Medicare Changes Starting In 2026

Understanding how Medicare changes every year can help you determine whether Original Medicare or a specific Medicare Advantage plan is right for you. Medical costs are increasing each year, and several factors contribute to this trend. As Medicare’s open enrollment period approaches, here are some important changes to be aware of.

Prescription Payment Plan updates

The Medicare Prescription Payment Plan (MPPP) was introduced in 2025. This gives people with Medicare drug coverage the option to spread their prescription costs out over the year instead of paying the full amount upfront at the pharmacy.

If you participate in the MPPP, starting in 2026, you will be automatically re-enrolled each year unless you choose to opt out. A renewal notice will be sent out after the end of the annual election period, outlining the plan’s terms and conditions for the upcoming year.

If you decide to opt out, plan sponsors will have three calendar days to process the opt-out requests, rather than the originally proposed 24-hour timeframe. This increase is aimed at reducing the administrative burden.

Cap on Part D prescription drug expenses indexed for inflation

For 2026, the cap on out-of-pocket prescription drug costs will rise to $2,100, up from $2,000 in 2025. In other words, you could pay up to $100 more in prescription costs next year before reaching your annual limit.

Medicare Part D deductible is going up

You always hear more about Medicare Part A and Part B deductibles. For 2025, Part A is $1,676 and Part B is $257. These amounts are more set in stone and apply to everyone on Medicare. Unlike Part D, your deductible depends on the specific prescription drug plan you chose.  Medicare sets a maximum limit that no plan can exceed.

If your Part D plan has a deductible, you’ll pay 100% of your covered prescription costs until that deductible is met. For 2026, the maximum deductible will increase to $615, up $25 from the $590 limit in 2025.

Once you’ve met your plan’s deductible, you’ll normally pay 25% coinsurance on both generic and brand-name drugs. This continues until your total out-of-pocket spending on covered Part D drugs reaches $2,100 in 2026.

Limits on supplemental benefits for the Chronically Ill (SSBCI) on Medicare Advantage

Medicare Advantage (MA) plans offer additional benefits beyond the standard Medicare coverage. Some MA plans tailor the special benefits based on the enrollee’s medical condition.

Recently, CMS has clarified rules around what cannot be offered as Part of the Special Supplemental Benefits for the Chronically Ill (SSBCI). In the final ruling, CMS included a list of items and services that are not considered primarily health-related. Meaning they don’t improve or maintain an enrollee’s health or overall function.

Here are a few examples of items and services that may not be offered as SSBCI include:

• Alcohol
• Tobacco
• Non-healthy foods
• Life insurance
• Hospital indemnity insurance
• Funeral planning and expenses

Insulin costs capped

Insulin costs have been capped at $35 per month or less for Medicare beneficiaries since 2023. Starting in 2026, this $35 limit will apply on an annual basis rather than monthly. Additionally, no deductible should apply to insulin purchases.

Beginning in 2026 and for each year after, your cost-sharing amount for insulin will be the lesser of the following:

• $35
• 25% of the maximum fair price set under the Medicare Drug Price Negotiation Program
• 25% of the negotiated price under your stand-alone Medicare prescription drug plan (PDP) or Medicare Advantage plan with drug coverage (MA-PD plan)

Zero cost sharing for adult vaccines

Since 2023, Medicare beneficiaries have been eligible for certain free vaccines. This benefit is now a permanent feature of Medicare Part D coverage. Under this rule, Part D insurers must continue to waive deductibles and cost-sharing for all adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP).

Keep in mind, the list of covered vaccines is reviewed and updated each year. So a vaccine that’s free this year may not remain on the list next year.

Each year, Medicare beneficiaries have a chance to review and make changes to their coverage. You can join, switch, or drop a Medicare Advantage plan or Part D drug plan, move to Original Medicare, or keep your current coverage. If you’re satisfied with your plan after reviewing your options, there’s nothing you need to do. Medicare costs, benefits, and provider networks can change annually, and comparing your options could help you find better coverage or even save money.