AEP 2026: Plan Change Guide
Understanding Your Medicare Options This AEP: What’s Changing for 2026
As we approach the Medicare Annual Enrollment Period (AEP) from October 15 to December 7, it’s more important than ever for Medicare beneficiaries to review their coverage. With significant changes coming in 2026, including plan discontinuations and pricing shifts due to the Inflation Reduction Act (IRA), this guide will help you navigate your options and make informed decisions.
What Is AEP and Why It Matters
The AEP is your opportunity to:
- Switch from Original Medicare to a Medicare Advantage plan (or vice versa)
- Change from one Medicare Advantage plan to another
- Enroll in or change your Medicare Part D prescription drug plan
Changes made during AEP take effect on January 1, 2026.
What Happens If Your Plan Is Discontinued for 2026?
If your Medicare Advantage or Part D plan is not renewed for 2026, you’ll receive an Annual Notice of Change (ANOC) by September 30, 2025. This document outlines whether your plan is ending and what changes are coming.
If your plan is discontinued:
- You must choose a new plan during AEP to avoid losing coverage.
- If you don’t act, you may be automatically enrolled in Original Medicare, which may not include prescription drug coverage or supplemental benefits.
- You can use the Special Enrollment Period (SEP) if your plan ends outside of AEP.
Why Are Carriers Discontinuing Plans?
Several factors are driving insurers to scale back or eliminate plans:
- Financial Sustainability
Plans that are no longer profitable—especially PPOs, which are more expensive to operate—are being dropped in favor of HMO models.
- Rising Healthcare Costs
Doctor visits, hospital stays, and prescription drugs are more expensive than ever. Insurers are trimming benefits or exiting markets to manage costs.
- Regulatory Changes
New Medicare rules require:
- Faster prior authorization responses
- Extended inpatient approvals
- Clearer denial explanations These protections are good for patients but add administrative costs for insurers.
- Impact of the Inflation Reduction Act
The IRA has capped out-of-pocket drug costs at $2,100 in 2026, shifting more financial responsibility to insurers. To offset these costs, some carriers are:
- Raising premiums
- Reducing supplemental benefits
- Exiting unprofitable markets
How the Inflation Reduction Act Impacts 2026 Medicare Plans
The IRA, signed into law in 2022, is reshaping Medicare in several key ways:
🔹 Prescription Drug Price Negotiation
For the first time, Medicare can negotiate prices for high-cost drugs. In 2026, the following medications will have Maximum Fair Prices (MFPs):
- Januvia, Farxiga, Jardiance (diabetes)
- Xarelto, Eliquis (blood thinners)
- Entresto (heart failure)
- Imbruvica (blood cancers)
- Stelara, Enbrel (autoimmune diseases)
- Fiasp/NovoLog (insulin)
These negotiations are expected to save Medicare billions and reduce out-of-pocket costs for beneficiaries by up to 79% on some drugs.
🔹 Part D Redesign
- Deductible increases to $615
- Out-of-pocket cap set at $2,100
- Insulin capped at $35/month
- Vaccines remain free
🔹 Carrier Adjustments
To adapt to these changes, carriers may:
- Reduce plan options
- Increase copays for brand-name drugs
- Cut supplemental benefits like dental, vision, and fitness
- Exit underperforming counties
What You Should Do This AEP
- Review Your ANOC Carefully
- Look for notices about plan discontinuation or benefit changes.
- Compare Plans Early
- New plan details are released on October 1. Use this time to explore alternatives.
- Consult a Licensed Medicare Advisor
- They can help you understand your options and enroll in a plan that fits your needs.
- Act Before December 7
- Don’t wait until the last minute. Early action ensures uninterrupted coverage.
Final Thoughts
The 2025 AEP is not just about choosing a plan, it’s about preparing for a changing Medicare landscape in 2026. Whether your plan is ending or just evolving, staying informed and proactive will help you maintain the coverage and care you deserve.
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References
[1] Why Your Medicare Advantage Plan May Disappear in 2026
[2] Medicare Drug Price Negotiations for 2026: What You Need to Know
[3] Medicare Drug Price Negotiation Program: Negotiated Prices for Initial …