Your Guide to the 7 Biggest Medicare Changes Expected for 2026

If you’re looking ahead to plan your healthcare, you’ve come to the right place. Significant changes are coming to Medicare, and 2026 is a pivotal year for many of them. These shifts, largely driven by the Inflation Reduction Act, are set to impact prescription drug costs and coverage for millions. This guide breaks down the seven key changes you can expect.

1. First-Ever Negotiated Drug Prices Take Effect

For the first time in its history, Medicare will have the power to negotiate prices directly with manufacturers for certain high-cost prescription drugs. This landmark change is designed to make essential medications more affordable for both beneficiaries and the healthcare system.

The negotiation process began earlier, but 2026 is the year the first negotiated prices will actually go into effect. This initial round of negotiations focuses on 10 specific drugs covered under Medicare Part D. Beneficiaries who use these medications could see a significant reduction in their out-of-pocket costs.

The first 10 drugs selected for negotiation are:

• Eliquis: Used to prevent blood clots.
• Jardiance: Used to treat diabetes and heart failure.
• Xarelto: Another medication used to prevent blood clots.
• Januvia: Used to treat type 2 diabetes.
• Farxiga: Used for diabetes, heart failure, and chronic kidney disease.
• Entresto: A treatment for heart failure.
• Enbrel: Used to treat rheumatoid arthritis and other autoimmune conditions.
• Imbruvica: A cancer treatment medication.
• Stelara: Used for psoriasis, psoriatic arthritis, and Crohn’s disease.
• Fiasp; Fiasp FlexTouch; Fiasp PenFill; Novolog; Novolog FlexPen; Novolog PenFill: A group of insulin products for diabetes management.

This is a foundational shift in how Medicare manages drug costs, and its impact will be closely watched as the program expands to include more drugs in the following years.

2. Continued Impact of the Redesigned Part D Benefit

While the most significant structural change to Medicare Part D begins in 2025 with the introduction of a $2,000 annual out-of-pocket cap on prescription drugs, its full impact and operational adjustments will be a major story in 2026. This cap eliminates the dreaded “catastrophic coverage” phase where beneficiaries could face unlimited 5% coinsurance.

In 2026, you will continue to benefit from this cap. This means that once your spending on Part D drugs reaches \(2,000 for the year, you will pay \)0 for your prescriptions for the rest of the year. This provides unprecedented financial protection and predictability for those with high drug costs. The system will have had a year to operate under this new model, so plans and pharmacies should have streamlined processes for tracking and implementing the cap.

3. Lower Coinsurance from Ongoing Inflation Rebates

To combat soaring drug prices, the Inflation Reduction Act introduced a rule that requires drug manufacturers to pay a rebate to Medicare if they increase the price of their drugs faster than the rate of inflation. This applies to many drugs covered under both Part B (administered in a clinical setting) and Part D (from a pharmacy).

This provision has a direct benefit for you. For certain Part B drugs where prices rose faster than inflation, your coinsurance may be lower than the standard 20%. This is because your share is calculated based on the inflation-adjusted price, not the higher list price. By 2026, this program will be well-established, and you can expect to see these cost-saving adjustments applied to a growing list of medications.

4. Selection of Part B Drugs for Future Price Negotiation

While negotiated prices for Part D drugs begin in 2026, the process for Part B drugs will also be moving forward. Part B covers medications typically administered by a doctor, such as infused cancer drugs or certain injections.

In 2026, the Centers for Medicare & Medicaid Services (CMS) will be in the process of selecting and beginning negotiations for the first group of Part B drugs. The negotiated prices for these specific Part B drugs are scheduled to take effect in 2028. For beneficiaries, 2026 is an important year to watch as the list of drugs chosen for negotiation will be announced, signaling future cost savings for some of the most expensive medical treatments.

5. Expanded Use of Lower-Cost Biosimilars

A biosimilar is a biological product that is highly similar to and has no clinically meaningful differences from an existing FDA-approved biologic, often called the “reference product.” They can provide more affordable treatment options for complex conditions.

To encourage the adoption of these lower-cost alternatives, Medicare is temporarily increasing the payment rate for certain biosimilars under Part B. This initiative runs through 2027. By 2026, this financial incentive will have been in place for several years, fostering a more competitive market. This means your doctor may have more effective, lower-cost biosimilar options available for your treatment, potentially reducing both your and Medicare’s expenses.

6. Adjustments to Medicare Advantage (MA) Plan Payments

Each year, CMS adjusts the payment rates and policies for Medicare Advantage plans. These adjustments are based on a variety of factors, including national healthcare spending trends, plan performance, and updates to the risk adjustment model that pays plans more for sicker enrollees.

While the exact changes for 2026 won’t be finalized until closer to the date, we can expect this annual cycle of updates to continue. These changes can directly affect you by influencing MA plan premiums, the scope of extra benefits offered (like dental or vision), and the networks of doctors and hospitals available. It is always wise to review your plan options during the Annual Enrollment Period to ensure your plan still meets your needs based on these yearly adjustments.

7. A Greater Push Toward "Value-Based Care"

Medicare is steadily moving away from the traditional “fee-for-service” model, where doctors are paid for each individual service they provide. Instead, it is promoting “value-based care” models. In these models, healthcare providers are rewarded for the quality and efficiency of care they deliver, not just the quantity.

By 2026, you can expect this trend to accelerate. This could mean your healthcare providers will be more involved in coordinating your care, focusing on preventive health, and managing chronic conditions more proactively. For Medicare Advantage beneficiaries, it could also translate into more innovative supplemental benefits aimed at improving overall health, such as nutrition support or programs to address social isolation.

Frequently Asked Questions

Will my Medicare Part B premium change in 2026? Yes, it is very likely. The standard Medicare Part B premium is adjusted each year based on program costs. The final amount for 2026 will be announced in the fall of 2025. While the drug cost-saving measures may help control overall Medicare spending, the Part B premium is calculated separately and is expected to continue its trend of modest annual increases.

Do these changes affect Original Medicare and Medicare Advantage plans differently? Yes, they do. For example, the negotiation of drug prices and the Part D redesign directly impact anyone with a Medicare Part D plan, whether it’s a standalone plan used with Original Medicare or part of a Medicare Advantage (MA-PD) plan. Changes to MA plan payments, however, specifically affect the benefits and costs of Medicare Advantage plans.

How can I best prepare for these 2026 Medicare changes? The best way to prepare is to stay informed and be proactive. Pay attention to your Annual Notice of Change (ANOC) letter, which you receive each fall. This document outlines any changes to your current plan for the upcoming year. During the Medicare Annual Enrollment Period (October 15 to December 7), take the time to compare your options to ensure you have the coverage that best fits your health needs and budget for 2026.