What This Year's Biggest Medicare Changes Mean for You
Some drug prices are falling, other costs are climbing, and new rules abound. Here's what you need to know.
Editor’s Note: This article is the last in a five-part special report exploring the connection between your money and your health. Other stories in the series look at 15 ways to lower your healthcare costs, how your finances affect your physical and mental health, the challenges of long-term care and managing the costs of mental health treatment.
If you're among the roughly 70 million people who get health coverage through Medicare, the federal insurance program for people age 65 and older and some younger people with disabilities, you're probably already aware of some of the big changes to the system in 2026 — changes that have hit budgets hard.
This year's 9.7% jump in premiums for Part B, which covers outpatient care, was the biggest increase in four years and eats up more than 25% of this year's 2.8% annual inflation adjustment (COLA) for Social Security benefits.
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Meanwhile, cost pressures have caused some Medicare Advantage plans sold by private insurers to scale back extra benefits, such as dental, vision and hearing coverage, or eliminate others, such as allowances for transportation and over-the-counter purchases.
In some cases, private insurers have shut down plans or exited markets entirely. Those headline-grabbing shifts, however, aren't the only big changes to Medicare this year — and not all of the developments hurt your bottom line. You may benefit from new policies regarding drug pricing and telehealth services. But the new requirements for prior authorization in some areas and possible further shake-ups to Advantage plans? Not so much.
“There's a lot to think about and a lot to compare, and it can just be really overwhelming,” says Lindsey Copeland, director for federal policy at the Medicare Rights Center.
Here's the lowdown on this year's Medicare changes.
Some drugs are getting cheaper
New, lower prices went into effect on January 1 for 10 drugs covered under Medicare Part D, the first price reductions to be negotiated by Medicare directly with pharmaceutical companies under a landmark provision in the 2022 Inflation Reduction Act.
The medications include blood thinners Eliquis and Xarelto, diabetes drugs Jardiance and Januvia, and heart-failure treatment Entresto.
The nearly 9 million Part D beneficiaries who take these drugs will pay about 50% less on average than in 2025, according to the Centers for Medicare & Medicaid Services (CMS). But individual savings will depend on the particular drug and drug plan, and could range from a few hundred dollars to several thousand, says Gerard Anderson, a professor in the department of health policy and management at Johns Hopkins Bloomberg School of Public Health.
Lower, negotiated prices on an additional 15 drugs, including the diabetes and weight-loss medications Ozempic and Wegovy, will go into effect in 2027. A third round of negotiations, announced in January, will cover 15 more drugs, including Botox (to treat migraines and muscle conditions, not for cosmetic purposes), the GLP-1 diabetes drug Trulicity, and several cancer medications. Those prices will take effect in 2028.
What to do: If you have diabetes or another condition commonly treated by drugs whose prices have been negotiated by Medicare, but your particular medication is not among them, ask your doctor if it would be appropriate for you to switch to one that is. A 30-day supply of diabetes medications Januvia and Farxiga now costs 79% and 68% less, respectively, than their 2023 list prices. If you currently take other medications to treat the condition, such as Mounjaro or Afrezza, you could save a bundle.
You may also qualify for a temporary program, Medicare GLP-1 Bridge, that will cover GLP-1 drugs Wegovy and Zepbound for weight reduction this year. If you're enrolled in Part D, you'll pay just a $50 monthly co-pay for treatment between July 1 and December 31. You need preauthorization from your doctor.
Telehealth is sticking around
Before the pandemic, Medicare's telehealth coverage was generally limited to rural areas and required patients to travel to a designated clinic to receive care remotely. Many restrictions were lifted during COVID, making telehealth more widely available, but those benefits have been on the government's chopping block recently.
In February, Congress extended key provisions through 2027. These include allowing beneficiaries to receive services at home by video and audio, regardless of geographic location; audio-only visits for those who can't use video; and expanded coverage for remote care by physical and occupational therapists and other health providers.
“Telehealth has been an important tool to ensure that people can access the care they need, when and where they need it,” says Gretchen Jacobson, vice president of Medicare at The Commonwealth Fund.
What to do: Ask your doctor's office which appointments can be handled through telehealth, such as test result reviews or medication check-ins. Many practices that expanded services during the pandemic have kept it as an option.
Telehealth can't replace all types of primary care, however, such as wellness visits, immunizations, and some urgent or acute-care needs.
You may need to jump through a few more hoops
Under a six-year pilot program that launched in January, you now need prior authorization to receive certain medical services if you're covered under original Medicare and live in one of six states: Arizona, New Jersey, Ohio, Oklahoma, Texas or Washington.
The 17 procedures subject to artificial intelligence-assisted prior review include some steroid injections for pain management and some nerve-stimulation techniques used to treat Parkinson's disease, incontinence and sleep apnea.
The CMS says approval decisions will be made within 72 hours and that licensed clinicians, not AI or the outside organizations running the program, will make final coverage decisions.
But some policy experts have expressed concern over the potential impact. “The companies that have been hired to administer the approval process are incentivized to reduce spending, which means approving fewer services,” says Jacobson.
What to do: If you live in one of the affected areas and your doctor recommends one of the services identified in the pilot program, make sure the provider gets prior approval. Otherwise, you could be hit with a huge bill afterward.
Advantage plans could become more restrictive
In January, the Trump administration issued a proposal to keep reimbursement rates to Medicare Advantage insurers nearly flat next year, compared with the 4% to 6% boost insurers had anticipated. The news prompted dire warnings about the possible impact on enrollees.
“Flat program funding at a time of sharply rising medical costs and high utilization of care will impact seniors' coverage,” said Chris Bond, a spokesperson for AHIP, the national health insurance trade organization, in a statement at the time.
“If finalized, this proposal could result in benefit cuts and higher costs for 35 million seniors and people with disabilities when they renew their Medicare Advantage coverage in October 2026,” Bond said.
In early April, CMS announced the reimbursement rate had been finalized at 2.48%, higher than the initial 0.09% proposal, but probably not high enough to prevent changes in some plans for 2027.
What to do: If you're enrolled in a Medicare Advantage plan, carefully review the “annual notice of change” you get this fall for any adjustments to premiums, deductibles, co-pays and benefits. That will give you time to consider alternatives before open enrollment, which runs from October 15 to December 7.
If you sign up for an Advantage plan but then have second thoughts, you'll have another shot at choosing during the separate Medicare Advantage open enrollment period from January 1 to March 31. During this time, you can switch to a different plan or to original Medicare. Says Jacobson, “It's important to remember you have options.”
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
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