Why Did Plans Change So Much in 2026?

Hello and welcome to our spring/early summer newsletter for 2026. When it comes to Medicare, I always strive to educate my clients, and will continue to provide you with excellent service for all of your Medicare and retirement needs. As I do every spring, I wanted to take a minute to give you some light reading to help educate on a recent Medicare topic or topics. This year I want to discuss something that is a little more complex, but is the crux of SO many questions we get from our clients. I always try to keep this newsletter shorter and "lighter", but this year I can't explain things well enough while keeping it that short, so this year this letter is a bit longer. However, I promise you will learn something!

Quick disclaimer: some of the information in this entry represents personal opinions and is subject to interpretation. While all items are believed to be 100% factually accurate, some use simplified language to connect the dots on incredibly complex topics.

The Perfect Storm

Unfortunately, this is the result of a perfect storm of inflation, bad government decisions, COVID-19, and corporate profits. So first, the massive bomb that hit was COVID-19. This shut down the economy in an attempt to slow the spread of the infection, which led to all sorts of other bad things, but for this conversation, it led to two main items: the Inflation Reduction Act of 2022 (IRA), and to people putting most semi-elective procedures and medical care on hold. As we came out of the COVID era, people started getting things done that they had put off. This happened all at once and quickly. Demand rose fast, and hospital systems and doctor offices took this as an opportunity to start making back money they lost during the shutdowns by raising prices to meet demand. Many people forget that when we had the COVID shutdown, just because no one could be in your business didn't mean the mortgage or rent wasn't still due, and many businesses — not just in the health space — had to raise costs to help offset what they lost. The higher prices and higher demand led to rampant Medical Inflation.

Why Are Plans Changing So Much?

The federal government also changed the way that the insurance plans are paid. Ever wonder why your insurance company is so insistent on sending a nurse out to see you for "House Calls"? Some of the things the plans are rated on are directly related to them. The government changed the system, and then got mad at the insurance companies for figuring out how to maximize the money they received due to those changes. Now they have changed things again, and companies are unsure what they are getting paid half of the time. This has caused a lot of uncertainty that has made plans pull back, and for the first time in the last two decades, the insurance companies were not looking to expand their client base. We even saw some of the largest Medicare plan providers in the country intentionally reduce their membership by hundreds of thousands of members.

This has created other problems such as plan suppression. When a company suppresses a plan, they remove it from all 3rd party enrollment platforms, and make it so that brokers and all others who enroll people in plans can no longer properly do so. People who are already on the plan are able to keep it, but for those who are not already on the plan it is hard to find out the plan even exists, let alone get enrolled in it. Carriers suppress plans for a few reasons. Sometimes, they just flat out don't want any new enrollments. They may have taken on too many clients already, or they screwed up something with the plan that is going to cause the plan to run red, or lose money. It can also happen due to new regulations. The PPO market has been significantly cut down due to the uncertainty that has come from certain regulations and the lack of networks to control cost. We can also see plans suppressed due to government sanctions. These sanctions occur when something has happened that makes either the state, CMS, or the federal government say, "Until you fix [insert problem], we will not allow you to accept any new members." These items have caused so much confusion where there shouldn't be.

The War Between Hospitals and Insurance Companies

Medical cost increases have caused an all-out war between hospital systems and the insurance companies. Have you noticed your medical providers getting more aggressive when referring to insurance lately? Maybe you are told something very negative regarding your insurance by your provider's office, and then told the opposite from me or your insurance's customer service? It's going both ways — neither side is happy. Costs have skyrocketed, the hospitals want more money, and the insurance companies don't want to meet their demands. But what happens when the insurance companies don't have a choice but to pay more, and Medicare fixes the amount of money that they get to offer you your plans? You guessed it — the member's cost, or your cost, goes up!

In 2026 we saw the average copays go up significantly across the board. Plans also decided that instead of really sticking it to members on core medical costs, many decided to reduce ancillary or extra benefits. Dental benefits lowered, food cards disappeared, OTC benefits got slashed, etc. Unfortunately, the "extras" reduction trend is something I don't think is done yet — do not be surprised if we see more cuts to these categories next year. But time will tell. For my Medicare Supplement clients, you most likely saw your monthly premium go up significantly. All of these items come back to one thing: our nation let inflation get out of control and is just now finally getting it contained.

The Inflation Reduction Act & Prescriptions

The Inflation Reduction Act (IRA), while well-intended, did NOT do any favors for Medicare. The IRA made MAJOR changes to Medicare, most notably on the Medicare Part D (prescription drug) side. On the surface a $2,000 member out-of-pocket cap sounded fantastic. No more donut hole? GREAT! But how were they paying for it? When all was said and done, these new changes cost significantly more than had been projected and budgeted for.

CMS, the government agency responsible for Medicare, also did not do a great job at properly giving the insurance companies details on how they needed to enact this new law. There was still confusion at many companies AFTER plans had already been filed for the next year (2025) in the summer of 2024. This caused many mistakes to be made.

Ok, that makes sense. But why did my prescriptions get so much more expensive in 2026 and not in 2025? Well, as I mentioned, there was still confusion when the plans were filed, and it seems many carriers got it wrong. The $2,000 member cap turned out to not be calculated based on the member's actual expenses or under the concept of "When you spend $2,000 on prescriptions you are done for the year." Instead, it is based on the bare minimum model — "The Defined Standard" — which means you have a $615 deductible and then 25% of the cost of all covered meds up to $2,000.

