The Medicare Plan Mistake Retirees Should Avoid To Keep Their Money Safe

The main purpose of Medicare is to help cover retired Americans' medical expenses after they stop working. But with rising drug costs and shifting regulations, there's one mistake retirees make that could be costing them a lot of money: allowing their prescription drug plans to renew automatically.

Personal finance experts suggest retirees who use the Medicare Part D plan for prescription drugs, or a Medicare Advantage plan, should always look at other options when open enrollment comes along in October. That's because factors like deductions, shares of medication costs, and premiums can change from year to year. A retiree's circumstances, such as their drug regimen or the medication options available to them, can also shift in that time.

Medicare itself is changing, too, thanks in large part to the federal government. The retirees eligible for the One Big Beautiful Bill's "senior deduction" could see a lot of changes to their finances, and that includes their Medicare plans. With all these potential shifts, retirees may want to visit a Medicare webpage to explore various plans in their areas — even if they're happy with their current drug coverage. 

When it was enacted in 1965, Medicare came in the form of Medicare Part A and Medicare Part B. Now known as "Original Medicare," they covered many healthcare essentials, including treatment in hospitals, hospice stays, assisted living, and preventative treatment, but a lot still got left out. Namely, neither Part A nor Part B covers medications that are not directly administered by medical professionals.

This means retirees have two main choices to get prescription drug coverage. One option is to get a Medicare Part D drug plan that involves private companies that are subsidized and regulated by the federal government. Otherwise, they can get it through Medicare Advantage, an alternative to Original Medicare offered by private companies. Both routes have their own pros and cons, but it looks like both will become more expensive thanks to changes to Medicare made by the One Big Beautiful Bill Act and its funding cuts. 

Another reason to review plans prior to enrollment is that, according to the 2025 Medicare Trustees Report, Medicare Part D premiums are expected to rise around 6% while deductibles will increase from $590 to $615. Meanwhile, the Centers for Medicare & Medicaid Services report Medicare Advantage intends to offer fewer perks by 2026.

But that's not all. Another big change coming to Medicare in 2026 is a pilot program that may delay some treatments for Medicare recipients in an effort to fight fraud. The other Medicare cuts that may worry retirees will impact poorer seniors with new restrictions on the Medicare Savings Programs and the Part D low-income subsidy. This could mean that whatever Social Security cost of living adjustment increases are coming in 2026 will likely be used to cover increased healthcare costs for retirees.

On a brighter note, the Inflation Reduction Act is still in place, which gives the government the ability to negotiate prices with drug companies. As a rep for Apollo Insurance Group told Investopedia, this will make it more likely that prescribed meds will become more attainable for seniors. Vaccines also remain a free healthcare benefit you can get with Medicare.