Medicare: Upcoming Changes and How to Prepare
Changes to Medicare are coming in 2026, impacting coverage options, costs, and enrollment rules. Learn what’s new and discover the steps you can take now to ensure you’re prepared.
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This discussion is with Vector advisor Joe Grochowski.
Overview
Medicare is an important part of retirement planning, and for many is a topic that can feel overwhelming—especially with significant changes on the horizon. In our latest video, Joe Grochowski, Senior Wealth Advisor at Vector Wealth Management, breaks down what you need to know about Medicare, upcoming changes, and how to prepare.
Understanding Medicare: The Basics
Medicare is the government’s health insurance program for people 65 and older. It’s made up of four main parts:
Part A: Hospital insurance (usually premium-free if you’ve worked long enough)
Part B: Outpatient care, like doctor visits (monthly premium applies)
Part C: Medicare Advantage, a private plan that bundles A and B, sometimes with extra perks
Part D: Prescription drug coverage
You’re eligible at age 65, with a seven-month window to sign up (three months before your birthday month, your birthday month, and three months after). Missing this window can result in penalties.
What’s Changing in 2026?
Several important updates are coming, especially for clients in Minnesota:
UCare Exit: UCare is leaving the Medicare Advantage market at the end of 2025, affecting about 158,000 Minnesotans. If you’re on a UCare plan, you’ll need to select new coverage during the annual enrollment period (October 15 – December 7, 2025) to avoid losing coverage in January 2026.
Medigap Flexibility: Minnesota is expanding guaranteed issue protections for Medigap (Medicare Supplement) plans in 2026. This means more people can switch plans without medical underwriting—a win for those with pre-existing conditions. However, premiums are expected to rise by about 6% on average.
National Changes:
Part D drug costs will be capped at $2,100 per year starting in 2026, with no more out-of-pocket costs for covered prescriptions after that.
Medicare will begin negotiating prices for high-cost drugs, which could lower pharmacy bills.
Medicare Advantage plans will face tighter rules on extra perks, focusing on real health outcomes.
Expect increases in Part B premiums and IRMAA surcharges, especially for higher-income individuals.
What Next?
Here are a few key action items to keep in mind:
If you’re on a UCare Advantage plan, mark October 15, 2025, on your calendar for open enrollment.
Considering Medigap? 2026 brings more flexibility, but likely higher premiums—start exploring your options now.
Using Part D? Budget for the new drug cap and check which medications will be covered under negotiated pricing.
Each fall, review your annual notice of change to stay ahead of updates.
Stay Proactive
Medicare isn’t a “set it and forget it” program. The rules, costs, and your health needs can all change. Whether you’re preparing for your first enrollment or looking to optimize your current coverage, staying informed and proactive is essential.
Stay well balanced!
Chapters
0:00 … Introduction: Why Medicare Matters
0:43 … Medicare Basics: What You Need to Know
1:08 … Enrollment and Costs
2:09 … Minnesota-Specific Changes for 2026
3:28 … National Medicare Changes in 2026
4:17 … Your Action List
4:47 … Staying Proactive and Getting Help
5:20 … Regulatory
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These discussions aim to spark dialogue about enhancing retirement readiness and making more informed financial decisions. At Vector, we delve into the nuances of scenario planning, offer insights and guidance tailored to each client's unique circumstances. If you or someone you know is pondering their financial future or seeking clarity on their retirement plan, we're here to help.
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