Medicare 2026 update: What to know about premiums, benefits, and plan choices
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Every year, millions of Americans with Medicare wait to hear whether costs will rise or fall.
With prices on everyday necessities climbing, many feared another financial squeeze.
But for 2026, Medicare Advantage (MA) and Part D prescription drug premiums are set to decrease instead of going up.
Enrollees will still see broad access to plans and steady benefits despite the slight dip in plan numbers.
In a world where it seems like everything from eggs to electricity is getting pricier, Medicare is bucking the trend.
According to the Centers for Medicare and Medicaid Services (CMS), the average monthly premium for Medicare Advantage plans will decrease from $16.40 in 2025 to just $14 in 2026.
Standalone Part D prescription drug plans are also seeing a dip, with average premiums expected to fall from $38.31 to $34.50.
If you have Part D coverage bundled with your MA plan, your average premium could be as low as $11.50.
Why the drop? Unlike commercial insurance, where prices are negotiated with powerful hospital systems and providers, Medicare’s rates are set by the government.
This keeps costs more predictable and, in recent years, relatively flat. Plus, MA plans are heavily subsidized, which helps keep premiums low for enrollees.
And with prescription drug costs continuing to climb, the stability of Part D plans is a lifeline for many.
But don’t let the good news lull you into complacency. Medicare plans can change their drug formularies, provider networks, and out-of-pocket costs every year.
That’s why it’s crucial to review your coverage during Open Enrollment (October 15–December 7, 2025) and make sure your plan still fits your needs.
He also cautions that switching from Medicare Advantage back to Original Medicare can be costly if you have chronic conditions, due to how Medigap plans are priced.
Jonathan Gruber, an MIT economist, points out that while MA plans offer extra benefits, not everyone finds them valuable enough to justify the higher payments Medicare makes to these plans.
Mark Pauly from Wharton notes that the recent growth in MA enrollment has helped lower administrative costs, but it remains to be seen if these plans can continue to keep outpatient costs in check.
Also read: CVS expands program to help Medicare members avoid costly hospital readmissions
Also read: Medicare bill could protect home health care access for millions
While MA and Part D premiums are dropping, keep in mind that Medicare Part B premiums (which cover doctor visits and outpatient care) have been rising.
Not all plans are created equal, and what works for your neighbor may not be the best fit for you.
Be especially careful if you’re considering switching between MA and Original Medicare, as your ability to buy supplemental Medigap coverage may be limited or more expensive if you have pre-existing conditions.
Open Enrollment for 2026 runs from October 15 to December 7, 2025. Mark your calendar, gather your paperwork, and set aside some time to review your options. A little effort now can save you money and headaches in the year ahead.
Read next:
Have you found a Medicare plan you love—or one you wish you’d avoided? Are you confused by all the choices, or do you have tips for fellow readers?
With prices on everyday necessities climbing, many feared another financial squeeze.
But for 2026, Medicare Advantage (MA) and Part D prescription drug premiums are set to decrease instead of going up.
Enrollees will still see broad access to plans and steady benefits despite the slight dip in plan numbers.
In a world where it seems like everything from eggs to electricity is getting pricier, Medicare is bucking the trend.
According to the Centers for Medicare and Medicaid Services (CMS), the average monthly premium for Medicare Advantage plans will decrease from $16.40 in 2025 to just $14 in 2026.
Standalone Part D prescription drug plans are also seeing a dip, with average premiums expected to fall from $38.31 to $34.50.
If you have Part D coverage bundled with your MA plan, your average premium could be as low as $11.50.
Why the drop? Unlike commercial insurance, where prices are negotiated with powerful hospital systems and providers, Medicare’s rates are set by the government.
This keeps costs more predictable and, in recent years, relatively flat. Plus, MA plans are heavily subsidized, which helps keep premiums low for enrollees.
What’s Staying the Same (and What’s Not)
- Plan Access: Over 99% of Medicare beneficiaries will have access to at least one MA plan, and 97% will have 10 or more options to choose from. So, you’re not short on choices!
- Plan Numbers: The total number of MA plans will dip slightly—from 5,633 in 2025 to about 5,600 in 2026—but that’s still a dizzying array of options.
- Enrollment Trends: While CMS projects a small drop in MA enrollment (from 34.9 million to 34 million), past trends suggest participation may remain strong or even grow.
- Out-of-Pocket Maximums: The annual out-of-pocket cap for Part D will rise to $2,100 (up from $2,000 in 2025). This is worth noting if you have high prescription drug costs.
And with prescription drug costs continuing to climb, the stability of Part D plans is a lifeline for many.
But don’t let the good news lull you into complacency. Medicare plans can change their drug formularies, provider networks, and out-of-pocket costs every year.
That’s why it’s crucial to review your coverage during Open Enrollment (October 15–December 7, 2025) and make sure your plan still fits your needs.
Expert Advice: Shop Around and Stay Informed
Healthcare policy experts agree: the best thing you can do is comparison shop. Dr. J. Michael McWilliams of Harvard Medical School warns that the complexity of Medicare can lead people to stick with the same plan year after year—even when better options are available.He also cautions that switching from Medicare Advantage back to Original Medicare can be costly if you have chronic conditions, due to how Medigap plans are priced.
Jonathan Gruber, an MIT economist, points out that while MA plans offer extra benefits, not everyone finds them valuable enough to justify the higher payments Medicare makes to these plans.
Mark Pauly from Wharton notes that the recent growth in MA enrollment has helped lower administrative costs, but it remains to be seen if these plans can continue to keep outpatient costs in check.
Also read: CVS expands program to help Medicare members avoid costly hospital readmissions
How to Make the Most of Open Enrollment
- Use the Medicare Plan Finder: Medicare.gov’s Plan Finder tool is your best friend. It lets you compare plans side by side, factoring in your medications, preferred doctors, and pharmacies.
- Check for Changes: Even if you love your current plan, check for changes in premiums, drug coverage, and provider networks.
- Ask for Help: Medicare is complicated! Don’t hesitate to reach out to your State Health Insurance Assistance Program (SHIP) or a trusted insurance broker for free, unbiased advice.
- Explore Savings Programs: If you have a limited income, you may qualify for Medicare Savings Programs that help pay premiums and other costs.
Also read: Medicare bill could protect home health care access for millions
While MA and Part D premiums are dropping, keep in mind that Medicare Part B premiums (which cover doctor visits and outpatient care) have been rising.
Not all plans are created equal, and what works for your neighbor may not be the best fit for you.
Be especially careful if you’re considering switching between MA and Original Medicare, as your ability to buy supplemental Medigap coverage may be limited or more expensive if you have pre-existing conditions.
Open Enrollment for 2026 runs from October 15 to December 7, 2025. Mark your calendar, gather your paperwork, and set aside some time to review your options. A little effort now can save you money and headaches in the year ahead.
Read next:
- Missing these Medicare deadlines could drain your wallet—here’s how to stay on track
- Medicare covers 10 surprising services for free—are you missing out?
