Medicare open enrollment: key guidance for tax professionals

Medicare open enrollment runs through Dec. 7, and many of your clients may not realize how quickly this deadline is approaching. This is the window when individuals can review their Medicare options and make changes that will shape their coverage and costs for 2026.

Now is a good time to help clients understand the things they can change and how those choices affect their budget, prescriptions and planning for the year ahead.

What clients can do during open enrollment

Here’s what clients can adjust during open enrollment, through Dec. 7. They may:

• Switch between Original Medicare and a Medicare Advantage plan
• Move from one Medicare Advantage plan to another
• Join or change Medicare Part D prescription drug plans

Any changes they make now take effect Jan. 1, 2026.

Encourage clients to review whether their doctors, prescriptions or expected medical needs have changed since last year. Changes like these may mean it's time to adjust their plan.

Use Medicare.gov to compare plans quickly

Medicare.gov provides one of the easiest ways for clients to compare plan options. The comparison tool lets them review:

• Premiums and deductibles
• Estimated out-of-pocket costs
• Drug coverage and pharmacy networks
• Whether their preferred doctors participate in specific plans

If clients are satisfied with their current coverage, they do not need to take action. However, if income, prescriptions or medical needs changed during 2025, now is a crucial time to review coverage options.

Help clients use their my Social Security account

Individuals can use their my Social Security account for Medicare tasks. Through their account, clients can:

• Apply for Medicare Part A or Part B
• Check the status of a pending Medicare application
• View and print proof of Medicare coverage
• Update contact information

Tax professionals are often the first to see when a client's life events intersect with Medicare rules, including income shifts, coverage periods or HSA participation. Pointing clients to these tools can help prevent delays and reduce follow-up questions during open enrollment.

Guidance to share: how Medicare is funded

Many clients do not connect their payroll taxes to the Medicare program they may rely on. Medicare tax, also known as the hospital insurance tax, funds a portion of Medicare Part A (hospital insurance). 

• Employees pay the Medicare tax through payroll withholding by their employer. The employer is required to withhold 1.45% of the employee’s wages for Medicare tax and also pay a matching 1.45% as the employer’s share.
• Self-employed individuals pay the Medicare tax as part of their self-employment tax, which is 2.9% of their net earnings from self-employment (covering both the employee and employer portions).

Helping clients understand this connection may answer their questions about why Medicare Part A is generally premium-free for most people who worked and contributed payroll taxes. It also helps clarify why continued wages or self-employment income might still create Medicare tax obligations.

What to watch for in 2026 Medicare costs

Premiums, deductibles, and income-related monthly adjustment amounts (IRMAA), which are additional charges on Medicare Part B and Part D premiums for individuals with higher incomes, change annually. These updates affect the amount clients will pay for Medicare in 2026, particularly if their income has changed.

Here are the areas worth reviewing with clients:

• Whether higher-income clients may owe IRMAA
• How the 2026 IRMAA brackets differ from last year
• Expected 2026 premiums and deductibles for Parts A, B and D
• How modified adjusted gross income determines surcharge tiers

This matters for clients who may have capital gains, retirement income, business profits or other late-year income spikes that can push them into a higher IRMAA bracket without realizing it.

Support clients with simple year-end planning

Open enrollment is an ideal time to discuss practical choices that impact a client’s tax and medical situation. A short conversation can help clients:

• Budget for 2026 medical expenses
• Avoid surprises in prescription drug costs
• Confirm that their preferred providers remain in-network
• Understand when Medicare Advantage or Original Medicare may be a better fit
• Consider whether upcoming income changes could affect IRMAA

These conversations often naturally lead into other year-end tax planning topics, making this a valuable touchpoint for client relationships.

A good moment to act during open enrollment

Medicare decisions are financial decisions, and clients often require assistance in understanding their implications. Open enrollment provides them with an opportunity to adjust their coverage for the year ahead, and your guidance can help them make informed, confident choices.