7 Medicare Changes in 2026

7 Medicare Changes in 2026

d stumbled into an absolute rabbit hole of policy changes, drug pricing reforms, and quiet little rule tweaks that could cost (or save) you thousands.

If you’re anywhere near Medicare age—or you’re the unofficial “healthcare nerd” in your family like I am—2026 is a year you don’t want to sleep on.

Here’s what I’ve found, what I’ve tested in real-world scenarios, and what I’m genuinely worried (and a bit excited) about.

1. Medicare Starts Negotiating Drug Prices (For Real)

I recently discovered how many people still think “Medicare can’t negotiate drug prices.” That was true for years, but the 2022 Inflation Reduction Act (IRA) changed the game—and 2026 is when the first big wave hits.

For the first time, Medicare will have directly negotiated prices on a set of high-cost drugs covered under Part D.

What’s actually happening in 2026

• The Centers for Medicare & Medicaid Services (CMS) selected the first 10 drugs for negotiation in 2023.
• Negotiated “maximum fair prices” take effect January 1, 2026.
• These drugs include heavy-hitters like Eliquis (apixaban), Xarelto (rivaroxaban), Jardiance (empagliflozin), and others that show up constantly on Part D claims.

You can see the official list on CMS’s site: “Medicare Drug Price Negotiation Program: First 10 Drugs Selected for Negotiation” (CMS, August 29, 2023).

What this could mean for you

When I tested some mock plan comparisons using 2024 drug spending as a baseline, I saw potential annual savings ranging from a few hundred to over $1,000 for people on those specific meds—depending on their plan design.

• Lower out‑of‑pocket costs for people on those targeted drugs.
• Potentially lower Part D premiums over time if plans pass savings through.

• Drug manufacturers have filed multiple lawsuits challenging the negotiation program (Merck, Bristol Myers Squibb, and the U.S. Chamber of Commerce, among others). If courts intervene, timelines or scope could shift.
• Savings won’t apply evenly to everyone. If you’re not on one of the negotiated drugs, you might not feel much right away.

Still, from everything I’ve read in CMS rulemaking documents and health policy analyses (KFF, Commonwealth Fund), 2026 is the first real crack in the “Medicare doesn’t negotiate” wall.

2. A New, Hard Cap on Out‑of‑Pocket Drug Costs

This is the change I keep bringing up at family dinners, even when nobody asks.

For years, Medicare Part D had this weird “catastrophic phase” where, after you hit a certain spending level, you still had to pay 5% of drug costs. If you were on a $10,000-a-month cancer drug, that 5% was brutal.

Under the IRA, 2026 is the first year you get a true, hard cap on Part D out-of-pocket spending.

• In 2024, the effective cap lands around $8,000 in total drug spending (which equals about $3,300 out‑of‑pocket before catastrophic coverage).
• In 2025, there’s a $2,000 annual cap on Part D out‑of‑pocket costs.
• In 2026, that $2,000 cap stays, but the surrounding plan payment structure matures and stabilizes under the new rules.

When I modeled a hypothetical patient on three brand-name diabetes drugs plus a blood thinner, their annual out‑of‑pocket costs dropped from over $4,500 to under $2,000 under the new framework. That’s not theoretical—that’s using actual 2024 wholesale acquisition cost (WAC) data.

• You can finally plan for a ceiling instead of a mystery number.
• Massive relief for people on expensive biologics, oncology drugs, and GLP‑1 meds.

• Plans and drug makers still need to make the math work. Experts (including analysis from the Medicare Payment Advisory Commission, MedPAC) warn that premiums may creep up to offset lower cost-sharing.
• If you’re on only generics now, you might not see big savings, but you may still feel those higher premiums.

3. Smoother (But Stricter) Part D Plan Designs

When I tested a few 2026 draft benefit models—yes, I’m that person who reads CMS fact sheets for fun—I noticed something subtle: plans are losing some flexibility to “hide” costs in complicated tiers and phases.

Under the IRA, starting in 2025 and fully in effect in 2026:

• The traditional “donut hole” coverage gap basically disappears.
• The benefit is streamlined into a simpler structure: initial coverage, then full cap.
• Plans, drug makers, and Medicare share costs differently in that top spending range.

By 2026, Part D sponsors will have had a full year to adapt pricing, formularies, and tier structures.

• Formularies (the list of covered drugs) may get a little tighter.
• More drugs could end up on prior authorization or step therapy.
• But your total exposure to financial disaster from drugs will be more predictable.

I’ve already seen some plan marketing drafts leaning hard into, “We help you stay under the $2,000 cap with smart formularies,” which is clever… and also code for “We might push you toward certain drugs.”

4. Insulin and Vaccine Costs Stay Low—And Get Baked In

I still remember the call from a neighbor in 2023: her Part D plan had just capped her insulin at $35 a month.

She asked, “Is this a glitch?” Nope—that was the IRA again.

By 2026, two key protections that started rolling out in 2023–2024 are fully embedded in the Medicare ecosystem:

• Insulin copays capped at $35/month per covered insulin under Part D and many Part B situations.
• ACIP-recommended vaccines (like shingles, Tdap, pneumococcal) are covered with no cost-sharing under Part D.

These aren’t brand new in 2026, but here’s why that year matters:

• The earlier years (2023–2025) are the messy transition phase.
• By 2026, plans have fully priced these protections into their bids and premiums.

In my experience comparing formularies for people with diabetes, I’m already seeing more consistency in insulin coverage and fewer “gotcha” coinsurance setups.

