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Reasons for MA Plan Cuts – What’s going on

Recently, many insurers are pulling back or dropping Medicare Advantage plans in certain counties. Many Medicare advantage carriers are reducing offerings. This is especially true for PPO plans, which tend to be less restrictive for patients, but also costlier/riskier for insurers. Here’s a breakdown of the reasons for MA plan cuts and why some Medicare Advantage (MA) plans are leaving the market, what it means for enrollees, and how to prepare.

Why Some Medicare Advantage Plans Are Leaving the Market

In 2025 and beyond, several major insurers are scaling back or exiting certain Medicare Advantage (MA) markets. Companies like UnitedHealthcare, Humana, and Aetna are discontinuing specific plans or leaving select counties, affecting hundreds of thousands of beneficiaries. So, what’s driving these exits and what does it mean for Medicare enrollees?

Rising Costs and Slower Reimbursements

The main driver behind these exits is financial pressure. Health care costs; doctor visits, hospital stays, and prescription drugs continue to rise. Meanwhile, the Centers for Medicare & Medicaid Services (CMS) has limited how much funding increases for MA plans each year.

When reimbursement rates don’t keep pace with actual medical spending, insurers are forced to make tough decisions. Some reduce coverage areas; others leave markets entirely. The challenge is even greater in rural counties, where fewer enrollees mean higher per-member costs and less opportunity to spread financial risk.

Increased Regulation and Administrative Burdens

Medicare Advantage plans are subject to strict federal oversight. CMS star ratings, which measure quality and satisfaction, directly affect plan payments and bonuses. Plans with low ratings can face penalties or reduced funding.

New rules around prior authorization, marketing practices, and network adequacy have also added administrative costs. While these policies aim to protect consumers, they make operating certain plans more expensive and complex; especially for smaller carriers.

Shrinking Margins and Risky Plan Types

Preferred Provider Organization (PPO) plans, which allow greater provider flexibility, are especially expensive for insurers to run. In response, many companies are narrowing their focus to Health Maintenance Organization (HMO) plans with tighter networks and lower costs.

However, even with these adjustments, many insurers report that the combination of higher utilization, slower reimbursements, and increased regulation has made some plans unsustainable. As a result, certain counties are seeing fewer plan options for 2026.

Cutting Back on Benefits

To stay competitive and manage costs, insurers are also reducing extra benefits that have become popular selling points for Medicare Advantage plans.

Perks such as dental, vision, hearing, over-the-counter allowances, and fitness memberships are being scaled back or dropped altogether. Some plans have increased copays for specialists, raised out-of-pocket maximums, or restricted drug formularies.

While these changes help insurers control spending, they can leave beneficiaries with fewer incentives to stay on a plan—prompting more people to explore other options like Original Medicare with a Medigap supplement.

What This Means for Beneficiaries

If your Medicare Advantage plan is ending or changing benefits, you’ll receive an Annual Notice of Change (ANOC) this fall. It’s important to read this document carefully. You may find that your premiums, networks, or covered benefits are changing even if your plan remains available.

Here’s what to watch for:

• Fewer local plan options—especially in smaller or rural markets.
• Higher out-of-pocket costs due to benefit reductions or network changes.
• Provider access changes as plans narrow their networks.
• Reduced extra benefits, such as dental, vision, and wellness perks.

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If your plan is leaving your area entirely, you’ll qualify for a Special Enrollment Period (SEP) to choose a new plan or return to Original Medicare.

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What You Can Do

1. Review your ANOC early to understand all upcoming changes.
2. Compare new plans on Medicare.gov or with a licensed agent to see what’s available in your ZIP code.
3. Look beyond the premium. Consider total out-of-pocket costs, copays, and your provider network.
4. Verify your prescriptions. Ensure your medications are still covered under the plan’s formulary.
5. Explore Medigap and Part D options if you want more stability or broader provider access.

The Bottom Line

Medicare Advantage remains a strong and growing program, but rising costs and tighter reimbursement rules are forcing insurers to reassess their participation. Many are choosing to leave certain counties or reduce extra benefits to stay financially viable.

