The Annual Notice of Change, read like a spec sheet. The seven lines that matter, the two meters people confuse, and what your plan can change mid-year without asking.

Part seven of Healthcare in Retirement. Same warning as the math pieces in week one: I am not an advisor. I am an engineer. When a document lands on my desk I read it the way I read a spec sheet, what changed, by how much, and what it costs me. That is all I did here. The advisors turn it into a decision for your actual plan. I just show you where to look.

The situation

The letter arrived. It is a booklet, really, and it opens with a sentence that tells you the deadline and then tells you that if you do nothing you keep what you have. Most people stop there. One caller this fall put the whole problem in a sentence: "She's receiving an annual notice of change to a plan that's not changing." Another, in December: "I didn't know why my friend's Medicare premium went up but mine didn't." The letter had the answer both times. Nobody read page two.

What the letter is, and when it has to arrive

Medicare's mailing guide says "By September 30, people will get a notice from their current plan" outlining next year's formulary, benefit, and premium changes. The regulation behind that date requires plans to "notify all enrollees at least 15 days before the beginning of the Annual Coordinated Election Period", and that period starts October 15. Medicare's plain description: the notice "includes any changes in coverage, costs, and more that will be effective in January."

It has a companion. The Evidence of Coverage is the full contract, the one that "gives you details about what the plan covers, how much you pay, and more." The rules say it has to reach you "by the first day of the annual coordinated election period," which is October 15. The notice itself says so on page one: "Note this is only a summary of changes. More information about costs, benefits, and rules is in the Evidence of Coverage." If you have the short one and not the long one yet, that is normal.

The layout, straight from the template

Here is the thing that made this easy. Every plan builds its letter from the same government template. Medicare publishes it as the Model Annual Notice of Change, and I pulled the 2027 version. So whatever company you are with, your letter has these sections, in this order:

• Summary of Important Costs for 2027. A table with two columns, "2026 (this year)" and "2027 (next year)," and seven rows: monthly plan premium, deductible, maximum out-of-pocket amount, primary care office visits, specialist office visits, inpatient hospital stays, and Part D drug coverage. This is page two. This is the spec sheet.
• Section 1.1, Changes to the Monthly Plan Premium.
• Section 1.2, Changes to Your Maximum Out-of-Pocket Amount.
• Section 1.3, Changes to the Provider Network.
• Section 1.4, Changes to the Pharmacy Network.
• Section 1.5, Changes to Benefits & Costs for Medical Services.
• Section 1.6, Changes to Part D Drug Coverage. The drug list.
• Section 1.7, Changes to Prescription Drug Benefits & Costs. The drug prices.
• Then administrative changes, how to change plans, deadlines, and where to get help.

Seven rows in the table, seven sections behind them. Read the table first. Then read only the sections where a number moved.

Showing the work on a made-up plan

The numbers below are an illustration, not any real plan. Yours are in your own table. But the shape of the arithmetic is the point, so here is a plan whose premium did not move at all:

A $0 premium that stayed at $0 tells you nothing. That plan got $524 more expensive in an ordinary year and $1,724 more expensive in a bad one, and page one still says you can keep it by doing nothing. Which is true. It just costs more. And a reminder from part three: a plan with no premium of its own still means you pay Part B, and which plans are available varies by county.

The two meters

This is the single most common misunderstanding I hear, so I will let the template say it: "Our plan premium and your costs for prescription drugs don't count toward your maximum out-of-pocket amount." Two separate caps, two separate meters. Section 1.2 is the medical cap. Section 1.7 is the drug side, which has its own cap under federal law.

For scale, the ceilings Medicare sets. In 2026 an Advantage plan's in-network out-of-pocket limit "may not exceed $9,250 for in-network services and $13,900 for in-network and out-of-network services combined." For 2027, Medicare's published limit calculations set the mandatory in-network maximum at $9,850 and the combined maximum at $14,800. On the drug side, the 2026 out-of-pocket cap is $2,100 on covered Part D drugs and the highest deductible a drug plan may charge is $615. For 2027, Medicare's rate announcement raises those to a $2,400 cap and a $700 maximum deductible. The out-of-pocket limits and the $700 are ceilings, not your plan, and most plans sit below them. The $2,400 drug cap is the same for everyone. Yours is in the table.

The two sections people skip

Section 1.3, your doctors. The template language is blunt: "Our network of providers has changed for next year. Review the 2027 Provider Directory to see if your providers (primary care provider, specialists, hospitals, etc.) are in our network." Nobody checks. Check. The same section warns that the network can also change during the year, and that you may get a special enrollment period if your provider leaves. The rule requiring that notice is 42 CFR 422.111(e).

Section 1.6, your drugs. "We made changes to our Drug List, which could include removing or adding drugs, changing the restrictions that apply to our coverage for certain drugs, or moving them to a different cost-sharing tier." That last clause is the $444 in my table. A drug does not have to disappear to get expensive. It only has to move down a tier.

What they can change mid-year without asking

Networks, as above. And drug lists. Medicare says "Plans can change their drug list at any time. Your plan must notify you of any changes to their drug list that affect drugs you're taking." The rule gives you at least 30 days' notice, or a month's supply plus written notice, with two real exceptions: a brand drug being swapped for its generic or biosimilar, and a drug pulled from the market for safety. The template tells you as much, in its own words: "You might get information on the specific change after the change is already made." If your pill changed without warning, you have not necessarily been wronged. You have met the exception.

What to do with it this week

Compare your table to the plans that will be listed for 2027. Medicare's calendar entry for October 1 reads: "Get ready for Open Enrollment: Review any notices from the current plan about cost and benefit changes for next year. Then, visit Medicare.gov/plan-compare to preview plan options for the upcoming year." If the letter never came, or you went paperless and it is buried in an inbox, the plan is required to get you one. Ask. And if the letter says the plan is ending rather than changing, that is a different letter with different rights, and yesterday's article is the one you need.

What a Certified Medicare Planner® does differently

They do not read the letter. They read the table, then they read the two sections nobody opens, 1.3 and 1.6, against your actual doctors and your actual prescriptions. They know the difference between a ceiling Medicare publishes and the number your plan chose, and they never tell you "your deductible will be $700." They run the arithmetic I ran above for the year you actually had, not the year the brochure imagines, and they run it for both meters. Then they compare that number against the 2027 list the day it goes up. The advisors are at 602-281-3898.

Friday, October 2. Foothills Library, Glendale, 10:30 AM. Mustang Library, Scottsdale, 2:30 PM. No cost. Register at 123easymedicare.com/medicare-workshop or call (877) 220-1089.

Next in Healthcare in Retirement: five enrollment periods, one word. Medicare's own website calls the fall window "Open Enrollment," the regulation calls it something else, and January has an "Open Enrollment" of its own. Every period defined, with sources, and a short path to the one that is actually yours.

This event is presented by 123EasyMedicare, a brand of American Retirement Advisors, an independent, private organization. It is not sponsored by, endorsed by, or affiliated with Medicare, the Centers for Medicare & Medicaid Services, the Social Security Administration, or any government agency. The libraries are not sponsors of, and are not affiliated with, this event. Educational only; not tax, legal, or insurance advice.

Disclaimer: This article is for educational purposes only. It is not sponsored, endorsed, or otherwise representative of Medicare or the federal Medicare program. American Retirement Advisors is not a government agency. For official Medicare information, visit medicare.gov or call 1-800-MEDICARE (1-800-633-4227).