How to Plan for Medicare in 2026
One of the most common topics we hear questions about is Medicare. When should you enroll? How do you choose the right plan? What are the biggest mistakes to avoid? For many people approaching retirement, navigating Medicare can feel overwhelming.
To help answer these questions, we recently welcomed Medicare expert and broker Megan Hill of Medicare Insurance Options to our Client Town Hall webinar last month. Together, we discussed the Medicare enrollment process, common misconceptions, and key planning considerations for those approaching age 65 and beyond. In this article, we've summarized some of the most frequently asked questions and important takeaways from that conversation to help you better understand your Medicare options and confidently plan for healthcare in retirement in 2026.
When to Start Exploring Your Medicare Options
One of the most common questions people ask is, "When should I start planning for Medicare?"
While some people begin researching their options a year before becoming eligible, that's not necessary for most. Starting about six months before your 65th birthday typically provides plenty of time to understand your choices and make informed decisions. As Megan Hill of Medicare Insurance Options notes, "Six months is plenty of time. But you've got to get started on the process three months before your birthday month."
It's important to know that your Initial Enrollment Period begins three months before your birthday month. This is when you can enroll in Medicare, and it generally takes several weeks to receive your Medicare card. After that, you'll need to decide how you'd like to supplement your Original Medicare coverage, whether through a Medicare Supplement (Medigap) policy or a Medicare Advantage plan.
Many people are surprised by how much there is to learn. Medicare has multiple parts, enrollment deadlines, and different coverage paths, so it's perfectly normal if it doesn't all click after one conversation. Giving yourself several months to research your options, ask questions, and compare plans can help you make confident decisions without feeling rushed.
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The Differences Between Medicare Advantage Plan vs. Medicare Supplement
When enrolling in Medicare, you’ll typically choose between a Medicare Advantage plan or a Medicare Supplement (Medigap) plan. Medicare Advantage plans generally have lower monthly premiums but require copays and coinsurance as you use healthcare services, and they typically operate within provider networks. Medicare Supplement plans have higher monthly premiums but help cover many out-of-pocket costs that Medicare doesn’t pay, offering greater flexibility to see any provider who accepts Medicare. However, Supplement plans do not include prescription drug, dental, vision, or hearing coverage, which must be purchased separately. “The biggest tradeoff is simple: lower premiums with Medicare Advantage versus greater predictability with Medicare Supplement,” says Hill.
How to Choose the Right Medicare Plan
Choosing a Medicare plan isn't just about comparing benefits, it's about finding coverage that fits both your financial situation and your healthcare needs. Before you begin evaluating plans, there are two important questions to ask yourself.
1. What is my health care budget?
Start by deciding how much you're comfortable spending each month on healthcare. Your budget can help narrow your options and determine whether a Medicare Advantage plan or a Medicare Supplement plan may be a better fit.
2. What do my future healthcare needs look like?
Many people become eligible for Medicare while they're still healthy, but Medicare is designed to provide coverage throughout retirement. Consider not only the care you need today, but also your family's health history, the prescriptions you take, how often you visit the doctor, and how you would want to be covered if an unexpected illness or hospitalization occurred.
While no one can predict the future, thinking about both your current and potential healthcare needs can help you choose coverage that offers greater peace of mind for the years ahead.
Understanding IRMAA Before You Enroll in Medicare
One of the most common surprises new Medicare enrollees face has nothing to do with choosing a plan. Instead it's discovering that they have to pay higher Medicare premiums because of their income. “People get blindsided by that,” says Megan Hill of Medicare Insurance Options.
This additional charge is called the Income-Related Monthly Adjustment Amount (IRMAA). If your income exceeds certain thresholds, you'll pay more for your Medicare Part B and Part D premiums than the standard monthly amount.
What surprises many retirees is that Medicare doesn't use your current income to calculate these premiums. Instead, it looks at your modified adjusted gross income (MAGI) from two years earlier. That means if you enroll in Medicare at age 65, your premiums will typically be based on the tax return you filed from two years prior. This timing can create unexpected costs for people who had a high-income year just before retirement. Selling a home, selling a business, exercising stock options, or realizing large capital gains can all increase your income enough to trigger higher Medicare premiums, even if your income drops significantly once you retire.
While major financial decisions shouldn't be made based solely on Medicare premiums, understanding how IRMAA works can help you plan ahead. Before selling a significant asset or recognizing a large amount of taxable income in the years leading up to Medicare eligibility, consider speaking with your financial advisor or tax professional. A little planning today could help reduce unexpected healthcare costs in retirement.
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When Can You Change Your Medicare Plan?
Choosing a Medicare plan isn't a one-time decision. Your healthcare needs, prescriptions, and even your plan's benefits can change from year to year, making it important to review your coverage annually. For most people, changes to Medicare coverage are made during the Annual Enrollment Period, which runs from October 15 through December 7 each year. Any changes you make during this window generally take effect on January 1.
Each fall, your insurance carrier will send an Annual Notice of Change, outlining updates to your premiums, benefits, provider networks, and prescription drug coverage. Rather than simply filing this notice away, take time to review it carefully and determine whether your current plan still meets your needs.
As you evaluate your coverage, consider questions such as:
Have your doctors changed?
Are you taking new medications?
Are you anticipating dental, vision, or hearing care in the coming year?
Have your healthcare priorities or budget changed?
Can You Change Plans If Your Health Changes?
One common misconception is that a major health event automatically allows you to change Medicare plans. In most cases, that's not true. If your health changes during the year, you'll generally remain in your current plan until the next Annual Enrollment Period. That's why it's important to choose coverage that not only fits your current health needs but also provides protection if your healthcare needs become more significant throughout the year. "You want to plan for the worst when you pick your plan,” recommends Hill.
There is one notable exception. If you're enrolled in a Medicare Advantage plan, you have an additional opportunity during the Medicare Advantage Open Enrollment Period (January 1 through March 31) to switch to another Medicare Advantage plan or return to Original Medicare. Outside of these enrollment periods, plan changes are typically only available if you qualify for a Special Enrollment Period.
Don't Overlook This Medicare and HSA Rule
If you plan to continue working after age 65, there's one Medicare rule that often catches people by surprise, especially if you're contributing to a Health Savings Account (HSA). Many assume they can enroll in Medicare Part A, which is generally premium-free, while continuing to make HSA contributions through their employer. Unfortunately, that's not how the rules work.
Once you're enrolled in any part of Medicare, including Part A, you can no longer make or receive contributions to an HSA. Continuing to contribute after your Medicare coverage begins could result in tax penalties for excess contributions. "If you're going to get into Medicare Part A because it doesn't cost anything, you have to stop putting money into your Health Savings Account," says Hill. If you're planning to work beyond age 65, it's important to coordinate your Medicare enrollment with your HSA contribution strategy.
Speaking with your financial advisor, tax professional, or Medicare specialist before enrolling can help you avoid unnecessary penalties and ensure your healthcare and retirement plans remain aligned.
Whether you're approaching age 65, continuing to work, or already enrolled in Medicare, taking the time to understand your options can make a meaningful difference in both your healthcare coverage and your long-term financial plan. While Medicare rules and programs will continue to evolve, the best approach remains the same: plan ahead, review your coverage regularly, and seek guidance when you need it. By staying informed and proactive, you can make confident decisions that support your health, your finances, and your retirement goals for years to come.