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For beneficiaries, staying informed is key. Review your plan each year, compare options carefully, and don’t assume your current benefits will stay the same. A little preparation can help avoid surprises and ensure you continue to get the coverage and care you need.

Medicare Part B Costs 2026

Medicare Part B helps cover medically necessary outpatient services, doctor visits, preventive services, medical equipment, and more. Because like many aspects of health care, its costs change annually, We will discuss the Medicare Part B costs 2026. beneficiaries and future enrollees need to know what’s ahead.

Below, we explore the projected premiums, deductibles, income-based surcharges (IRMAA), and strategies for planning.

What’s Covered by Part B & Basic Costs

Before diving into 2026, here’s a quick recap of how Part B costs typically work:

• You pay a monthly premium for Part B (unless you qualify for assistance).
• You also pay a yearly deductible before Medicare pays (for most services).
• After meeting the deductible, Medicare generally covers 80% of approved costs for covered outpatient services; you’re responsible for the remaining 20% coinsurance (unless another plan helps).
• If your income is above certain thresholds, you may pay an extra surcharge (IRMAA).
• Costs can vary based on where you live, your coverage options (like Medigap or Medicare Advantage), and your income.

These rules remain consistent, even as dollar amounts shift over time.

Projected Part B Premium in 2026

According to the Medicare Trustees’ projections and other financial analysts, the standard Part B monthly premium is expected to rise from $185 in 2025 to $206.50 in 2026 an increase of $21.50, or roughly 11.6%.

That jump would be the largest single-year dollar increase in recent years.

It’s crucial to note: this “standard” premium applies to beneficiaries without additional income-based surcharges (i.e. those whose incomes fall under the IRMAA thresholds). Those with higher incomes will pay more.

Expected Part B Deductible in 2026

While the exact deductible for 2026 will not be finalized until closer to year-end 2025, current projections suggest it may rise from $257 in 2025 to $288 in 2026.

That would be a roughly 12% increase in the amount beneficiaries pay out of pocket before Medicare starts covering your outpatient services.

Some Medigap (supplemental) plans cover the deductible; others require you to pay it yourself, so an increase could matter more to those on certain Medigap plans.

Income-Related Monthly Adjustment Amount (IRMAA) for 2026

One of the most significant cost levers in Medicare is the IRMAA surcharge: higher-income beneficiaries pay extra on top of the base premium. Here’s what’s projected for 2026:

• The 2026 IRMAA brackets and surcharge amounts are based on modified adjusted gross income (MAGI) from your 2024 tax return.
• The income thresholds (for moving among surcharge tiers) are expected to be indexed upward (adjusted for inflation) for 2026.
• The average surcharge increases for Part B are projected to be modest; around 1.04%.

Because of IRMAA, two people in the same city with different incomes might pay very different Part B amounts.

Why Are Costs Rising

Several forces contribute to rising Medicare Part B costs:

1. Medical inflation and utilization – Outpatient services, physician-administered drugs, diagnostics, and usage of health services often rise faster than general inflation.
2. Aging population / higher demand – As more retirees enter Medicare and health care needs grow, the burden on the system increases.
3. Cost shifting – Higher-income beneficiaries absorb more of the cost via IRMAA, but base premiums still have to cover a portion of system-wide costs.
4. Policy adjustments & fund dynamics – Adjustments to how much premiums are allowed to cover, budget pressures, and funding decisions all play a role.
5. Legislative changes – New laws affecting drug pricing, Medicare rules, and benefit design indirectly affect Part B costs over time.

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What It Means for Beneficiaries

• Budget impact: That extra $21.50 per month may absorb a significant chunk of any Social Security cost-of-living adjustment (COLA). Indeed, projections show much of retirees’ COLA gains may be eaten by higher health costs.
• Planning ahead: If your income is near an IRMAA threshold, small changes (e.g. capital gains, extra work income, withdrawals) could push you into a higher bracket.
• Review your coverage: Supplemental (Medigap) or Medicare Advantage plans may mitigate some out-of-pocket costs. If your Medigap plan covers the Part B deductible, the increase matters more.
• Appeal or exemption: If your income decreases substantially due to life events (e.g. retirement, widowhood), you may be able to appeal IRMAA adjustments.
• Stay informed: Final Medicare pricing is announced in late 2025. Propose your budget accordingly but expect adjustments.

