Millions of Medicare beneficiaries enrolled in Medicare Advantage or Part D prescription drug plans will receive an annual notice of change this fall. It may be one of the most consequential Medicare documents they receive all year.
The notice compares a plan’s current costs and coverage with what it will offer in 2027. Those changes can affect premiums, prescription drug coverage, cost-sharing, and supplemental benefits.
Jae Oh, a certified financial planner and author of “Maximize Your Medicare,” said beneficiaries should not assume that a plan that worked in 2026 will remain their best choice in 2027. Even members who are healthy, take few medications, and have been satisfied with their coverage should review the notice before allowing the plan to renew automatically.
Below is a transcript of the interview with Oh, edited for brevity and clarity.
What is an Annual Notice of Change?
Bob Powell: What is the annual notice of change?
Jae Oh: Every person enrolled in a stand-alone Part D prescription drug plan or a Medicare Advantage plan receives an annual notice of change, commonly called an ANOC. Every carrier is required to send it.
It is easy to throw it in the trash, but I highly discourage that because the notice describes changes that can affect what you pay and the coverage your plan provides in 2027.
If I had to choose one document that every member should open, this is it.”
What should beneficiaries review first?
Powell: What should people examine in the fine print?
Oh: The Centers for Medicare and Medicaid Services requires plans to provide side-by-side information showing what members incurred in 2026 and what they will incur in 2027.
Look for changes to the monthly premium, drug formulary, and other important coverage provisions. The formulary is the list of medications the plan covers.
The notice provides accurate information about the plan as a whole, but it cannot tell you exactly how much you personally will be affected. You have to determine whether each change applies to your medications, providers, and circumstances where you live.
How can drug coverage change?
Powell: What should people with Medicare Advantage drug coverage or a stand-alone Part D plan investigate?
Oh: Check whether your medications remain covered and whether they have moved to different tiers. Also examine changes in copayments, coinsurance, prior-authorization requirements, and step therapy.
The big issue for 2027 may be the end of additional subsidies that the Centers for Medicare and Medicaid Services has been providing to Part D plans, including prescription drug coverage within Medicare Advantage plans.
That money will cease at the end of 2026, and plans will have to recover it in some form. That could mean higher premiums, higher copayments for certain medications, or different coinsurance percentages.
It is difficult to know how large those changes will be until the new plan terms are released.
Can doing nothing be reasonable?
Powell: Is there ever a case in which someone reads the annual notice and decides to do nothing?
Oh: Certainly. The plan may still be doing its job. You may be satisfied with its benefits, provider network, and supplemental offerings, such as dental, vision, fitness, or over-the-counter benefits.
If you do nothing, your 2026 plan will generally renew for 2027. But health care delivery is volatile. Pharmacies, doctors, hospitals, and insurers all face changing conditions.
You should reconsider your existing arrangement each year and determine whether it remains the best option for 2027. Doing nothing should be a decision, not an oversight.
How does the payment plan work?
Powell: What should beneficiaries know about the Medicare Prescription Payment Plan?
Oh: The Medicare Prescription Payment Plan is designed to smooth prescription expenses across the year. Paying a large amount at once, including costs associated with a Part D deductible, can be difficult.
The program allows beneficiaries to spread anticipated out-of-pocket prescription costs over the year rather than paying the full amount at the pharmacy when a prescription is filled.
What do star ratings mean?
Powell: Have there also been changes involving Medicare star ratings?
Oh: The star-rating system has faced litigation, and carriers have been largely successful in appealing some decisions by the Centers for Medicare and Medicaid Services.
The outcome can affect the money available to carriers and, indirectly, the supplemental benefits included in their plans. But those financial disputes are not particularly useful when an individual is choosing a Medicare Advantage or Part D plan.
For beneficiaries, the better approach is to focus on the plan’s actual costs, drug coverage, provider network, and benefits.
How have Medicare marketing rules changed?
Powell: What changed concerning the 48-hour waiting period for Medicare plan appointments?
Oh: The Centers for Medicare and Medicaid Services has long been concerned about how Medicare plans are marketed. Agents and brokers use a regulated form known as a scope of appointment to document what will be discussed with a beneficiary.
Previously, someone who contacted an agent could be required to wait 48 hours before an appointment. That waiting period no longer applies in the same way.
If you already know and trust your insurance agent, representative or broker, you should be able to work with that person much as you have in the past.
Why should everyone open the notice?
Powell: What deserves to be reemphasized?
Oh: The annual notice of change is the one document everyone should open, even if you are in good health, take only one or two medications, and have been happy with your Medicare Advantage plan for years.
The forces affecting Medicare involve every part of healthcare delivery, including pharmacies, doctors, hospitals, and insurance carriers. It is better to review the changes with your eyes wide open than to be blindsided by an unexpected cost or coverage problem later.