join, drop, or switch a Part D drug plan if you have Original Medicare.
• Move from Original Medicare into Medicare Advantage.

Miss December 7 and your choices narrow sharply. Advantage enrollees get one more switch from January 1 to March 31. People with Original Medicare and a standalone drug plan get nothing until next fall unless they qualify for a special enrollment period.

Why the Averages Fell While Your Plan Might Not

CMS released its projections on September 28. According to AJMC's summary of the CMS data, the weighted average Medicare Advantage premium is projected to drop from $14.37 to $12 a month, a 16.5% decline. The number of Advantage plans barely moves, from 5,553 to about 5,532.

Read the fine print, though. CMS says about 8 in 10 Advantage enrollees can keep their plan at the same or a lower premium. Flip that around and roughly 2 in 10 cannot. With about 34 million people projected in Advantage plans, that is several million households facing a higher bill if they stay put.

Geography matters too. CMS state fact sheets put Wyoming's average Advantage premium rising from $45.91 to $69.23 a month, a jump of more than $23. A national average of $12 tells someone in Cheyenne almost nothing.

Premiums are also only one line on the bill. A plan can hold its premium flat and still raise your specialist copay, drop your doctor from its network, or move a drug you take to a costlier tier. Those changes are all listed in the Annual Notice of Change, and none of them show up in a headline average.

The Drug Plan Subsidy That Ends December 31

If you have Original Medicare plus a standalone Part D plan, this is the change to watch. The average standalone drug plan premium is projected to rise from $35.09 to $36 a month. Small, on paper.

What that average hides is the end of the Part D Premium Stabilization Demonstration. CMS started it to cushion premiums after the drug benefit was redesigned. In its first year it cut the base premium by $15 and limited any plan's yearly increase to $35. In the second year the cut shrank to $10 and the limit rose to $50. The program cost about $9.8 billion over those two years, and CMS is ending it after this year even though it had originally signaled a run of at least three.

So what does this mean for you? The ceiling on how much your standalone drug plan can raise its premium is gone. Many plans will price close to where they were. Some will not, and the only way to know which group yours is in is to read your notice or check the Plan Finder.

Compare that with drug coverage built into Advantage plans. After rebates, the average Part D portion of those premiums is projected to fall 38%, from $11.32 to $7 a month. The standalone average is now roughly five times higher.

The New Part D Numbers: A $700 Deductible and a $2,400 Cap

CMS finalized two more figures back in April, and they apply to almost every drug plan:

• Standard deductible: up from $615 to $700. Plans can charge less or nothing at all, but $700 is the most a plan may charge.
• Out-of-pocket cap: up from $2,100 to $2,400. Once your share of covered drug costs reaches that number, you pay nothing more for covered drugs for the rest of the year.

The cap is still one of the best protections Medicare has ever offered. Before the redesign, there was no hard ceiling at all. But a $300 rise in the cap lands hardest on the people least able to dodge it: anyone taking a brand-name drug for cancer, rheumatoid arthritis, or multiple sclerosis who hits the limit every single year.

Two protections stay in place. Covered insulin remains capped at $35 a month, and recommended adult vaccines such as shingles stay at no cost to you. Neither is subject to the deductible.

A Worked Example: What Staying Put Could Cost

Meet a hypothetical retiree we will call Ruth. She has Original Medicare and a standalone drug plan, and she takes one expensive brand-name drug that pushes her to the out-of-pocket cap every year.

This year: her plan charges $40 a month, or $480 a year. She hits the $2,100 cap. Her total drug spending is $2,580.

Next year, if she does nothing: her Annual Notice of Change shows the premium rising to $62 a month. That is $744 a year. She hits the new $2,400 cap. Her total becomes $3,144.

That is $564 more for the exact same drug, and Ruth never received a bill that said so.

Next year, if she switches: the Plan Finder shows another plan in her county that covers her drug at $28 a month, or $336 a year. She still hits the $2,400 cap, since that limit is the same in every plan. Her total is $2,736, which saves $408 against staying put.

Notice where the savings came from. The cap is fixed, so for a heavy user like Ruth, the premium is the only number she can actually shop. For a light user taking two cheap generics, the math flips: the deductible and the tier each drug sits on matter far more than the premium. To see what that $564 means over a decade of rising prices, run it through our inflation calculator.

How to Compare Plans in 30 Minutes

You do not need a broker or a spreadsheet. You need your drug list and one government website.

1. Gather your prescriptions. Write down every drug, its dose, and how often you take it. Grab your pharmacy's name too.
2. Open the official Medicare Plan Finder. Log in or enter your ZIP code, then add each drug and your pharmacy.
3. Sort by total estimated cost, not by premium. The tool adds premiums, deductibles, and copays for your exact drugs. A $0 premium plan can easily cost more over 12 months.
4. Check each finalist's network. For Advantage plans, confirm your doctors and nearest hospital are in network for next year, not just this one.
5. Look at the star rating. Ratings run from 1 to 5 and reflect member complaints, customer service, and how a plan handles appeals.

If your income is limited, check whether you qualify for Extra Help, which can cut your drug premium and copays to a few dollars. And if a large bill early in the year worries you, the Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into monthly payments instead of paying it all at the pharmacy counter.

The Advantage Switch That Is Hard to Undo

Moving from Original Medicare into an Advantage plan is easy. Moving back can be hard. In most states, once your first Medigap enrollment window has passed, a Medigap insurer can review your health history and deny you a supplement policy or charge more because of a condition you already have.

So if you are tempted by a low Advantage premium, ask yourself what happens if you get sick and want your old setup back. For many people the trade is fine. For someone with a chronic condition, it can be a one-way door. For more on how health costs have climbed outside Medicare, see our breakdown of why health insurance premiums jumped and how to pay less.

Frequently Asked Questions

When is Medicare open enrollment?

Medicare open enrollment runs every year from October 15 to December 7. Any plan you choose takes effect on January 1. If you are in a Medicare Advantage plan, you get one extra chance to switch plans or return to Original Medicare between January 1 and March 31.

What happens if I do nothing during Medicare open enrollment?

Your current plan renews automatically, with whatever premium, deductible, drug list, and network it set for next year. If your plan is leaving your area entirely, you will get a notice and a special enrollment period to pick a new one.

What is the Part D out-of-pocket maximum next year?

The cap rises from $2,100 to $2,400. Once your share of covered drug costs hits $2,400, you pay nothing more for covered drugs for the rest of the calendar year. Premiums do not count toward the cap.

Is a $0 premium Medicare Advantage plan really free?

No. You still pay your Part B premium, and the plan can charge copays, coinsurance, and a drug deductible. Compare plans by total estimated yearly cost for your drugs and doctors, not by the premium alone.

What to Do Before December 7

Open that envelope on the counter. Find three numbers: next year's premium, the drug deductible, and the tier for each drug you take. If any of them went up, spend 30 minutes on the Plan Finder with your drug list.

Medicare costs move together, so check the whole picture. The Medicare Trustees project the standard Part B premium rising from $202.90 to about $209.50 a month, and that comes straight out of your benefit check. Our guide to why the Social Security COLA never keeps up shows how much of your raise is gone before it reaches you.

You cannot control the cap or the Part B premium. You can control which plan you are in. For a lot of people, one comparison a year is worth more than any coupon they will clip all winter.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult with a qualified financial advisor before making investment decisions. Past performance is not indicative of future results.