Tips to Manage the Cost Increase

1. Estimate your 2024 MAGI now — knowing whether you might cross an IRMAA threshold will help with tax planning or withdrawals.
2. Delay or stagger income where possible — if legally and financially feasible, deferring income from 2024 may help you stay lower in the IRMAA tiers.
3. Choose the right supplemental plan — some Medigap policies cover the Part B deductible or reduce your coinsurance burden.
4. Stay within the initial enrollment windows — avoid late enrollment penalties, which add to cost burdens.
5. Appeal IRMAA where applicable — if you experience life-changing events, you may qualify for exceptions.
6. Watch your investments and gains — high capital gains or distributions in 2024 could unexpectedly push your MAGI upward.

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Bottom Line

Based on current projections:

• The standard Part B premium in 2026 may reach $206.50 per month, up from $185 in 2025.
• The deductible is expected to rise to about $288.
• Income-based surcharges (IRMAA) may add considerably more for higher earners.
• The increase is sizable and could erode a portion of any Social Security increase.
• Planning ahead; particularly regarding your 2024 income, can help reduce the surprise.

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Which Vaccines Does Medicare Cover

Vaccinations are an important part of preventive healthcare, especially for older adults who may be at higher risk of serious illness. Fortunately, Medicare provides coverage for many common vaccines, but which vaccines does Medicare cover? Additionally, knowing which part of Medicare covers what can help beneficiaries avoid surprise costs.

Vaccines Covered by Medicare Part B

Medicare Part B covers certain vaccines that are considered medically necessary for disease prevention. These include:

• Flu shot (Influenza vaccine): Covered once per flu season, and sometimes more if medically necessary.
• Pneumococcal vaccine: Helps prevent pneumonia and other infections. Medicare covers two different pneumococcal shots at no cost when given at least one year apart.
• Hepatitis B vaccine: Covered for beneficiaries at medium or high risk (such as those with diabetes, liver disease, or certain occupational exposures).
• Vaccines needed due to injury or exposure: For example, if you’re exposed to rabies or step on a rusty nail and need a tetanus shot, Medicare Part B covers it.

There’s no deductible or copayment for these vaccines if you receive them from a provider who accepts Medicare assignment.

Vaccines Covered by Medicare Part D

Medicare Part D (prescription drug coverage) handles most other commercially available vaccines that are not covered by Part B. This includes:

• Shingles (Herpes Zoster) vaccine
• Tetanus, Diphtheria, and Pertussis (Tdap) vaccine when not related to an injury
• RSV (Respiratory Syncytial Virus) vaccine for older adults
• Travel vaccines, such as those for hepatitis A or typhoid, depending on your plan

Part D plans must cover all vaccines recommended by the Centers for Disease Control and Prevention (CDC) that aren’t already covered by Part B. Since 2023, beneficiaries pay no out-of-pocket costs for these recommended vaccines under Part D.

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Why Staying Up to Date Matters

Getting the right vaccines can help prevent hospitalizations and serious illness. With Medicare’s expanded coverage, beneficiaries can stay current on vaccinations at little to no cost. It’s always best to check with your provider or Part D plan to confirm coverage before receiving any vaccine

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Medicare makes it easier than ever to stay protected. Part B covers flu, pneumonia, Hepatitis B (for those at risk), and vaccines needed due to injury, while Part D covers all other recommended vaccines; often at no cost.

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Common Medicare Beneficiary Mistakes

Medicare can be confusing, especially with its many rules and enrollment periods. Unfortunately, even small mistakes can lead to coverage gaps or lifetime penalties. Here are some of the most common Medicare beneficiary mistakes and missteps to avoid.

Missing Your Initial Enrollment Period

Your Initial Enrollment Period (IEP) is your first chance to enroll in Medicare. It starts three months before your 65th birthday, includes your birthday month, and ends three months after. Waiting too long to sign up can delay your coverage and lead to permanent late enrollment penalties — especially if you don’t have other creditable insurance.

