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Around 70 million U.S. seniors are Medicare beneficiaries, and they face some major changes to the program in 2026.
Find out more about these modifications and how they might impact where you stand financially.
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What is Medicare?
Medicare is the nation's health insurance program for seniors. Most people become eligible for Medicare coverage once they turn 65. Some younger people qualify if they are disabled.
The program picks up many of the expenses associated with medical services. However, beneficiaries on the program still incur plenty of out-of-pocket costs, including premiums, deductibles, copayments, and coinsurance.
Medicare is divided into the following. Note that Part A and Part B together are also known as Original Medicare:
- Part A – Hospital insurance
- Part B – Health insurance
- Part C – Medicare Advantage, an alternative to Original Medicare
- Part D – Prescription drug coverage
Premiums have increased
Premiums for Medicare Part B rose by 9.7% this year, to $202.90 per month.
The government says the price increase is due to a projected increase in health care spending. Some experts are already predicting another jump in premium costs for 2027.
Drug prices have been negotiated
The Inflation Reduction Act of 2022 included a provision requiring the Department of Health and Human Services to negotiate the cost of specific drugs with the companies that produce them.
In 2026, 10 Medicare Part D drugs were selected for negotiation. Prices for these medications have been slashed by up to 79%.
Some of these medications treat types of cancer, while others treat Type 2 diabetes and kidney disease. You can find a list of these drugs and their reduced costs at the Medicare.gov website.
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Telehealth has been extended
Medicare beneficiaries can continue to receive coverage for telehealth services through Dec. 31, 2027.
The services must be related to care in their home, other than behavioral or mental health issues. During this time, Medicare enrollees do not have to schedule an in-person visit within six months after the telehealth visit.
If you live in a rural community, you are permanently eligible for telehealth services for behavioral or mental health issues.
A prior authorization pilot has been introduced
A new pilot program will require an estimated 6.4 million Medicare beneficiaries to get prior approval before Original Medicare covers the cost of some equipment, services, and supplies.
The pilot program impacts people in six states:
- Arizona
- New Jersey
- Ohio
- Oklahoma
- Texas
- Washington
Services impacted by the new rules include electrical nerve stimulator implants for chronic pain, as well as knee arthroscopy procedures related to knee osteoarthritis.
Groups such as AARP and others have voiced concerns that the change could lead to the delay or denial of services for some Medicare beneficiaries.
Medicare Advantage reimbursement rates will rise next year
The final change for Medicare on this list will actually go into effect in 2027. The U.S. Centers for Medicare & Medicaid Services has finalized a 2.48% reimbursement rate for 2027 Medicare Advantage plans.
Critics have characterized the move as a "gift to insurers," noting that the federal government initially was planning a smaller 0.09% increase.
However, CMS defends its decision as a necessary way to keep Medicare Advantage and Part D coverage affordable.
More drugs will see prices fall in 2027
Looking ahead, another change that will occur in 2027 is the addition of 15 new drugs to the list of those receiving negotiated price cuts.
These include drugs used for weight loss, such as Ozempic and Wegovy, as well as other drugs prescribed to treat Type 2 diabetes, cardiovascular disease, and more.
You can find the full list at the Medicare.gov website.
Open enrollment is coming
Now that you better understand the changes around Medicare, you may decide you need a new plan that better meets your current needs.
If so, know that open enrollment is coming in the fall. Scheduled for Oct. 15 through Dec. 7, this will be the perfect time to look for a new Medicare plan.
So, look closely at this year's new rules and how they have affected you. If the impact has been negative, begin researching other Medicare options.
Getting help with Medicare
Medicare is a complex and often confusing program. Changes to the program can add to that confusion.
Fortunately, experts in your state can help clarify things.
Representatives from the State Health Insurance Assistance Program (SHIP) offer free Medicare guidance. You can use the SHIP website to find local help or call 1-877-839-2675.
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Bottom line
Medicare is constantly changing, and 2026 is no exception to that rule. Several shifts in the program will impact the care you receive and the price you pay for services.
The more you know about these changes, the easier it is to adjust to them and to lower your financial stress.
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