The new year brings significant changes to Medicare that will affect the 67 million Americans enrolled in the program. The headline numbers are stark: Part B premiums are jumping by nearly 10% to $202.90 per month. But dig deeper, and the picture becomes more nuanced—with prescription drug costs capped, Part D premiums declining, and new tools available to help beneficiaries choose the right coverage.
For retirees on fixed incomes, understanding these changes isn't optional—it's essential for managing healthcare costs and making informed coverage decisions.
What's Changing in 2026
Part B Premium Increases
The standard monthly premium for Medicare Part B will be $202.90 in 2026, an increase of $17.90 from the $185.00 charged in 2025. This 9.7% jump is one of the largest single-year increases in recent memory.
The Part B annual deductible also rises—to $283 in 2026, up from $257 in 2025. Beneficiaries must pay this amount out of pocket before Medicare coverage kicks in.
Higher-income beneficiaries pay more. Those with modified adjusted gross incomes above $106,000 (single) or $212,000 (married filing jointly) pay Income-Related Monthly Adjustment Amounts (IRMAA) on top of the standard premium.
Part A Hospital Coverage
For the minority of beneficiaries who pay Part A premiums (those who didn't work enough quarters to qualify for premium-free coverage), the monthly cost rises to $518 in 2026.
More broadly, the Part A inpatient hospital deductible increases to $1,736 in 2026, up from $1,676 in 2025. This deductible applies each time a beneficiary is admitted to a hospital.
The Prescription Drug Good News
While Part B costs are rising, the prescription drug landscape offers some relief.
Out-of-Pocket Cap Holds
The $2,000 annual cap on out-of-pocket prescription drug costs, introduced in 2025, rises only modestly to $2,100 in 2026. This cap represents a dramatic improvement from the pre-cap era, when some beneficiaries paid tens of thousands annually for medications.
"For beneficiaries on expensive specialty medications, the out-of-pocket cap is life-changing. Someone who was paying $10,000 or more annually for cancer drugs now has their costs capped at $2,100. That's the kind of protection that can prevent medical bankruptcy."
— Medicare policy analyst
Part D Premiums Decline
In an unusual bright spot, the average stand-alone Part D premium is projected to decrease from $38.31 in 2025 to $34.50 in 2026—a drop of $3.81 per month. This decline reflects efficiencies from the drug price negotiation program and changes in plan design.
However, the number of available Part D plans is shrinking. Nationwide, the count drops from 464 plans in 2025 to approximately 360 in 2026, which may limit options in some areas.
Medicare Advantage Changes
For the 33 million beneficiaries enrolled in Medicare Advantage plans, 2026 brings important shifts:
Stability With Caveats
Overall access remains stable, with over 99% of Medicare beneficiaries having access to at least one MA plan and 97% having access to 10 or more choices. However, the total number of available plans decreases slightly, from 5,633 in 2025 to approximately 5,600 in 2026.
Benefit Reductions
Many MA plans are trimming supplemental benefits—the extra coverage beyond what Original Medicare provides. Beneficiaries may see:
- Reduced dental, vision, and hearing coverage
- Narrower provider networks
- Increased cost-sharing for certain services
- Elimination of some fitness and wellness benefits
These changes reflect financial pressures on MA plans from reduced government payment rates and increased regulatory requirements.
A Special Opportunity for 2026
New for 2026: beneficiaries who used the Medicare Plan Finder during their first three months on a new MA plan and discover that the plan's information about in-network doctors was incorrect will be eligible for a special enrollment period to switch plans. This is a one-year pilot program aimed at addressing complaints about inaccurate provider directories.
Open Enrollment Periods to Know
Several enrollment opportunities exist in 2026:
Medicare Advantage Open Enrollment Period
Running from January 1 through March 31, 2026, this period allows current MA enrollees to:
- Switch to a different Medicare Advantage plan
- Switch to Original Medicare (with the option to add a Part D plan)
- Drop their MA plan and return to Original Medicare
Note: This period is only for those already enrolled in MA plans. Those on Original Medicare cannot use this period to join an MA plan.
Annual Election Period
The main enrollment window runs from October 15 through December 7. During this period, all Medicare beneficiaries can:
- Switch between Original Medicare and Medicare Advantage
- Change MA plans
- Add, drop, or switch Part D prescription drug plans
What Beneficiaries Should Do Now
1. Review Your Current Coverage
Don't assume last year's plan is still the best choice. Check whether your doctors remain in network, your drugs are still covered, and your costs align with your budget.
2. Use Medicare Plan Finder
The official Medicare.gov Plan Finder tool has been updated for 2026 with new features including better provider directory verification and enhanced filtering options. Spend time comparing your options.
3. Account for Income-Based Premiums
If your income puts you in IRMAA territory, factor those additional costs into your planning. For high-income retirees, Part B premiums can exceed $600 per month.
4. Consider Total Costs, Not Just Premiums
A plan with a low premium may have high cost-sharing. Look at the total expected cost based on your actual healthcare usage patterns.
5. Get Help If Needed
State Health Insurance Assistance Programs (SHIP) offer free, unbiased Medicare counseling. If the complexity feels overwhelming, trained counselors can help you navigate your options.
The Bottom Line
Medicare in 2026 presents a mixed picture: rising Part B costs tempered by prescription drug protections and declining Part D premiums. For beneficiaries, the key is understanding how these changes affect their specific situation.
The Medicare program serves more Americans than ever, and its complexity continues to grow. Those who take time to understand their options and actively manage their coverage will be best positioned to control costs while maintaining access to quality care.
With open enrollment periods available, there's no excuse for staying in a plan that no longer fits. Review, compare, and choose wisely—your healthcare and your wallet depend on it.