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Assuming COBRA or Retiree Coverage Lets You Delay Medicare

If you have COBRA or retiree insurance, don’t assume it allows you to postpone Medicare. COBRA is not creditable coverage for delaying Part B or Part D. Failing to enroll when first eligible can leave you uninsured and subject to lifetime penalties once you do sign up.

Not Enrolling While Working for a Small Employer

If you’re still working and your company has 20 or fewer employees, Medicare becomes your primary insurance, not your employer plan. Failing to enroll in Medicare on time could mean denied claims and unexpected bills.

Ignoring the Need for a Part D Drug Plan

Even if you don’t take prescriptions, you should enroll in a Part D plan when first eligible. Without it, you’ll face a permanent late enrollment penalty once you do sign up, and you’ll have to wait until the next enrollment period for your coverage to start. Many beneficiaries choose an inexpensive plan simply to avoid future penalties.

Confusing Medigap Enrollment Rules

Unlike Medicare Advantage or Part D, Medigap doesn’t have an annual election period. Your one-time Medigap Open Enrollment Period begins when you enroll in Part B. During these six months, you can get a Medigap plan with no health questions — miss it, and medical underwriting could apply later.

Paying the Part B Deductible Too Soon

Some providers mistakenly request the Part B deductible before Medicare processes your claim. Always wait until Medicare applies the deductible to the correct bill to avoid confusion or overpayment.

Bottom Line

Understanding Medicare’s timelines and coverage rules can save you from penalties, gaps and unnecessary stress. Taking the time to review coverage options and asking your agent questions before you enroll helps you get the most out of your benefits.

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Social Security COLA 2026: What to Expect

Each year, Social Security adjusts benefits through a Cost-of-Living Adjustment (COLA) to help offset the impact of inflation. The COLA is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It compares inflation from July through September of one year to the same period in the previous year. The official announcement for the Social Security COLA 2026 is usually released in October 2025.

2026 COLA Projections

The Senior Citizens League and other analysts are projecting a 2.7% COLA for 2026. That’s a slight bump compared to 2025’s 2.5% increase and marks the fifth consecutive year with an adjustment above 2.5%.

For the average Social Security retirement benefit of about $2,007 per month, a 2.7% increase means an extra $54 per month, or roughly $648 per year. For someone receiving $1,500 monthly, the raise would be closer to $40 per month.

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Medicare Premiums Could Offset Gains

While a COLA increase is welcome, retirees must also consider rising healthcare costs. WE expect to see an 11.6% rise in Medicare Part B premiums in 2026, jumping from $185 in 2025 to around $206.50 per month.

That increase could significantly cut into the COLA. For many retirees, instead of seeing the full $54 monthly boost, the actual net gain may be closer to $30–$40, depending on their income level and Medicare plan choices.

Why It Matters

A 2.7% COLA may help, but it doesn’t always reflect the real inflation retirees face. Seniors often spend a larger share of their budget on housing, utilities, and especially healthcare; areas where costs are rising faster than the CPI-W measures.

Preparing for 2026

• Budget carefully. Plan for only a modest increase after Medicare deductions.
• Review Medicare options. Choosing the right plan can help you preserve more of your COLA.
• Consider supplemental income. Investments, part-time work, or savings can provide an additional buffer against rising costs.

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Bottom Line

The 2026 Social Security COLA will provide a modest increase, but higher Medicare premiums will likely reduce the real benefit retirees see in their checks. By planning ahead and managing healthcare costs, beneficiaries can make the most of the adjustment.

2026 Medicare IRMAA Amounts 2026: What Beneficiaries Should Expect

If beneficiary income is above certain thresholds, they’ll pay more for Medicare Part B and Part D through an IRMAA; the Income-Related Monthly Adjustment Amount. Because IRMAA is based on your tax return from two years earlier, 2024 income will determine what you owe in 2026. It is important to understand Medicare IRMAA amounts 2026 to budget for the year.

What Is IRMAA

IRMAA adds a surcharge to your Part B and Part D premiums if your Modified Adjusted Gross Income (MAGI) exceeds the set limits. For Part B, it’s usually withheld from Social Security; for Part D, it’s billed directly. If your income has recently dropped due to retirement, marriage, divorce, or another life-changing event, you can request a reconsideration using SSA Form 44.

