How to choose the best health insurance plan for your budget as open enrollment season gets underway
The high cost of health care is a major concern for many as open enrollment gets underway this week.
The annual period to sign up or change your health insurance starts Oct. 15 for millions of people on Medicare, while open enrollment through the Affordable Care Act government marketplace begins on Nov. 1.
Recent polling shows widespread worry among Americans about affording medical services and bills. The nonpartisan health policy organization KFF found a substantial number say they've had to borrow money or skip care due to costs.
Health plans change every year, so experts say it's important to take stock during the renewal process and not to assume you'll have the same coverage.
Medicare
The open enrollment period for older adults on Medicare runs from Oct. 15 to Dec. 7. Updated drug prices and a new prior authorization process are among the changes coming in 2026.
Nearly 70 million people in the U.S. get health coverage under the Medicare system.
The Centers for Medicare & Medicaid Services (CMS) estimates there will be about 5,600 Medicare Advantage Plans available nationwide in 2026, near the same number as in 2025.
The out-of-pocket cap on Part D drug plans is set to increase slightly from $2,000 to $2,100.
With Medicare now having the authority to directly negotiate the price of high-cost drugs, the first set of negotiated lower prices is set to take effect in 2026 on 10 drugs. You can find the full list here on the CMS website.
Popular weight loss drugs, like Ozempic and Wegovy, are not included yet but will be added to the list by 2027, according to CMS.
You might face new prior authorization requirements for certain tests and procedures under traditional Medicare. A new artificial intelligence authorization process, which is already common with private insurance, will be tested in six states next year, including New Jersey.
Affordable Care Act
The open enrollment period for those who get their health insurance through the government marketplace runs from Nov. 1 to Jan. 15, 2026.
But questions remain about the renewal of tax credits that help 22 million Americans lower their health insurance costs when they buy policies through the Affordable Care Act's marketplaces.
The subsidy, used by millions of low- and middle-class households since it was authorized under the American Rescue Plan Act in 2021, is set to expire at the end of 2025. A battle to extend the credits is at the center of the ongoing federal government shutdown.
Without the tax credits, KFF estimates annual premiums will more than double. For some, that could mean a jump of more than $1,200 dollars a year.
"We know that this is a group of people who are more likely to be associated with a small business, to own a small business, to work for one, or to be part of the gig economy and have volatile incomes year to year where it's hard for them to estimate what they're going to be making in the next year," said KFF policy analyst Matt McGough.
"Any hit like this, where you're paying over $1,000 more for health care coverage, can really be substantial."
McGough said consumers should prepare for "sticker shock" as many insurers in the marketplace have already adjusted prices to account for the end of the tax credit. He said it wouldn't be a simple task to readjust rates in the event of a last-minute deal, which he worries could cause confusion.
"An eleventh-hour change could mean that people see higher prices when they shop, and then potentially have to recheck if Congress acts," he said. Then the burden is on the marketplaces, the state and federal systems, or the insurers to recalculate these rates and let the consumers know."
It's anticipated that many will be forced to drop their insurance altogether.
Employer-sponsored plans
Open enrollment periods for employer-sponsored plans vary.
Recent employer surveys indicate health plan costs for private plans will climb next year, either in the form of increased premiums or through higher copays and deductibles.
Contribution limits have increased for both health savings accounts (HSA) and flexible savings accounts (FSA). Additionally more Marketplace plans can be used with HSAs starting next year.
McGough warns the potential for millions of people to lose coverage once the ACA tax credits end could also contribute to higher premiums for everyone.
"There's going to be more uninsured people that show up at the hospital and clinics and potentially are receiving uncompensated care, which increases premiums across the health care system," he said. "Those costs don't disappear, they get absorbed by the system."
