How is Medicare Part D Changing in 2026?

The Centers for Medicare & Medicaid Services (CMS) recently announced important updates for Medicare beneficiaries. These updates include a projected decrease in the average monthly premium for Medicare Part D plans in 2026 and significant changes to the catastrophic coverage drug phase.

These developments will help provide beneficiaries with lower out-of-pocket costs and improved coverage options. Below, we discuss the details of these changes and their potential impact on you, the beneficiary.

Medicare Part D Premiums in 2026

The 2026 base beneficiary premium for Medicare Part D is $38.99 per month, a modest increase from $36.78 in 2025. The Inflation Reduction Act caps annual premium growth at 6% through 2029, providing stability for the millions of Medicare beneficiaries who rely on Part D for prescription drug coverage each year.

This premium stability can be directly attributed to improvements made to the Part D program through the Inflation Reduction Act, including drug price negotiations, accountability measures for drug manufacturers, and overall reduced costs for Medicare beneficiaries. These improvements help ensure the Medicare Part D program remains accessible and affordable for all beneficiaries.

How Does CMS Determine the Average Projected Premium for Part D?

CMS's decision to release the projected average Medicare Part D premium is an act of transparency from the federal healthcare program. This average premium is calculated based on plan bids submitted to CMS by Medicare Part D plan carriers and serves as a valuable tool for individuals to comprehend overall premium trends.

This transparency empowers beneficiaries to make informed decisions during the upcoming Annual Enrollment Period, where they can choose from a variety of plan options available in their area for the following calendar year.

Choosing the right Medicare Part D plan for your healthcare needs is just as important as choosing the right plan for your budget. Having these numbers available to you ahead of time allows you to better understand how a plans monthly premium fairs, among others.

Changes to Medicare Part D Insulin Coverage in 2026

Insulin is a necessary drug for millions of Americans, and extremely high costs deter enrollees from receiving their necessary prescription each month. In January, Medicare Part D plans are no longer able to apply the Medicare Part D deductible to any insulin product listed on the plan's formulary or any vaccine recommended by the Advisory Committee on Immunization Practices.

Further, a Medicare Part D plan may not charge more than $35 for a month's supply of insulin in the initial coverage phase or coverage gap phase. This cost decrease is a huge win for those previously unable to afford their prescription and makes receiving life-saving medication accessible for a wider range of Medicare enrollees.

The $2,100 Annual Out-of-Pocket Cap

One of the most significant changes to Medicare Part D is the annual out-of-pocket spending cap, introduced by the Inflation Reduction Act. In 2026, no Medicare Part D enrollee will pay more than $2,100 out of pocket for covered prescription drugs in a calendar year. This is a slight increase from the $2,000 cap that took effect in 2025.

Once you reach the $2,100 threshold, your plan covers 100% of your remaining drug costs for the rest of the year. There is no longer a catastrophic coverage phase where beneficiaries still owed coinsurance. This cap applies regardless of how expensive your medications are.

For beneficiaries who take high-cost specialty medications, this cap represents substantial savings of potentially thousands of dollars per year. Additionally, Medicare now offers a Medicare Prescription Payment Plan that lets you spread your out-of-pocket drug costs into predictable monthly payments throughout the year, rather than paying large amounts upfront at the pharmacy.

Changes to Medicare Part D Extra Help in 2026

The Medicare Part D Low Income Subsidy, also known as Extra Help, has been expanded under the Inflation Reduction Act. This program allows qualifying low-income individuals to pay $0 premiums for Medicare Part D coverage and provides fixed copayments for prescription drugs.

As of 2024, Extra Help eligibility expanded to include individuals with incomes between 135% and 150% of the federal poverty line who meet resource limit requirements. Previously, the program was only available to those making less than 135% of the federal poverty limit. This expansion continues in 2026, helping more low-income beneficiaries access affordable prescription drug coverage.

Medicare Part D 2026 Changes

There are more helpful changes in store for Medicare Part D beneficiaries in 2026. The Inflation Reduction Act will continue to help enrollees save money on prescription drug costs in 2026. The following changes include:

Preparing for Medicare Part D in 2026

The Medicare Annual Enrollment Period for 2027 coverage runs from October 15 to December 7, 2026. If you already have 2026 coverage and want to make changes for next year, this is your window. Be sure to research your plan options and compare your coverage to ensure you make the most informed decision possible regarding your Medicare Part D benefits.

During the Annual Enrollment Period, our agents can help educate you on the plans in your area to fit your healthcare and financial needs. Complete our online rate form to work one on one with a licensed agent in your area.