Last Updated on April 9, 2025
On Monday, the Centers for Medicare & Medicaid Services (CMS) announced changes coming to Medicare in 2026.
These updates affect both Medicare Advantage and Part D prescription drug plans. They could change what you pay out of pocket, what benefits your plan offers, and how Medicare scores plan quality.
Whether you have a Medicare Advantage plan, a Part D drug plan, or both, it’s important to stay informed. Knowing what’s changing will help you make smart choices during Open Enrollment.
In this article, we’ll explain the key changes and how they may affect your coverage and costs.
What Is Changing in Medicare Part D for 2026?
Several important updates are coming to your Medicare drug coverage in 2026. Here’s what to expect:
- Standard deductible is increasing. The annual deductible for Part D plans will rise from $590 in 2025 to $615 in 2026. This is the amount you must pay before your plan begins covering your prescriptions.
- Out-of-pocket spending cap is going up slightly. In 2026, you’ll pay up to $2,100 out-of-pocket for covered drugs before your costs drop to $0. That’s up from $2,000 in 2025. After you hit this cap, your cost-sharing for covered drugs will significantly decrease
- If you qualify for the Low-Income Subsidy (LIS), your drug copays will also change. You’ll pay up to $5.10 for generic or preferred multi-source drugs and $12.65 for other drugs. These amounts apply until you reach the out-of-pocket limit. To qualify, your income must be at or below 150% of the federal poverty level and meet certain resource limits.
These updates help protect people who take expensive or ongoing medications, making costs more predictable and manageable. But Part D is just one piece of the puzzle. Changes to Medicare Advantage plans could also affect your overall coverage in 2026.
Medicare Advantage Plans in 2026: What to Expect
Medicare is making several changes that could impact your Medicare Advantage (MA) plan next year:
- MA payments are increasing. While this doesn’t directly affect your costs, it could help stabilize or enhance plan benefits and provider networks.
- CMS will fully implement a new risk adjustment model (CMS-HCC). Most MA plans (excluding PACE) will begin using this model in 2026. It changes how Medicare pays each plan based on your health conditions. Insurers may respond by adjusting coverage, changing plan availability, or updating pricing.
- FIDE SNP plans will use updated frailty scoring. For those in Fully Integrated Dual Eligible Special Needs Plans, frailty scoring will now use the 2024 risk model.
- If you have End-Stage Renal Disease (ESRD), your plan will adjust for a $6 monthly network withhold. Medicare introduced this policy to offset certain costs. Your plan may respond by reevaluating its provider network or adjusting how it delivers ESRD-related services.
These changes could affect your plan’s benefits. They might also change which doctors and hospitals stay in your network, or whether the plan stays available in your area at all. Since CMS updates plan ratings every year, changes in how Medicare scores plans may also shape the options you see. They could even influence the value you get during Open Enrollment.
What’s New in Medicare Star Ratings for 2026?
Medicare uses Star Ratings to help you compare the quality and performance of Medicare Advantage and Part D plans. In 2026, CMS will update how it scores plans in several key ways:
- CMS will add a new kidney health measure. The Star Ratings system will now include a measure for Kidney Health Evaluation in people with diabetes.
- CMS will bring back key health maintenance measures. The ratings for Improving or Maintaining Physical Health and Improving or Maintaining Mental Health will return, using updated scoring criteria.
- CMS will reduce the weight of patient experience measures. Ratings based on member experience, complaints, and access to care will carry less influence in a plan’s overall score.
These scoring updates may shift how plans rank–and whether they earn bonus payments. In turn, insurers may respond by changing benefits or focusing on different priorities. This can affect your coverage quality and plan options during Open Enrollment.
What’s Changing in Retiree Drug Subsidy Plans
If you receive drug coverage through a former employer, your plan likely participates in the Retiree Drug Subsidy (RDS) program. Medicare updates this subsidy program every year, and here’s what’s changing in 2026:
- The cost threshold will rise to $615, up from $590 in 2025.
- The cost limit will increase to $12,650, up from $12,150 in 2025.
Medicare bases these updates on the Annual Percentage Increase (API). For 2026, the API is 4.27%, which reflects a 5.69% drug spending trend for 2025 and updated prior-year data. Medicare rounds the threshold to the nearest $5 and the limit to the nearest $50.
The Inflation Reduction Act (IRA) made big changes to Part D, but it didn’t change how the RDS program works. The subsidy rules continue to follow the original statutory formula.
These figures play a big role in keeping employer-sponsored retiree plans funded and available. As retiree plans evolve, reviewing your coverage options with professional guidance becomes even more important.
How To Prepare For Medicare Changes Next Year
At NeedyMeds, we always encourage people to shop around for Medicare plans if their current one is giving them trouble. The State Health Insurance Assistance Program (SHIP) offers free, one-on-one help to people with Medicare.
They can help you understand what’s changing and compare plans during Open Enrollment. They can also make sure you’re choosing coverage that fits your health and budget. Whether you want to stay with your current plan or explore new options, SHIP can help you.
You can find your local SHIP office at shiphelp.org, or contact NeedyMeds for additional support and Medicare resources.
Final Thoughts
Medicare will bring important changes in 2026–especially for prescription drug coverage and Medicare Advantage plans. Some of these updates may shift what you pay or which plans are available in your area. Others may influence the benefits your plan offers or how it’s rated.
Understanding these changes now can help you feel more prepared when it’s time to make decisions during Open Enrollment. Whether you’re comparing plans, reviewing costs, or just trying to understand how these updates affect you, you don’t have to do it alone.
NeedyMeds is here to help. We offer free information and resources to guide you through the Medicare landscape. Find resources on our website or call us at 800-503-6897.