Projected 2026 Costs

The standard Part B premium is projected to rise to $202.90/month in 2026, up from $185 in 2025. Even those who don’t pay IRMAA will see higher costs.

For higher-income beneficiaries, surcharges are added in brackets. Here are projected 2026 totals for Part B:

• Income of up to $109,000 (single) / $218,000 (married): pay $202.90 (the standard monthly rate)
• Income levels from $109k–$137k (single)/ $218k–$274k (married): pay $289 for Part B
• Those with income levels $137k–$171k (single)/ $274k–$342k (married): pay $413 for Part B
• Income levels of $171k–$205k (single) / $342k–$410k (married): pay $537
• Beneficiaries who make $205k–$500k (single) / $410k–$750k (married): will pay $661
• Those with income levels over $500k (single) / $750k (married): must pay $702

Part D IRMAA surcharges will also rise, from about $14.50/month in the first bracket up to $91/month for the highest incomes. CMS adds these amounts to the beneficiaries plan premium.

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What This Means for Beneficiaries

• Premiums are climbing, as they do most years. Even without IRMAA, 2026 Medicare costs are higher.
• IRMAA is a “cliff.” Going just $1 over a threshold bumps you into a higher bracket.
• Tax planning matters. Roth conversions, investment sales, and IRA withdrawals can all affect your MAGI.
• Life changes can help reduce an IRMAA. If income drops, beneficiaries may appeal to reduce or eliminate an IRMAA.

Planning Ahead

• Review 2024 tax returns to gauge your 2026 bracket.
• Be aware of income timing; shifting taxable money can prevent reaching income thresholds.
• Keep documentation ready if you need proof for a reconsideration.
• Stay updated on Medicare’s official income release in late 2025 for confirmation of final numbers.

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The projected 2026 IRMAA increases could mean significantly higher Medicare costs for high-income beneficiaries. By planning around your 2024 income now, beneficiaries may avoid unnecessary surcharges and keep more of their retirement income.

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Medicare and Dental Coverage: What You Need to Know

When people think of Medicare, they often assume it covers all their healthcare need; including dental. Unfortunately, that’s not the case. Original Medicare (Parts A and B) does not cover most routine dental care. This can come as a surprise to new Medicare beneficiaries, and as an agent, it’s important to help clients understand Medicare and dental coverage.

What Original Medicare Covers

Original Medicare only covers dental care in very limited situations; usually when it is part of a hospital stay or a medically necessary procedure. For example:

• Jaw reconstruction after an accident.
• Tooth extractions needed before certain surgeries, such as heart valve replacement.
• Oral exams done in the hospital before a covered procedure.

Routine services like cleanings, fillings, dentures, or root canals are not covered.

Why Dental Coverage Matters

Oral health is closely tied to overall health. Poor dental health can contribute to heart disease, diabetes complications, and infections; all of which are major concerns for Medicare-aged clients. Helping your clients plan for dental costs can protect both their health and their wallets.

Options for Dental Coverage

Here are the most common ways beneficiaries can get dental coverage:

1. Medicare Advantage Plans (Part C)
   Many Medicare Advantage plans include dental benefits. Coverage can range from basic preventive care (cleanings, x-rays) to more comprehensive services like crowns, root canals, and dentures. Make sure to compare networks, coverage limits, and annual maximums.
2. Stand-Alone Dental Insurance Plans
   These plans are separate from Medicare and can offer flexible options. Beneficiaries can choose plans based on coverage needs and budget.
3. Discount Dental Plans
   Not insurance, but these plans provide negotiated discounts with participating dentists. They can be a low-cost option for those who only need occasional care.
4. Paying Out-of-Pocket
   Some clients may choose to budget for routine care rather than purchase coverage. This may work for those with minimal dental needs, but it carries financial risk if major dental work is required.

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Tips for Agents

• Ask about oral health needs during your fact-finding process. This helps you recommend plans that fit your clients’ situation.
• Compare annual maximums carefully — dental coverage is often capped between $1,000–$2,000 per year.
• Educate clients about timing — enrolling in dental coverage early can help them avoid waiting periods for major services.

