9 Medicare Changes to Watch in 2026

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Knowing how Medicare is evolving and which benefits you can rely on will help you focus on whether original Medicare or a particular Medicare Advantage plan will serve you best. Medical costs are increasing each year, driven by factors such as inflation and advancements in medical technology, including biosimilars.

According to Fidelity, a 65-year-old retiring in 2025 can expect to spend an average of $172,500 on health care and medical expenses throughout retirement. That's a an increase of 4% or $7,500 over the 2024 estimate.

Are rising costs and evolving program coverage rules frustrating? Absolutely — that's why we've waded through next year's Medicare changes to help keep you informed and hopefully save you money.

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9 Medicare changes to expect in 2026

One key discussion at the beginning of the second Trump administration was which changes made to Medicare by the previous administration would be kept in place or reversed. So far, the Trump administration appears to be staying the course, although with adjustments that better align with its policy objectives.

Certain provisions of the 2022 Inflation Reduction Act (IRA) needed to be codified, or they would have expired. Moreover, the Trump administration didn't follow all of the recommendations of the Biden administration. For example, it initially declined to cover GLP-1 receptor agonists for obesity, a position that had been supported by the previous administration. However, after negotiations to lower prices, it announced plans to cover the GLP-1s in 2026.

Here are nine Medicare changes in 2026, including provisions of the IRA, with a few tweaks, that will remain in effect after 2025. Be sure to scroll to the bottom, where you'll find the changes that were recently announced.

rolled 100 dollar bill inside a prescription drug container and pills on white background

1. Prescription payment plan updates

2025 was the first year that the Medicare Prescription Payment Plan (MPPP) enabled those with Medicare prescription drug coverage to spread the costs of their prescription drugs over the calendar year rather than paying in full at the pharmacy counter each time they fill a prescription. Keeping this arrangement just got easier.

Automatic renewal of plan participation. Beginning in 2026, if you participate in the MPPP, you will be automatically re-enrolled the following year, 2027, unless you opt out. Additionally, a separate renewal notice must be sent after the end of the annual election period, which should include the upcoming terms and conditions of the payment plan.

If you decide to opt out, CMS will require plan sponsors to process opt-out requests within three calendar days, rather than the initially proposed 24-hour timeframe, to reduce administrative burden.

For safety pills packaged in daily dispenser box

2. Cap on Part D prescription drug expenses indexed for inflation

Many of us are familiar with inflation indexing from our tax returns; every year, certain limits, such as how much you can contribute to an IRA, are adjusted for inflation. However, that doesn't mean it will necessarily change every year; the formula that is applied could result in no change in a given year.

In 2026, the cap on out-of-pocket prescription drug costs is $2,100, a $100 increase over the 2025 limit of $2,000. That means you'll be liable for an additional $100 in drug costs over the year in 2026.

A red wooden block with upward-pointing arrow on a pile of colorful pills. Rising costs of prescription&nbsp;drugs concept.

3. Medicare Part D deductible is going up

Far more attention is paid to the Part A ($1,736 in 2026) and Part B ($283 in 2026) deductibles. That is probably because those amounts are set in stone and everyone must pay them, unlike a Part D. Your deductible for your Medicare Part D insurance will depend on the plan you choose. Moreover, the deductible can vary, and you may not have to pay one at all. However, if you are subject to a Part D deductible, there is a maximum that no policy may exceed.

Annual deductible. If your plan has a deductible, you pay 100% of your gross covered prescription drug costs (GCPDC) until the deductible is met. For 2026, that maximum increased to $615, $25 more than the 2025 amount of $590.

You pay all out-of-pocket costs until you meet your plan's full deductible. After that, you’ll pay 25% coinsurance for both generic and brand-name drugs. This continues until your total out-of-pocket spending on covered Part D drugs reaches $2,100 for 2026.

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4. Limit on special supplemental benefits for the chronically ill (SSBCI) on Medicare Advantage

Medicare Advantage (MA) plans are known for the extra benefits they provide to their subscribers. Some MA plans offer special benefits tailored to the enrollee's medical condition. The CMS finalized and codified a non-exhaustive list of non-allowable supplemental benefits that are on offer under the Special Supplemental Benefits for the Chronically Ill (SSBCI) category.

In the Final Rule, the CMS adopted the non-exhaustive list of non-primarily health-related items or services that do not meet the standard of having a reasonable expectation of improving or maintaining the health or overall function of the enrollee.

Here is a list of examples of items or services that may not be offered as SSBCI, including all of the following:

Alcohol
Tobacco
Cannabis products
Non-healthy food
Life insurance
Hospital indemnity insurance
Funeral planning and expenses
Procedures that are solely cosmetic in nature and do not extend upon Traditional Medicare coverage
Broad membership programs inclusive of multiple unrelated services and discounts

Senior woman injecting insulin at home -

5. Insulin costs capped

Insulin costs for Medicare beneficiaries were capped at $35 per month or less in 2023, depending on negotiated or maximum fair prices. This cap will now apply annually, beginning in 2026. And watch your benefit statements, as no deductible should be applied to insulin.

