Skip to content 
An important envelope may arrive at your home this fall.
At first glance, it may look like another routine Medicare mailing. You might place it in a drawer, add it to a pile of paperwork, or assume that nothing significant has changed.
Please do not make that mistake.
The envelope may contain your Medicare plan’s Annual Notice of Change—and it could reveal changes affecting your doctors, prescription drugs, pharmacies, copayments, coverage, and retirement budget during the coming year.
One of the most expensive assumptions a retiree can make is:
“My Medicare plan worked well this year, so it should work exactly the same way next year.”
Unfortunately, that is not always true.
What is the Medicare Annual Notice of Change?
If you are enrolled in a Medicare Advantage plan or Medicare prescription-drug plan, your plan sends an Annual Notice of Change, commonly called the ANOC.
The ANOC explains changes the plan expects to make for the upcoming year. Although the plan may retain the same name, important provisions can change.
When the notice arrives, pay particular attention to five areas.
1. Your monthly premium
Has your plan premium increased? Has another charge been added?
The monthly premium is not the only cost associated with Medicare coverage, but it is an appropriate place to begin your review.
A plan with a low premium is not necessarily the least expensive plan. Your total costs can also include deductibles, copayments, coinsurance, prescription expenses, and charges for receiving care outside a plan’s network.
2. Your prescription-drug coverage
Confirm that each medication you take will remain covered.
A prescription may move to a different pricing tier, become subject to prior authorization, or require step therapy. A medication that was affordable this year could cost considerably more next year if its formulary status changes.
Do not limit your review to the plan’s monthly premium. Your medications could have a much larger effect on your annual healthcare expenses.
3. Your preferred pharmacy
Determine whether your current pharmacy remains in the plan’s network. You should also determine whether it will continue to be classified as a preferred pharmacy.
There can be a meaningful price difference between filling a prescription at a standard network pharmacy and using one of the plan’s preferred pharmacies.
4. Your doctors and hospitals
If you have Medicare Advantage, verify that your doctors, specialists, hospitals, and other providers will remain in the network.
Provider relationships can change. Discovering after January 1 that a trusted physician is no longer in your plan’s network can leave you facing higher expenses or fewer choices.
5. Your total cost-sharing exposure
Review changes involving deductibles, copayments, coinsurance, prior-authorization requirements, and the maximum amount you might pay out of pocket.
The best question is not simply, “What is my premium?”
The better question is:
“What could this coverage realistically cost based on my health, prescriptions, providers, and anticipated healthcare needs?”
What can you change during Medicare Open Enrollment?
Medicare Open Enrollment runs from October 15 through December 7 each year. Changes generally become effective on January 1.
During this period, Medicare beneficiaries may be able to change Medicare Advantage plans, join or change a Medicare prescription-drug plan, or move between Original Medicare and Medicare Advantage. Medicare explains the available Open Enrollment choices.
Each choice deserves careful consideration.
For example, someone leaving Medicare Advantage for Original Medicare may also want Medicare Supplement Insurance, commonly known as Medigap. Depending on the person’s circumstances and applicable protections, returning to Original Medicare does not necessarily guarantee access to every desired Medigap policy without medical underwriting.
Do not cancel existing coverage until you understand whether you can obtain the replacement coverage you want and what it may cost.
Your Medicare plan and IRMAA are different issues
IRMAA stands for the Income-Related Monthly Adjustment Amount. It is an additional amount paid by certain higher-income Medicare beneficiaries for Part B and Part D coverage.
Changing your Medicare Advantage or prescription-drug plan does not ordinarily eliminate IRMAA.
Your private Medicare plan and the income-related surcharge are two separate matters. An easy way to remember the distinction is:
You shop for the plan, but your tax return helps determine the surcharge.
For 2026, the standard Medicare Part B premium is $202.90 per month. The first IRMAA tier begins when modified adjusted gross income exceeds $109,000 for an individual filer or $218,000 for a married couple filing jointly. Social Security provides the current Medicare premium figures.
IRMAA is generally based on tax information from two years earlier. Therefore, 2026 premiums are normally determined using income reported on a 2024 federal tax return.
How financial decisions can affect Medicare premiums
For IRMAA purposes, modified adjusted gross income generally includes adjusted gross income plus tax-exempt interest.
Several financial decisions can influence that figure, including:
- Roth conversions
- Large taxable IRA distributions
- Realized capital gains
- Property or business sales
- Other substantial taxable income
Suppose someone completes a large Roth conversion. The conversion might help reduce future taxes, but it could also increase Medicare premiums in a later year.
Does that automatically make the conversion a bad decision?
No.
The goal should not always be to avoid IRMAA at any cost. A well-planned conversion could potentially produce long-term tax benefits that outweigh a temporary increase in Medicare premiums.
The more useful question is:
“How will this decision affect my lifetime taxes, Medicare expenses, retirement income, and financial flexibility?”
Retirement decisions should be evaluated together instead of optimizing one number in isolation.
What if your income has declined?
Social Security may calculate IRMAA using an older tax return from when you were still working and earning more money.
If you have since retired, reduced your working hours, lost pension income, divorced, married, or experienced another qualifying life-changing event, you may be able to request a new IRMAA determination using Form SSA-44. Social Security explains when Form SSA-44 may be used.
Not every reduction in income qualifies. Market losses and voluntary withdrawals, for example, are not automatically treated the same as retirement or a work reduction. Documentation is generally required.
Three questions to ask now
Before making your next Medicare or retirement-income decision, ask:
- Could a Roth conversion, capital gain, IRA distribution, or property sale push my income across an IRMAA threshold?
- Have I included Medicare premiums and other healthcare expenses in my retirement-income projection?
- Is Social Security using an older tax return that no longer reflects my financial circumstances?
When your Annual Notice of Change arrives, do not place it in a drawer. Review your coverage, prescriptions, pharmacies, providers, and potential costs.
Then look beyond the insurance plan and consider how your income and tax decisions could affect your Medicare premiums.
Medicare is not merely a healthcare decision. It can also be a retirement-income and tax-planning decision.
If you would like greater clarity about how Social Security, Medicare, taxes, and retirement income work together, contact Wisdom to Wealth for a Retirement Clarity Conversation.
The objective is education, not pressure—helping you understand your choices and make your next retirement decision with greater confidence.
This material is provided for general educational purposes and does not constitute individualized financial, investment, tax, legal, or Medicare-plan advice.