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Medicare beneficiaries need to know that Original Medicare will not take care of their routine dental needs. By helping them understand their options Medicare Advantage plans, stand-alone dental insurance, or discount plans; you position yourself as a trusted advisor and help them maintain both their oral and overall health.

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Medicare Advantage Unused Benefit Rules – What Agents Need to Know

Medicare Advantage (MA) plans can be a great choice for clients; especially because of their extra perks like dental, vision, hearing, OTC allowances, and fitness memberships. But these benefits often go unused, which can lead to client dissatisfaction and plan switching. Recently, CMS has put some Medicare Advantage unused benefit rules in place.

Here’s what you need to know to guide your clients.

Key Points About Unused Benefits

• Most benefits expire monthly, quarterly, or annually; no rollovers.
• OTC allowances are among the most commonly missed benefits.
• Dental/vision/hearing dollars disappear at year-end if not used.
• Provider networks matter — clients must follow plan rules or they risk missing out on some benefits.

CMS’ Mid-Year Notification Rule

CMS recently finalized a rule requiring MA plans to send personalized mid-year notices (June 30–July 31) showing members which supplemental benefits they haven’t used and how to access them.

However, enforcement is paused for 2026, so most plans will not send these reminders. Some may do so voluntarily, but agents should not assume clients will get them.

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Why This Matters for Agents

• Client Retention: Clients often switch plans because they feel they aren’t getting value; even when benefits were available.
• Education Opportunity: Helping clients understand and use their benefits builds trust and keeps them engaged.
• Competitive Edge: Agents who proactively remind clients about OTC orders, dental visits, and other benefits stand out.

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Agents

• Review each client’s benefits during mid-year check-ins.
• Send reminders about quarterly OTC allowances and annual dental/vision appointments.
• Explain provider network requirements to avoid frustration.
• Track CMS updates; when they enforce the rule, you can align your outreach with plan notices.

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Even with CMS’ rule delayed, agents can fill the gap by educating clients and helping them use the benefits they signed up for. Proactive communication strengthens client relationships, improves satisfaction, and keeps your book of business stable.

Medicare Coverage of DME (Durable Medical Equipment)

When it comes to staying healthy and independent, many Medicare beneficiaries rely on durable medical equipment (DME). Whether it’s a walker, a hospital bed, or a CPAP machine, understanding Medicare coverage of DME is essential for many.

In this post, we’ll break down what DME is, how Medicare covers it, and what clients should know to avoid costly surprises.

What Is Durable Medical Equipment (DME)

Durable Medical Equipment is defined as reusable medical equipment that is:

• Medically necessary for the patient’s health condition
• Able to withstand repeated use
• Primarily used for a medical purpose
• Appropriate for use in the home

Examples of common DME include:

• Wheelchairs and scooters
• Walkers and canes
• Hospital beds
• Oxygen equipment
• Blood sugar monitors and test strips
• CPAP machines and supplies

How Medicare Covers DME

Medicare Part B

Most DME is covered under Medicare Part B (Medical Insurance). Here’s how it works:

• Doctor’s Order Required: A physician or other Medicare-approved provider must prescribe the equipment.
• Approved Supplier: The equipment must be purchased or rented from a Medicare-approved supplier that accepts assignment.
• Cost-Sharing: The beneficiary pays 20% of the Medicare-approved amount after meeting the Part B deductible.

Those who have a Medicare Supplement plan may pay as little as $0 depending on the plan they have.

Some equipment is available for purchase, while other items are only available for rental. For rentals, Medicare usually pays the supplier monthly for up to 13 months, after which the beneficiary typically owns the equipment.

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Prior Authorization and Competitive Bidding

In some cases, Medicare requires prior authorization for certain high-cost or frequently abused items (like power wheelchairs). Additionally, in certain areas, Medicare runs a competitive bidding program for DME, meaning beneficiaries must use specific contracted suppliers to get full coverage.

Medicare Advantage and DME

Medicare Advantage (Part C) plans also cover DME, but:

• Networks and suppliers may be different from Original Medicare.
• Some plans require prior authorization for more types of equipment.
• Cost-sharing may vary (some plans may have lower copays or coinsurance).

