Medicare costs: 3 key changes in 2026
Medicare beneficiaries should compare plans during the current open enrollment period, according to health experts. They point out that some monthly insurance rates might go up a little while others might go down a little. They also mention the possibility of changes to out-of-pocket costs, deductibles, and coverage for medical services. During the current open enrollment period, experts advise Medicare beneficiaries to thoroughly consider their options for the upcoming year.
Here are 3 key changes to Medicare costs expected in 2026:
1. The $2,000 Out-of-Pocket Cap on Part D Prescription Drugs
This is the most significant change and a historic first for the Medicare program.
- What’s Changing: For the first time, there will be a hard cap on how much someone on a Medicare Part D prescription drug plan has to pay out-of-pocket for their medications in a single year.
- The Specifics: In 2026, this cap will be set at $2,000. Once a beneficiary’s total drug spending (including what they and their plan have paid) reaches this amount, they will pay $0 for their covered Part D drugs for the rest of the year.
- Why It’s a Big Deal: This protects beneficiaries, especially those with chronic conditions like cancer, multiple sclerosis, or rheumatoid arthritis, who rely on extremely expensive specialty drugs. Previously, there was no cap, meaning seniors could face thousands of dollars in ongoing costs, creating significant financial strain.
2. Smoothing of Out-of-Pocket Costs in Part D
This change works hand-in-hand with the $2,000 cap to make costs more manageable throughout the year.
- What’s Changing: Medicare beneficiaries will have the option to spread their out-of-pocket drug costs over the entire year instead of facing large, lump-sum payments.
- The Specifics: This is often called the “Part D smoothing” or “monthly cap” provision. Beneficiaries can choose to pay their estimated out-of-pocket costs in equal monthly payments, making it easier to budget and avoid a major financial hit in a single month.
- Why It’s a Big Deal: It provides predictability and financial flexibility. A senior who hits the catastrophic coverage phase early in the year won’t have to come up with a large amount of money all at once to pay for a single prescription.
3. The Start of Medicare Drug Price Negotiation
While the direct price effects will take time to fully materialize, 2026 marks a critical milestone in this process.
- What’s Changing: For the first time, the federal government will directly negotiate prices with drug manufacturers for a select number of high-cost, single-source drugs that lack competition.
- The Specifics: The first round of negotiated prices will go into effect in 2026. The drugs subject to negotiation were selected from Medicare’s highest-spending drugs that have been on the market for several years without generic or biosimilar competition.
- Why It’s a Big Deal: This is a fundamental shift in how drug prices are set in Medicare. The goal is to lower costs not just for individual beneficiaries (through lower copays/coinsurance) but for the entire Medicare program, which can help slow the growth of premiums and federal spending over time. The drugs selected for this first round are likely to be major cost drivers for many beneficiaries.
Summary Table
| Key Change | What It Means for You in 2026 |
|---|---|
| $2,000 Part D Cap | Your maximum yearly out-of-pocket cost for prescription drugs is capped at $2,000. After that, you pay $0. |
| Cost Smoothing | You can choose to pay your out-of-pocket drug costs in predictable monthly installments instead of large, sporadic payments. |
| Drug Price Negotiation | The first set of government-negotiated lower drug prices takes effect, which should lower costs for specific, high-spend medications. |
Important Note: Medicare rules and plans can change every year. It is always recommended to review your coverage during the Annual Election Period (October 15 – December 7) to ensure your plan still meets your needs and takes advantage of these new consumer protections.
Reference:
https://www.dignityhealth.org/articles/7-ways-to-lower-your-a1c-level-even-if-you-dont-have-diabetes
https://www.webmd.com/diabetes/tips-to-lower-a1c
https://www.medicalnewstoday.com/articles/317216
https://www.mayoclinic.org/diseases-conditions/diabetes/in-depth/diabetes-management/art-20047963
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