So let's say you have a $1,000 brand name medication which is a tier 3 medication. Under the old model you may have had a $47 copay. You paid your $47 copay and got your medication, the end. Eventually you reached the donut hole, and NOW you started paying 25%. Under the new model, if the plans allowed you to keep paying your $47 copay, they — the insurance company — eat the difference between $47 and 25%, in this case $203. If the plan elected to not add a deductible either, which means they also eat that cost, you as the member capped out to catastrophic coverage with only paying $329 out of your pocket. The insurance company ate the rest of the cost.

Unfortunately, Medicare is not paying the plans enough money to eat all of that cost, so what did almost every plan do? They dropped the flat co-pays and made them co-insurances, or percentage based. Now the plan may have a 16–25% coinsurance instead of that flat $47 copay. Almost all plans also added or increased their deductibles as well. Again, these plans didn't have a choice — the funding wasn't there for them not to! Many of us feel like this is another case of our federal government making laws on things they don't fully understand. But we are trying to change that, and MAKE THEM understand.

Fighting for Change in Washington

Due to the amount of chaos in the Medicare space, many of our legislators (Congress, Senate, and Government officials) are starting to really listen to us about the problems and some solutions. This past February, I personally was in Washington DC for Congressional Meetings on Capitol Hill with the National Association of Benefit and Insurance Professionals (NABIP). As a group we met with over 364 out of 435 congressional offices and 77 of the US Senate offices. I personally met with and spoke to 5 Ohio congressional representatives, and all members I met with were very receptive to our talking points regardless of which side of the aisle they are on. This is good, as many of our issues are not Republican issues or Democrat issues — they are American issues, and solving them is a benefit to both sides. One consistent item we got from Ohio reps and other state reps was "Give us data." Give us real world stories about what is going on and how it affects our voters. We are making progress at becoming a trusted source for our congressional representatives, but we need more stories!

Once again this is where you come in! We need more stories about how much brokers like myself help you within the Medicare space. This can be things like the basics of helping you understand and make a decision on the very complex initial plan selection when you turned 65; things like phone discussions about what to expect as you or a loved one went through a major diagnosis, and the cost and the upcoming event was worrying you; or even a good story about how I or my staff helped you figure out issues with a new prescription. I would appreciate it so much if you could take a few minutes to complete a short 5-question survey at https://bit.ly/TLC-NABIP. There is no need to print anything — simply fill out the survey and click Submit. Feel free to write as much or as little as you like.

I, along with thousands of other agents across the country, continue to collect these surveys and will be forwarding the information to CMS and your legislators. We need to make sure that CMS continues to understand the value we bring and the connection that we have with the members we service. As this industry continues to be under fire due to the major call centers' deceptive marketing, they need to understand that independent agents are not the problem. We provide a true service to those whom we assist and service. There is no better way to show the value of a local agent than to hear it from the members who are helped by those agents.

A Note on Reaching Us

You may have noticed it has been taking me a bit longer to get back to you when you call me directly. I almost never answer my phone "live" anymore. I am pulled in so many directions, it is almost always a voicemail then a returned phone call. To help address this I want to remind you that you are also welcome to call my office at 440-613-0083. Over the past year I added more local staff who are great at helping and servicing my clients with many of their requests and needs. I want to stress that I am and will always still be available to you and all of my clients when needed. However, in many cases you will be able to get faster service by speaking to a member of my office staff.

Requests such as replacement ID cards, checking on coverage for a new medication, looking up a new doctor to make sure they take your plan, or questions about how a service will be covered can be resolved much quicker by my staff. I now have staff who perform a customer service role instead of just administrative, so feel free to reach out to them on my office line. If you called my direct number during the annual enrollment period last year, you may have even dealt with the dreaded "this voicemail is full and…" I want to make sure we can get to you quickly so please feel free to talk with members of my staff. They are here to help you!

Over the last year we have also been giving our operations a very big upgrade on the technology front. As more and more of my clients use email, and the ability to give you better and more engaging content in a digital format, we are looking at moving this newsletter to an email newsletter (also posting them to this Blog). I am also looking to add additional newsletters throughout the year, which is much easier when print, envelope stuffing, and postage don't play a role. (My staff is excited for less of that too!) I will continue to physically send out our pre-enrollment period letter at the end of September, but things like this spring mailer and other newsletters we are going to try to start doing digitally.

I am missing email addresses for about 20% of my clients, so as we prepare for this digital move, I will be sending this newsletter out electronically to all of the email addresses I have on file. If you just stumbled upon this newsletter in the blog and did not come here from the emails I sent out, please send an email to my assistant, Penny, confirming your email address so we make sure everything is up to date. Please email [email protected] and simply provide your name and the email address you wish us to have on file. If you have a spouse, feel free to take care of both of you with one email.

Beyond going to digital newsletters we are also trying to enhance our online presence. One thing that is imperative to that is the presence of Google reviews. If you have been happy with the service that my team and I provide, we would love for you to take a minute to leave us a 5-star Google review by clicking here.

If you have any questions regarding these topics or questions on anything else, as always feel free to give my office a call at 440-613-0083 or reach me directly at 216-904-0049. My team and I are always here for you to help simplify your healthcare process. However, we are not always aware of changes to your health or situation, so if you need us, please reach out. No matter the question, we will always take the time to make sure you get your answers and fully understand them.

Should you have any friends or family who are trying to figure out their healthcare situation, feel free to pass along my name and number to them as well. I speak with individuals that have been referred on a weekly basis. In many cases I can help them; in others I advise them to stay where they are or take a route I cannot assist with. No matter what, if you send someone to me you can rest easy knowing that I will ALWAYS advise them to what is the most suitable option for their individual situation.

I hope you and your family have a wonderful rest of your spring and a great summer.

Sincerely,
Jay Rayl
TLC Insurance Group & Medicare Made Simple
8050 Corporate Cir. North Royalton, OH 44133