Smart Strategies to Keep Medicare Costs Down as Premiums and Deductibles Rise

Medicare costs are climbing at an alarming rate, and you're not alone in feeling the financial pressure. Part B premiums are projected to jump from $185 in 2025 to $206.50 in 2026: an 11.6% increase that represents the largest spike in several years. The Part B annual deductible is also expected to rise from $257 to $288, while Part D prescription drug coverage costs continue their upward trajectory.

As your trusted insurance professionals at Borde & Associates, we understand how these increases impact your budget and peace of mind. That's why we've compiled these proven strategies to help you navigate rising Medicare costs while maintaining the quality coverage you deserve.

Understanding the Medicare Cost Landscape

Before diving into cost-saving strategies, it's essential to understand what's driving these increases. Rising demand as more Americans become Medicare-eligible, escalating hospital and outpatient care expenses, increasing prescription drug prices, and a Medicare payroll tax rate that hasn't kept pace with program costs all contribute to higher premiums and deductibles.

The Part D out-of-pocket cap is set to rise from $2,000 in 2025 to $2,100 in 2026, but this cap also provides crucial protection against catastrophic prescription costs. Understanding these changes empowers you to make informed decisions about your coverage.

Review and Compare Your Coverage Annually

Your first line of defense against rising Medicare costs is staying proactive about your coverage choices. Each fall, you receive your plan's Annual Notice of Change (ANOC), which outlines updates to coverage, costs, and participating providers for the upcoming year. Don't let this important document sit unopened: it contains vital information that could save you hundreds or even thousands of dollars.

Medicare open enrollment runs through December 7, providing your opportunity to switch plans if your current coverage no longer aligns with your needs or budget. During this period, you can:

• Switch Medicare Advantage plans if you find better coverage or lower costs
• Return to Original Medicare from a Medicare Advantage plan
• Add or change Medicare Supplement insurance (though medical underwriting may apply)
• Switch Part D prescription drug plans to better match your medication needs

Remember, if you're considering switching Medicare Supplement plans, proceed with caution. Unlike Medicare Advantage plans, switching Supplement plans often requires medical underwriting, and you could face denial of coverage based on your health status.

Master the Three Ps Framework

When evaluating Medicare options, we recommend focusing on three critical factors: Providers, Prescriptions, and Priorities. This framework ensures you're making decisions based on what matters most to your healthcare and financial situation.

Providers: Your Healthcare Network

Your provider network encompasses doctors, hospitals, specialists, and pharmacies. Ask yourself these key questions:

• Is continuing with your current doctor essential, or are you open to seeing someone new?
• Do you have ongoing relationships with specialists that you want to maintain?
• Are there specific hospitals or medical facilities you prefer?

If you have a Medicare Advantage plan, familiarize yourself with in-network doctors, specialists, and facilities to minimize out-of-pocket costs. With Original Medicare and a Medicare Supplement plan, you aren't limited to a provider network, though providers must accept Medicare patients.

Prescriptions: Managing Drug Costs

Prescription medications can significantly impact your overall healthcare costs. Create a comprehensive list of all prescription drugs you take, including dosages and frequency. Use this list to:

• Compare Part D plans and their formularies (covered drug lists)
• Evaluate generic alternatives when available
• Consider mail-order pharmacy options for long-term medications
• Take advantage of Medicare's prescription drug negotiation program, which begins offering discounts of 38% to 79% off list prices on popular medications like Eliquis, Xarelto, Januvia, Jardiance, and Farxiga

Some Part D plans may charge more for certain prescriptions or cover fewer medications in 2026 due to the out-of-pocket cap limiting insurers' income, making comparison shopping even more crucial.

Priorities: What Matters Most to You

Your healthcare priorities are unique to your situation. Some people prioritize low costs above all else, while others base decisions on provider choices or comprehensive coverage. Common priority considerations include:

• Budget constraints and monthly premium limits
• Risk tolerance for higher deductibles versus higher premiums
• Travel needs and coverage outside your home area
• Additional benefits like dental, vision, or wellness programs

Reduce Income-Related Monthly Adjustment Amount (IRMAA)

If you're a higher-income Medicare beneficiary, you may face Income-Related Monthly Adjustment Amount (IRMAA) surcharges ranging from approximately $83 to nearly $496 monthly, depending on your income level. Since IRMAA is based on prior-year income, strategic tax planning can help lower these surcharges.

Tax Planning Strategies

• Roth IRA conversions during lower-income years
• Qualified charitable distributions from your IRA
• Tax-loss harvesting to offset capital gains
• Income timing strategies for retirement account withdrawals

Life Event Adjustments

If your income has dropped due to retirement, divorce, loss of a spouse, or other qualifying life events, request an IRMAA adjustment from the Social Security Administration. This adjustment can provide immediate relief from higher premiums based on your current financial situation rather than outdated tax returns.

Maximize Your Preventive Care Benefits

Using preventive services covered by your plan not only maintains your health but potentially avoids higher costs down the line. Original Medicare covers many preventive services at no cost to you, including:

• Annual wellness visits and health risk assessments
• Cancer screenings (mammograms, colonoscopies, pap smears)
• Cardiovascular screenings and diabetes testing
• Vaccinations including flu shots and pneumonia vaccines
• Bone density screenings and depression screenings

Taking advantage of these benefits can catch health issues early when they're less expensive to treat, potentially saving you thousands in future medical costs.

Leverage Professional Medicare Guidance

Navigating Medicare's complexity doesn't have to be a solo journey. Professional guidance can help you identify cost-saving opportunities you might otherwise miss.

State Health Insurance Assistance Programs (SHIP)

SHIP programs offer free, expert Medicare advice from objective sources. These trained volunteers can help you compare plans, understand your rights, and navigate Medicare's complexities without any sales pressure.

Licensed Insurance Professionals

Working with experienced Medicare professionals like our team at Borde & Associates ensures you receive personalized guidance tailored to your specific situation. We can help you:

• Compare multiple plan options side-by-side
• Identify potential savings opportunities
• Navigate enrollment processes smoothly
• Provide ongoing support throughout the year

Evaluate Additional Coverage Strategically

Original Medicare typically covers 80% of your healthcare costs, making it important to evaluate additional options for copays, coinsurance, and deductibles. As your health needs change, regularly assess whether you need supplemental insurance.

Consider these factors when evaluating additional coverage:

• Your current health status and expected medical needs
• Financial ability to handle unexpected medical expenses
• Risk tolerance for out-of-pocket costs
• Travel patterns and coverage needs outside your home area

Remember, not all plans provide identical coverage, and additional insurance may be necessary based on your evolving healthcare requirements.

Take Advantage of 2025 Part D Reforms

The Inflation Reduction Act introduced significant Part D reforms that can help manage your prescription costs. In 2025, you have $0 cost-sharing obligation during the catastrophic phase of coverage, which starts when your out-of-pocket costs reach $2,000.

This cap provides crucial protection against extremely high prescription drug expenses, though it will increase to $2,100 in 2026. Understanding these reforms helps you plan for prescription costs more effectively and budget for potential out-of-pocket expenses.

Your Next Steps for Medicare Savings

Rising Medicare costs are a reality, but you have powerful tools at your disposal to minimize their impact on your budget. The key is taking proactive steps during open enrollment and throughout the year to optimize your coverage.

At Borde & Associates, we're here to help you navigate these challenging decisions with confidence. Our experienced team can review your current coverage, identify potential savings opportunities, and guide you toward the most cost-effective options for your unique situation.

Don't let rising Medicare costs catch you off guard. Contact us today to schedule your personalized Medicare review and discover how much you could save while maintaining the quality coverage you deserve.

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