Retirement Retired Life

The Biggest Medicare Changes for 2026 That You Should Know Before You Shop

New rules and costs are arriving. Get ahead so you can avoid money mistakes this year.

By Adam Palasciano

Edited by Calista Headrick

Updated Nov. 3, 2025

If you're entering retirement or already enrolled in Medicare, 2026 brings important changes that could affect your health-care coverage and out-of-pocket costs. Understanding these updates now means you're better positioned when you shop for a plan during open enrollment. The following eight changes lay out what's shifting under Medicare and how you can prepare ahead of time to avoid money mistakes.

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Medicare costs are going up

For 2026, many of the standard Medicare costs are set to rise. For example, the monthly premium for Medicare Part B is projected to jump from about $185 to $206.50 (an 11.6% increase), and the annual deductible is expected to increase roughly 12%.

These cost increases reflect broader inflation in health care and pressures on Medicare funding. As a retiree, you'll want to build these higher costs into your budget now rather than be surprised later.

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The growing national deficit could cause Medicare cuts

The national deficit's expansion might trigger automatic cuts in Medicare if lawmakers don't act, meaning benefits or services could change beyond just cost increases. The One Big Beautiful Bill Act (OBBBA) could add $3.4 trillion to the deficit by 2034, which would lead to the "sequester cliff." Under the Pay-As-You-Go law, this provision would trigger automatic spending cuts once the deficit reaches a certain amount.

According to projections, the federal deficit could force as much as $45 billion in Medicare cuts in fiscal year 2026, and a total of $536 billion by 2034. These funding uncertainties underscore the importance of not assuming current benefit levels remain constant.

You could face prior authorization requirements

Some services and procedures under Medicare, such as electrical nerve stimulator implants, skin and tissue substitutes, and knee arthroscopy, may require prior authorization in 2026 if you live in one of these six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. This means that before certain treatments or drugs are covered, you may need your Medicare plan's approval first. Of those enrolled in Medicare Advantage plans, 99% already face prior authorization requirements for certain types of treatment.

For you, that means checking your plan's rules carefully and possibly changing plans if your current one becomes more restrictive.

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Your Medicare Advantage plan may carry fewer benefits

If you're on a Medicare Advantage plan (Part C), be aware: starting 2026, the supplemental benefits (so-called "extras" like meal delivery, transportation, or other non-medical perks) may be scaled back as new federal rules go into effect.

Before renewing your MA plan, compare the benefit list and don't assume all the extras you enjoyed will still be there.

You'll be auto-enrolled in the Medicare Prescription Payment Plan (MPPP)

Beginning in 2026, if you're covered under Part D for prescription drugs, you'll automatically be enrolled in the Medicare Prescription Payment Plan (MPPP), which lets you spread your drug costs across the year rather than pay large sums all at once.

This can help with budgeting, especially if you take several medications, though you'll still want to check how your monthly payment will be calculated. However, you have the option to opt out of this program if you'd like to.

There will be an out-of-pocket price cap for prescription drugs

Under Part D, your out-of-pocket maximum for covered prescription drugs will be capped at $2,100 in 2026. Once you hit that limit, you won't pay copays or coinsurance for covered drugs for the remainder of the year.

This cap functions as a protection mechanism, particularly useful if you manage chronic conditions or take high-cost medications.

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The cost of insulin could drop

Good news if you use insulin: the monthly cap of $35 remains in place for covered insulin supplies, and starting in 2026, additional rules will be put in place that could lower your costs even further under both Part B and Part D.

It's worthwhile to check exactly how your plan administers insulin coverage and whether alternative options might be even more affordable.

The price of certain prescription drugs should fall

Thanks to the Biden administration's Inflation Reduction Act, the federal government can directly negotiate prices of high-cost, single-source drugs with the drug manufacturers themselves. Next year will see the first wave of cost reductions for certain high-cost medications. The program starts with a small list of drugs, but it represents a meaningful step toward lower drug costs for seniors.

If you're on certain specialty medications, ask your plan how these negotiations may affect your formulary or copays.

Bottom line

The 2026 changes under Medicare mean you cannot assume that your current plan's costs and benefits will simply roll over. Some expenses may rise, benefits may shift, and your plan choices could matter more than ever.

Be prepared to review your Medicare options in depth, compare next year's coverage carefully, and integrate these shifts into your overall retirement plan so you're not surprised come open-enrollment time.

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