If you have a Medicare Advantage or a Medicare Part D drug plan, keep an eye out this September for your plan’s Annual Notice of Change. If you haven’t signed up for electronic or paperless delivery of insurance documents, then the ANOC will arrive in the mail. But if signed up for paperless delivery, you will have to go online to your insurance company’s website to read the ANOC.
Be sure to review it as soon as you get it or it becomes available online. Major changes are coming along for 2027 that could have a significant effect on your costs and benefits.
If you are unhappy with the changes, you can switch plans, but unless you qualify for a special exception, the only time you can make a change is during Medicare’s Annual Open Enrollment Period. That runs from October 15 to December 7th.
If you don’t switch during open enrollment, you’ll automatically be re-enrolled into your existing plan unless the plan is discontinued.
What’s Changing for 2027
Several changes in 2027 could affect your overall costs and benefits.
- The Trump Administration is discontinuing the government subsidies that were put in place to keep Part D prescription drug plan premiums low. The subsidy will terminate at the end of 2026. As a result, Part D drug plan premiums could rise significantly for many people. Although the national baseline premium increase is 6%, Part D insurance comes through private insurers, so how much extra you’ll pay depends on your specific plan.
For instance, the ANOC my husband and I received show that the Part D plan we each have will go up $74.60 a month. For the two of us, that’s $149.20 a month which will total $1,790.40 for the year. - The out-of-pocket drug cap will increase. The 2027 out-of-pocket drug cap will be going up to $2,400, an increase of $300 over the 2026 cap. The drug cap establishes a maximum out of pocket costs you pay for covered medicines for the year. Once your out-of-pocket costs for covered medications exceed $2400, you won’t have to pay for any additional prescription medications that are covered by your plan. However, you will have to pay for medications that are not covered by your plan.
- The allowed Medicare Part D deductible amount increases to $700 in 2027. Not all Medicare Part D plans have a deductible, but if yours does, the deductible could increase to $700, the maximum allowed by Medicare for 2027.
- Drug coverages and tiers may change. The medications that are covered by your plan and the price tiers they fall into are listed in your Part D plan’s formulary. That list – in other words what drugs the plan will cover – and the pricing tier of various drugs can change from year to year. It’s important to review the formulary because medications that were covered last year could be more expensive, or no longer be covered in 2027.
Potential Savings for Some
The Medicare Drug Price Negotiation Program has negotiated lower prices for 15 additional medications for 2027. The amount you’ll pay will depend on your plan, but if you are prescribed any of the medications on the list, your costs should be lower in 2027.
Related: Medicare Part B Premium Will Increase
You won’t get an ANOC for Medicare Part B, because it’s part of Original Medicare. But be aware that the Part B premium will be going up in 2027. The premium, which is deducted automatically from your Social Security benefit, will increase $6.60 per month to $209.50 for most Medicare beneficiaries in 2027. High income retirees will pay more. The Part B annual deductible will increase $9.00 per year. Medicare Part B is a required part of Medicare Advantage plans.
Medicare Advantage Changes to Watch For
Medicare Advantage is insurance provided by private insurers. Due to costs and other reasons, some are changing the plans and benefits they offer in significant ways.
While your first inclination will be to see whether your monthly premium will be going up, don’t stop there. Other changes could significantly impact your out-of-pocket costs and access to services. Here are changes to look for when you get your plan’s ANOC:
- Changes in the approved health care providers in your plan’s network. The providers you have been using might be dropped from the network for 2027. If so, you’ll have to choose different doctors, use different medical facilities, or make other changes to where you get your medical care.
- Increased copays. If your plan adds or increases copays for medical care your out-of-pocket expenses can increase significantly.
- An increase in the need for prior authorizations. The need for prior authorizations can delay and sometimes prevent you seeing specialists, getting certain medical test and other medical services.
- Reduced some extra benefits such as dental services or gym memberships.
Medicare Advantage Plan Challenges
Some Medicare Advantage insurers are dropping out of some markets. Additionally, For some major health groups and networks are dropping or limiting participation in certain Medicare Advantage plans. If the hospital or medical practitioner you prefer doesn’t accept your plan, you will have to go elsewhere or pay out of pocket.
What to Do About the Changes
Read the Annual Notice of Change as soon as you get it. Don’t just skim through it. Read it carefully. Don’t assume the plan hasn’t changed or that you’ll be happy with the plan if the premium hasn’t changed much.
Compare your list of medications and the pharmacies you use to the 2027 formulary for the plan.
Compare your 2027 plan to other plans available to you. You can do this yourself by going to the Medicare.gov site and using their find a plan option.
If you want to switch from Medicare Advantage to Original Medicare and Medigap insurance, determine whether you’ll be subject to underwriting rules that could delay when you would start receiving coverage for preexisting conditions.
If you’re still satisfied with your existing plan after reviewing the changes, you don’t have to do anything. Your plan will auto-renew.
What is the Annual Notice of Change
The Annual Notice of Change (abbreviated as ANOC) alerts you to changes that will take place in your insurance plan starting on the first of the new year. Medicare Advantage and Part D insurers are required to send out the ANOC by September 30.
Learn more about the ANOC and your options for changing Medicare Insurance.
Disclaimer: The information on this website is provided for informational purposes only and should not be considered as legal, tax, accounting, or medical advice. Please consult a licensed professional for help with any specific questions and issues you may have.
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