Agents should always remind clients to check their plan’s provider directory and approval process before ordering DME.

Tips for Agents and Beneficiaries

• Verify Coverage First: Always confirm that the prescribing provider and supplier are Medicare-approved.
• Check the Need: Make sure there’s documentation showing the equipment is medically necessary.
• Understand Costs: Explain that clients will still owe 20% coinsurance under Part B unless they have Medigap or other supplemental coverage.
• Watch for Scams: DME fraud is common – warn clients not to accept unsolicited equipment or offers.

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Durable Medical Equipment can be life-changing for Medicare beneficiaries, but coverage rules can be tricky. By helping your clients understand what Medicare covers, where to get equipment, and how to keep costs low, you can build trust and ensure they get the care they need without unexpected bills.

2026 Medicare Part D Costs & Drug Price Negotiations

Medicare Part D (the prescription drug benefit) has seen some major changes recently. For 2026, several provisions are coming into play that affect what enrollees pay, how much Medicare pays, and how drug prices are negotiated. Below are the key updates to the 2026 Medicare Part D costs.

Key Changes in Medicare Part D for 2026

Here are some of the most important cost‐related changes that beneficiaries should know:

What Is the Drug Price Negotiation Program

Under the Inflation Reduction Act of 2022, Medicare now has the power to directly negotiate prices for certain high-cost drugs covered under Part D (and later also Part B). Previously, Medicare was more restricted in its ability to force manufacturers to lower prices for prescription drugs.

Here’s how the negotiation program works in broad strokes:

• Each year, a certain number of “single-source” brand drugs (i.e. those without generics or biosimilars) that have been on the market for a set minimum time become eligible for negotiation.
• Medicare (through CMS) makes an initial offer (“maximum fair price” or MFP) based on drug spending, clinical benefit, manufacturer costs, price in comparable drugs, etc. Manufacturers can counter. There are meetings and data sharing to arrive at a negotiated price.
• If agreement is reached, the negotiated price becomes effective as of a certain date. For the first set of drugs, prices begin for 2026

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Which Drugs & Savings with Negotiation in 2026

• The first round of negotiation selects 10 Part D drugs.
• For 2026, these negotiated prices go into effect starting January 1, 2026.
• The discounts negotiated are substantial: for those 10 drugs, reductions range from 38% to 79% off list price.
• Estimated savings: If those new prices had been in effect earlier (e.g. in 2023), Medicare would have saved about $6 billion in overall drug spending on those drugs. For beneficiaries, out-of-pocket savings for those 10 drugs in 2026 are projected to be about $1.5 billion.

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How Negotiations & Costs Interact: What This Means for Beneficiaries

• Lower list/transaction prices for selected drugs should directly reduce what beneficiaries pay (especially in the initial and gap phases), because coinsurance or cost sharing is often a percentage of drug cost.
• The out-of-pocket cap ($2,100 in 2026) limits how high total costs for drugs can go in a year, making unexpected high drug bills somewhat more predictable.
• The negotiation program may also influence which drugs are placed on formularies or on preferred tiers, as plans respond to the new negotiated prices.
• However, the savings from negotiated drugs apply only to those drugs selected for negotiation; many other drugs will still be under traditional pricing structures.

Some Caveats & Things to Watch

• The negotiated max fair price is not always simply a percentage cut—there are statutory minimum discounts, comparisons with existing net prices, evaluation of alternatives, etc. Some drugs may see smaller reductions depending on existing rebates or other discounts.
• The program phases in over years: more drugs will be subject to negotiation in 2027, 2028, etc. So the full effects take time.
• Courts and industry challenges may affect implementation or enforcement.

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For 2026, people with Medicare should expect higher costs including; premiums, deductibles and out‐of‐pocket thresholds compared to previous years. Although there will be relief for certain high‐cost drugs thanks to the new Medicare drug price negotiation program. If you’re taking one of the drugs selected for negotiation, the discounts will reduce what you pay. Over time, broader negotiation and other reforms aim to make more drugs more affordable for all Part D enrollees.