Medicare’s upcoming open enrollment period is bringing both challenges and opportunities. While rising premiums remain a certainty—a trend that’s hardly new—broader financial pressures on the system could complicate matters further. The ballooning national debt tied to President Donald Trump’s One Big Beautiful Bill Act (OBBBA) has raised concerns about possible Medicare cuts, more complex plan options, and reduced access to care. Yet, it’s not all bad news. Some prescription drug costs are set to decline, with insulin prices possibly dropping even more, offering real relief to many seniors.
Medicare Explained
It is important to understand what Medicare is before examining any changes that will or may occur in 2026. Whether you have had a medicare plan for years or are entering open enrollment for the first time, you should be aware of some basics.
For instance, what is open enrollment? It is a period of time from October 15 to December 7 each year in which you can enroll in or change your coverage.
There are two original parts to basic medicare coverage.
Part A covers inpatient hospital care, skilled nursing facility treatment after inpatient hospital treatment, home health, and hospice care.
Part B provides payment for in-office doctor’s visits, outpatient medical tests and procedures, certain medical equipment, such as wheelchairs and walkers, and preventive measures.
In addition to Parts A and B, you can purchase a Part D plan, which covers prescription drugs. Part C plans, referred to as Medicare Advantage (MA) plans, provide the same coverage as Parts A and B and often include Part D. In addition, MA plans usually offer additional benefits, such as coverage for dental, vision, and hearing, as well as wellness perks like gym memberships.
Premiums Going Up
Benjamin Franklin wrote that, “In this world nothing can be said to be certain, except death and taxes.” Of course, that was in the late 17th century. Today, we could add medicare premium increases to that list.
Part B premiums are expected to jump 11.6% next year, according to the 2025 Social Security and Medicare Trustee Report. That is about double the 6% increase this year. Monthly premiums will rise $21.50 to $206.50, predicts the report.
You don’t necessarily see the Part B premiums increase, because the premium is automatically deducted from your Social Security check. However, you will feel it.
Each year, the Bureau of Labor Statistics figures the Consumer Price Index for Wage Earners (CPI-W). This is used to determine if there is a Cost of Living Adjustment (COLA) for Social Security benefits. The predicted COLA for 2026 is 2.7%. With the average Social Security check running $2,006.69, that would mean an added $54.18 per month. However, a projected increase in Part B premiums of $21.50 a month would reduce the COLA amount to $32.60 ($51.18 – $21.50 = $32.60).
Wait, there is more. In addition to your monthly Part B premium, you pay an annual deductible. That amount is expected to increase $31.00 from the current $257.00 to $288 in 2026. That practically wipes out the average COLA increase.
Part D Changes
Part D premiums are harder to track than changes in Part B. That is because private insurance companies run those programs. Part D premiums have become less volatile since being governed as part of the Inflation Reduction Act (IRA). That law contains a provision that limits the amount insurance companies can increase premiums for prescription coverage to 6% per year.
The standard Part D annual deductible is projected to increase slightly from $590 this year to $615 in 2026. In addition, maximum out-of-pocket costs for Part D plans will only increase $100 from $2,000 in 2025 to $2,100 in 2026.
Medicare Prescription Payment Plan Auto-Renewal
The Medicare Prescription Payment Plan (MPPP) does not save you money, but it can make paying for medications easier. It allows you to spread out-of-pocket costs over a calendar year.
Everyone who enrolls in MPPP this year will have the plan automatically renewed next year. That is, of course, unless you opt out. You can leave the plan at any time.
The only way you can be removed from MPPP is if you miss payments.
Prior Authorization Expansion
Prior authorization is a sore point for many health plan participants, including MA participants. It requires obtaining approval for certain types of care.
Original Medicare Parts A and B currently only require prior authorizations for some hospital outpatient services and durable medical equipment. However, in 2026, Arizona, Ohio, Oklahoma, Texas, and Washington will require prior approval for certain services, including knee arthroscopy for knee osteoarthritis, nerve stimulator implants, and more.
Most MA plans include prior authorizations. However, data indicate that the vast majority of MA prior authorization denials are unjustified. The Kaiser Family Foundation (KFF) found that 81% of denials were overturned from 2019 through 2023.
Drug Prices Lower
The IRA authorized Medicare to negotiate drug prices. The results of initial negotiations will show up in 2026.
Those results may be modest, given the limited number of drugs involved. But negotiations will continue each year, so long-term, they should result in greater savings on more prescriptions.
Insulin Cost Drops
According to the Centers for Disease Control (CDC), 29.2% of Americans 65 or older have diabetes.
The IRA specifically targeted the cost of insulin for the treatment of diabetes. It set a maximum price of $35 per month for insulin supplies under Part D coverage. Further, it waived the deductible for insulin.
Medicaid Eligibility for Seniors More Stringent
A 2024 report from The Commonwealth Fund determined that 12.8 million are eligible for both Medicare and Medicaid. These individuals are referred to as dual-eligible.
The OBBBA set new requirements for Medicaid eligibility, making selecting plans and maintaining eligibility more difficult. As a result, health services, especially in rural areas, may suffer.
Medicaid payments to many rural hospitals are a lifeline. Without that money, many would face closure.
Changes in MA Plans
Medicare Advantage plans have grown to cover about 51% of Medicare beneficiaries (over 34.5 million of 67.9 million eligible people). That percentage is forecast to grow to “nearly two-thirds by 2034”, according to the Congressional Budget Office.
More people are attracted to MA plans because premiums are often lower than original Medicare. In fact, many plans offer zero premiums. In addition, they offer expanded coverage, including dental, vision, hearing, fitness, and care for chronic conditions.
However, the private insurance companies that operate MA plans may trim or alter some of these extra benefits in 2026 to cut costs. Additionally, some benefits covering chronic illnesses may change. Some insurance companies will be leaving specific markets in 2026. Therefore, it is essential to review your coverage with a licensed insurance professional.
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