If you’ve spent any time lately strolling through the historic streets of Fredericksburg or enjoying a quiet afternoon at a vineyard in Wimberley, you know that the Texas Hill Country is all about a slower, more intentional pace of life. But while the lifestyle here is peaceful, the administrative side of retirement: specifically Medicare: is anything but.
As we move through 2026, we’re seeing some of the most significant shifts in Medicare policy in decades. Between new out-of-pocket caps and adjustments to high-income surcharges, the plan you picked two years ago might be costing you thousands more than it should today.
At Texas Retirement Journal, we see these mistakes happen often, even among the most financially savvy retirees. Here are the seven biggest mistakes we’re seeing with 2026 Medicare plans and, more importantly, how you can fix them before they impact your wealth.
1. The "Plan Inertia" Trap
Most retirees in the Hill Country are loyal. We find a brand we like, a ranch supplier we trust, or a winery we visit every month, and we stick with them. While that’s great for the local economy, it’s a dangerous strategy for Medicare.
Every year, insurance companies adjust their "formularies": the list of drugs they cover and what they charge for them. A plan that covered your specific prescriptions for a $10 copay last year might have moved those same drugs to a higher "tier" in 2026, potentially doubling or tripling your costs.
The Fix: Never let your plan auto-renew without a 15-minute review. Use the official Medicare Plan Finder to input your current medications and see which plan offers the lowest total annual cost, not just the lowest monthly premium.
2. Misunderstanding the New $2,100 Part D Cap
You’ve likely heard the headlines: "Medicare Now Caps Drug Costs!" While it’s true that for 2026, the out-of-pocket cap for Part D is $2,100, many people are misinterpreting what that actually covers.
This cap applies only to covered Part D drugs. If you are taking a medication that isn't on your plan’s specific list, or if you’re receiving specialized "Part B" drugs (like infusions or certain injections administered at a clinic in Austin or San Antonio), those costs do not count toward that $2,100 limit.
The Fix: Verify your medications are on the plan’s formulary. If you have high-cost infusions, talk to your advisor about how those are categorized, as they may fall under your medical insurance (Part B) rather than your drug plan (Part D), leaving you exposed to 20% coinsurance without a proper supplement.
3. Falling Into the 2024 "IRMAA" Surprise
For the affluent residents of communities like Cordillera Ranch or Spanish Oaks, IRMAA (Income-Related Monthly Adjustment Amount) is the "hidden tax" of Medicare. If your income is above a certain threshold, you pay a surcharge on your Part B and Part D premiums.
The mistake? Forgetting that Medicare looks back two years to determine your 2026 premiums. That means your 2024 tax return is what matters right now. If you sold a business, offloaded a large piece of Hill Country real estate, or did a significant Roth conversion in 2024, you might be hit with a massive surcharge this year: even if your current 2026 income is much lower.
The Fix: If your income has dropped since 2024 due to a "life-changing event" (like full retirement, marriage, or the loss of income-producing property), you can appeal. Use Form SSA-44 to report the change to Social Security. Don't just pay the bill; ask for a reconsideration.
4. Missing the New 3-Month "Wrong Doctor" Window
New for 2026, Medicare has introduced a vital protection for those on Medicare Advantage plans. In the past, if you joined a plan because their directory said your favorite specialist in Boerne was in-network, only to find out it was a mistake, you were often stuck for the year.
Now, if a provider directory is inaccurate, you have a three-month window from the start of your coverage to switch plans or return to Original Medicare.
The Fix: Check your "in-network" status the very first week of January. Don't wait until you have an appointment in March. If there’s a discrepancy, you can exercise this new 2026 right to find a plan that actually includes your doctors.
5. "Premium Blindness" (Total Cost vs. Monthly Fee)
We often see retirees choose the plan with the $0 or $20 monthly premium because it feels like a win. However, in 2026, the maximum Part D deductible has risen to $615.
If you have a $0 premium plan with a $615 deductible and high copays, you might end up spending far more than if you had chosen a $40 premium plan with a $0 deductible.
The Fix: Look at the "Total Estimated Annual Cost" rather than the monthly sticker price. In the Hill Country, where we value quality and longevity, your Medicare plan should be viewed as a tool for wealth preservation, not just a monthly line item to be minimized.
6. The HSA Conflict for Late-Retirees
Many business owners and professionals in the Austin-San Antonio corridor are working well past 65. A common (and expensive) mistake is continuing to contribute to a Health Savings Account (HSA) once you’ve enrolled in any part of Medicare.
Once you are on Medicare, you can no longer contribute to an HSA. If you do, you face tax penalties and a complicated mess with the IRS. Furthermore, if you wait until 70 to claim Social Security, Medicare Part A is often backdated six months, which can catch you off guard if you were still making HSA contributions during that window.
The Fix: Stop all HSA contributions at least six months before you plan to enroll in Medicare or apply for Social Security. Consult with a fiduciary financial advisor to coordinate the timing of your healthcare and retirement income.
7. Ignoring the "Spread" (The Medicare Prescription Payment Plan)
For those with high-cost medications, the first few months of the year used to be a financial shock as you raced to meet your deductible. In 2026, the Medicare Prescription Payment Plan allows you to spread your out-of-pocket costs evenly over the 12 months of the year.
The Fix: If you have a medication that costs several hundred dollars a month, opt-in to this payment plan through your insurer. It’s essentially a 0% interest way to manage your cash flow, leaving more of your capital available for your lifestyle and investments.
The Bottom Line for Your Hill Country Retirement
Medicare is no longer a "set it and forget it" system. The rules are changing faster than ever, and for those with significant assets to protect, the cost of a mistake isn't just a higher premium: it's a threat to your strategic wealth protection.
Retirement should be about enjoying the view from your porch or finding the perfect vintage at a local winery, not stressing over Medicare Part B deductibles. By addressing these seven mistakes, you can ensure your healthcare plan works for you, rather than against your bottom line.
Ready to ensure your retirement plan is optimized for 2026 and beyond?
Schedule a call with a fiduciary financial advisor today: https://calendly.com/portafoliocapital/15min
Learn more about Portafolio Capital Management dba Mau Sanchez Capital at https://portafoliocapital.com/ or give us a call at (512) 593-8380.
Portafolio Capital Management dba Mau Sanchez Capital is a Registered Investment Adviser. This content is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any security. Advisory services are provided only pursuant to a written advisory agreement.
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