For 2026 and each subsequent year, the applicable cost-sharing amount is the lesser of:

$35
25% of the maximum fair price established for the covered insulin product under the Medicare Drug Price Negotiation Program
25% of the negotiated price of the covered insulin product under the stand-alone Medicare prescription drug plan (PDP) or MA plan with prescription drug coverage (MA-PD plan)

Proud mature woman smile after vaccination with bandage on arm. Beautiful smiling senior woman 70s after receiving the coronavirus vaccine. Elderly lady getting immunization via anti-viral vaccine.

Medicare beneficiaries have had access to a limited number of free vaccines since 2023. However, free vaccines are now a permanent feature of Medicare Part D plans. Part D insurers must continue to waive deductibles and cost-sharing for adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP).

The list of free vaccines is updated every year, so just because a vaccine is on the list this year doesn't mean it will be on the list next year.

If you are traveling outside of the country, you may want to consult the CDC's list of recommended vaccinations depending on your destination. We are in the midst of a global Measles outbreak. The CDC suggests that you ensure you are up to date with all your routine vaccines, as "the majority of measles cases imported into the United States occur in unvaccinated U.S. residents who become infected during international travel."

As an extra measure of caution, you can see which countries in the world have reported measles outbreaks before you travel.

7. Prior authorizations for original Medicare for six states in 2026

Original Medicare, also known as traditional Medicare, has historically required little in the way of pre-authorization for beneficiaries seeking services; pre-authorization was typically the domain of Medicare Advantage. This change is effective as of January 1, 2026.

CMS is using AI to "test ways to provide an improved and expedited prior authorization process relative to original Medicare’s existing processes, helping patients and providers avoid unnecessary or inappropriate care and safeguarding federal taxpayer dollars," per a CMS press release.

Six states — New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington — will begin using the Wasteful and Inappropriate Service Reduction (WISeR) Model to perform prior authorization evaluations.

Medicare beneficiaries can be assured that AI will not be determining whether a procedure is approved or denied; a human being will be reviewing the information. "... while technology will support the review process, final decisions that a request for one of the selected services does not meet Medicare coverage requirements will be made by licensed clinicians, not machines," CMS explained.

Everyday money carrying. Finance and budget lifestyle detail.

8. Maximum out-of-pocket costs for Medicare Advantage plans decrease

It's unusual to see limits decrease from one year to the next, as most limits usually tick up in the new year. This is the case for Medicare Advantage participants. Unlike tax brackets, a lower number in this case is welcome. In 2026, the annual out-of-pocket limit for in-network services decreased by $100 from $9,350 in 2025 to $9,250.

The cap on out-of-pocket expenses for out-of-network services has yet to be announced.

A 3d rendering of pre-filled injection pen, similar to those used for diabetes or weight management medications with letters spell out GLP-1

9. Medicare to cover weight loss drugs

Initially, the Trump administration decided not to cover GLP-1 weight loss medications prescribed only to treat weight loss in 2026. Cost was a big factor. Medicare currently covers drugs that are used for weight loss, like Mounjaro and Ozempic, but only when they are prescribed by doctors for other reasons, like managing diabetes.

After negotiations with many major drug companies, the Trump administration struck a deal to lower the costs of GLP-1 medications and Medicare to begin covering the weight-loss drugs in 2026. Medicare will pay $245 per month, down from list prices ranging from $1,000 to $1,350.

Beneficiaries will pay a maximum of a $50 copay. Ozempic, Wegovy, Mounjaro and Zepbound are be covered by Medicare.

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Review your Medicare plan annually

Every year, Medicare beneficiaries have at least one opportunity to change plans; you can join, switch, or drop a Medicare Advantage Plan or Medicare Part D drug plan, switch to original Medicare, or keep your current coverage. If you've reviewed your options and are satisfied with your current coverage, you don't need to do anything.

Checking your coverage each year is easy and worth your time. Medicare costs, benefits, and providers can change each year. Comparing your options could help you find better coverage or save money. If you need assistance, locate your state SHIP program (State Health Insurance Assistance Program) for unbiased help. They can help you sift through the Medicare Advantage plans available in your area to find the one with coverage that matches your needs.

Donna joined Kiplinger as a personal finance writer in 2023. She spent more than a decade as the contributing editor of J.K.Lasser's Your Income Tax Guide and edited state specific legal treatises at ALM Media. She has shared her expertise as a guest on Bloomberg, CNN, Fox, NPR, CNBC and many other media outlets around the nation. She is a graduate of Brooklyn Law School and the University at Buffalo.