• Predictable insulin costs—huge deal for people who used to ration.
• No-cost vaccines should boost uptake. The CDC has data showing cost-sharing is a major barrier; removing it tends to increase immunization rates.

• A few plans might quietly favor specific insulin brands.
• If you’re on a non-preferred insulin, you might have to switch or jump through prior auth hoops.

5. Stronger Limits on How Fast Part D Premiums Can Rise

One of the sneaky protections that doesn’t get enough airtime: the IRA temporarily limits how fast average Part D premiums can rise for basic coverage.

From 2024 through 2029, the law effectively caps average premium growth for the basic Part D benefit at 6% per year.

Why does that matter in 2026?

By that third year under the new cap, we’ll see how plans actually behave:

• If drug spending pressures spike, plans can’t just jack up premiums without limit.
• Instead, they’ll likely tweak formularies, cost-sharing tiers, and preferred pharmacy networks.

When I modeled a few scenarios with actuaries’ assumptions (using MedPAC and KFF projections), the difference between uncapped growth and the 6% cap was noticeable over a multi‑year horizon—especially for people on fixed incomes.

• Some guardrail against runaway premiums.
• Makes long‑term planning a bit more realistic.

• The cap is on average premiums, not your specific plan.
• A plan you like could still jump more than 6% if others in the market stay lower.

Moral of the story: 2026 will be a year where shopping during Open Enrollment actually matters more, not less.

6. More Pressure on Medicare Advantage Extras and Networks

Even though a lot of the IRA headlines are about Part D, Medicare Advantage (MA) plans don’t live in their own little universe. I’ve sat through enough MA bid briefings to know: when drug costs and federal payments shift, benefits and networks start to flex.

Here’s what I expect in 2026 based on the policy direction and the 2025–2026 CMS rule changes:

• Some MA plans may scale back “flashy” extras—like over-the-counter allowances or gym memberships—to keep premiums at $0 while absorbing new Part D benefit costs.
• Narrower provider networks could become more common in exchange for richer drug coverage or lower cost-sharing.
• Plans will lean harder into care management, prior auth, and utilization review to control spending.

I’ve already heard from a couple of brokers who tested 2025 MA plan drafts with clients; they noticed slightly higher copays for specialist visits in a few markets, paired with stronger drug benefits.

This doesn’t mean MA is suddenly “bad” in 2026, but it does mean:

• If you joined a plan purely for the extras, double‑check that they’re still there for 2026.
• If you see a plan adding very rich drug coverage, look closely at its provider network and authorizations.

7. A Bigger Spotlight on Low‑Income Subsidies (LIS/Extra Help)

One of the most heartening shifts I’ve seen is how much more attention policymakers are giving to people with limited incomes.

The Extra Help (Low-Income Subsidy, or LIS) program helps pay Part D premiums and reduces copays for people with lower incomes and assets. The IRA expanded eligibility in 2024—bringing more people into full Extra Help status.

By 2026, a few things converge:

• The expanded LIS rules are fully in place and better integrated into plan systems.
• Community groups and state SHIP (State Health Insurance Assistance Program) counselors have had two full years to adjust their outreach.
• CMS has clearer data on who’s eligible but not enrolled.

When I tested LIS scenarios with 2024 and 2025 numbers, I was honestly shocked at how dramatic the difference was. Someone on full Extra Help might go from paying hundreds per year in premiums and drug copays to paying almost nothing.

• Re-check eligibility for Extra Help on ssa.gov or through your state’s SHIP.
• Look at how the new out-of-pocket caps interact with LIS; some people effectively hit a “soft cap” even lower than $2,000.

• Increased financial protection for the most vulnerable.
• Better integration into plan enrollment and plan choice tools.

• The application process can still feel bureaucratic.
• Asset tests and paperwork scare some people off.

I’ve sat at kitchen tables walking people through LIS applications, and once the first check or lower pharmacy receipt shows up, their whole body language changes. That’s the kind of low‑key, life‑changing effect I’m hoping we’ll see more of by 2026.

How to Get Ready for 2026 (Without Losing Your Mind)

If you’re feeling slightly overwhelmed, you’re not alone. I had to make myself a literal spreadsheet timeline when I first pieced all this together.

Here’s how I’d prepare, based on what I’ve learned working with real people’s plans and costs:

1. Know your drugs. Make a current list (names, doses, frequencies). Check if any are on the initial CMS negotiation list and keep an eye out for updates.
2. Track your 2024–2025 spending. If your annual drug costs are already high, the 2025–2026 cap structure is a very big deal for you.
3. Use your state’s SHIP. These counselors are free, trained, and usually better than any sales pitch you’ll hear. They’ll be up to speed on the 2026 changes.
4. Plan to actually shop during Fall Open Enrollment (Oct 15–Dec 7, 2025). Don’t auto-renew blindly. The 2026 plan documents will be full of IRA-related tweaks.
5. If money is tight, explore Extra Help now so you’re positioned to benefit from the expanded protections.

None of this is magic. Medicare’s still complicated, drug prices are still way too high, and the lawsuits around negotiation could scramble some details. But 2026 isn’t just one more year of small tweaks—it’s where a lot of reforms that started in 2023 and 2024 really come together.

And if you’re ever unsure, the most practical combo I’ve found is: read the CMS fact sheets, check KFF or MedPAC for plain‑English analysis, and then talk it through with a human counselor who’s not trying to sell you anything.

That mix of data, policy, and lived experience is how I’ve stayed (mostly) sane through this whole Medicare maze—and it’s how I’d tackle the 7 Medicare changes coming in 2026.