A Guide for Retirees to Sign up or Make Changes

One of the most important time periods is underway for retirees on Medicare—open enrollment.

This annual period provides an opportunity for Medicare recipients to renew or change their health plans. It’s important that participants take the time to review their coverage, especially prescription drug coverage. There could be changes or updates that may have an impact on health care coverage or services. There also may be an opportunity to change plans and save money on premiums.

Many seniors will seek advice

For those age 65 and older, Medicare forms the foundation of health coverage. Today, more than 67 million people are enrolled, and that total is expected to exceed 80 million in 25 years.

Medicare does not cover everything, and generally, supplemental coverage is needed. Many investors find it confusing to navigate the program. To understand the basics of how Medicare works, read our education piece, “Three key things to understand about Medicare.”

Opportunity for change

Each year, Medicare holds an open enrollment period that allows participants to sign up or change existing plans and supplemental coverage. Enrollment is available for individuals age 65 and older, as well as people with disabilities.

According to AARP, many enrollees overlook this chance to save money and improve their coverage. The Kaiser Family Foundation notes Medicare participants could save thousands of dollars by choosing a prescription drug or Medicare Advantage plan that best fits their needs.

This year, the open enrollment period to select a 2026 plan runs from October 15, 2025, through December 7, 2025.

Medicare open enrollment: October 15 to December 7

Possible changes for retirees to consider

1. Switch to a different Medicare Part D plan

It is not uncommon for a Medicare Part D plan to change its list of covered drugs, which may lead to higher out-of-pocket expenses. Individuals on Medicare should closely monitor and analyze their “Plan Annual Notice of Change” document, which details any changes to costs and coverage for the upcoming year. The document is typically mailed by the end of September. Participants can also contact the provider directly. If the new drug formulary no longer covers essential prescriptions, enrollees may want to research other Part D plans that can address their needs. You can find the Medicare plan comparison tool, “Medicare Plan Finder,” online. All Medicare plans will include a $2,000 cap on what you pay out-of-pocket from prescription drugs covered by your plan. A new payment option was also introduced this year to help manage out-of-pocket costs for drugs covered by an individual’s Medicare drug plan or Medicare health plan with drug coverage (like a Medicare Advantage Plan) by spreading the costs across the calendar year, called The Medicare Prescription Payment Plan.

2. Compare Medicare Advantage plans

Medicare Advantage plans are private plans that combine Medicare Parts A, B and D. They typically offer additional benefits such as vision, dental and hearing coverage. For 2024, the limit on annual out-of-pocket expenses is $8,850 for in-network services and $13,300 for in-network and out-of-network services combined.

Enrollment in Medicare Advantage plans has nearly doubled over the past decade, with many participants seeking to lower premiums and out-of-pocket costs, as well as more comprehensive coverage. Today, more than 32 million people are enrolled in Medicare Advantage (KFF). This represents a little more than half of the eligible Medicare population. However, like Medicare Part D, the drug formularies that companies use may change from year to year. As a result, retirees should make sure important prescription drugs are still covered under the plan. Also, because most Medicare Advantage plans are administered as health maintenance organizations (HMOs), plan participants should monitor any changes to their list of covered providers.

Lastly, those who have moved or are contemplating moving to a different state will need to determine if their current plan is available in their new home state. In addition, there may be plans available in your new home state that are better suited for your needs that were not available in your previous home state.

3. Change from Medicare Advantage to original Medicare (or vice versa)

While Medicare Advantage plans typically offer additional benefits not included with original Medicare, these services come with an important trade-off. Participants must receive services in-network, or risk potentially high out-of-pocket expenses. Individuals who relocate or anticipate the need to receive care from out-of-network providers may place a higher premium on flexibility than cost. Retirees switching from Medicare Advantage to original Medicare will want to add a supplemental Medigap policy to avoid the possibility of significant out-of-pocket costs.

Here’s a look at some of the differences in supplemental coverages: Medicare Advantage versus obtaining a Medigap policy.

Health care is part of a comprehensive plan

Health care is one of the leading concerns among individuals planning for retirement. With costs continuing to increase, and rising inflation weighing on purchasing power, planning for future health expenses is of vital importance among individuals still in the workforce as well as those in retirement.

Maintaining adequate health care coverage is a vital part of a comprehensive retirement plan. Unexpected medical bills can drain savings that otherwise could have been used for traveling and philanthropy, as well as leaving a legacy of wealth for family members. Working with qualified professionals during the open enrollment period may help individuals improve coverage and manage future health care costs.

Check out the “Medicare and You Guide for 2026” for more detailed information.

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WHAT ARE THE RISKS?

All investments involve risks, including possible loss of principal.

Any information, statement or opinion set forth herein is general in nature, is not directed to or based on the financial situation or needs of any particular investor, and does not constitute, and should not be construed as investment advice, forecast of future events, a guarantee of future results, or a recommendation with respect to any particular security or investment strategy or type of retirement account. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies should consult their financial professional.

Franklin Templeton, its affiliated companies, and its employees are not in the business of providing tax or legal advice to taxpayers. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon by any such taxpayer for the purpose of avoiding tax penalties or complying with any applicable tax laws or regulations. Tax-related statements, if any, may have been written in connection with the “promotion or marketing” of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.