Changes are Coming to Medicare in 2026 - What You Should Know

Health insurance changes every year, and Medicare is no exception. In 2026, some costs are decreasing while others are increasing. Earlier this year, Congress repealed the Inflation Reduction Act (IRA), which capped Medicare-related costs on out-of-pocket expenses and medications.

If you're getting Medicare or are preparing to enroll, WorkMoney has put together this guide to help you understand exactly what to expect with Medicare changes.

Medicare Cost Changes at a Glance

If you’re enrolling in Medicare or making changes to your plan, pay attention to what’s changing during open enrollment this year. 

Costs Going Up

Most Medicare costs are rising in 2026, including Part B premiums, Part D deductibles, and out-of-pocket maximums on drug costs.

Part B monthly premium

Original Medicare includes two main parts: Part A, which is hospital insurance, and Part B, which is medical insurance. In 2026, part B monthly premiums will increase from $185 to $206.50. In 2024, it was $174 per month. That’s an extra $258 a year.

Part D deductible

Part D is a separate prescription drug plan. Original Medicare lets you add Part D, and Medicare Advantage usually includes it. Next year, costs will go up from $590 to $615. That’s a yearly increase of $300.

Out-of-pocket drug maximum

In 2025, the maximum Part D out-of-pocket prescription costs were $2,000. For 2026, it’ll go up to $2,100. This is the amount you’ll pay on prescription drugs until insurance kicks in.

You can spread these costs into equal monthly payments through a prescription payment plan. This is an optional payment choice; if you don’t want it, you’ll need to opt through your insurance provider.

What’s Going Down

There are some Medicare changes where costs are dropping, including Part D premium averages, some drug costs, and Medicare Advantage plan premiums.

Average Part D premium

Average standalone Part D premiums will drop from $38.31 to $34.50. The $3.81 monthly drop will save you almost $46 a year. 

You can get Part D in addition to Original Medicare. If you have Medicare Advantage, it’s usually included in your plan, as well as other, lower out-of-pocket costs.

Price of select high-cost drugs

The Inflation Reduction Act allows Medicare to negotiate the cost of some drugs with pharmaceutical companies. Right now, that’s only 10 drugs, including:

• Eliquis

• Enbrel

• Entresto

• Farxiga

• Imbruvica

• Jardiance

• Januvia

• NovoLog

• Stelara

• Xarelto

These are the first 10 drugs that will get lower prices in Medicare, and another slate of prescriptions will come in 2027. Right now, the savings on these medications will save consumers $1.5 billion in out-of-pocket spending in 2026.

Some Medicare Advantage premiums 

Medicare Advantage is a privately run Medicare alternative to Original Medicare. It isn't going away, but enrollment is expected to drop from 34.9 million to 34 million in 2026. Right now, about half of Medicare beneficiaries are enrolled in Medicare Advantage.

The monthly costs for Medicare Advantage premiums are decreasing from $16.40 to $14. This $2.40 drop will save enrollees less than $30 a year.

How to Budget for Medicare Changes

With many Medicare costs going up in 2026, preparing for these major financial changes is essential.

1. 1

   Estimate your total expenses

   Everyone’s expected costs vary widely, whether you have Original Medicare or Medicare Advantage. Use Medicare’s out-of-pocket cost estimator to see how you can manage expenses for coverage and medication.

2. 2

   Review your current plan

   During open enrollment, October 15 - December 7 2025, you can make changes to your Medicare plan. Before making any changes, review your current plan and see how it compares to other options. 

   If you have Original Medicare, you can switch to Medicare Advantage. You can also drop Medicare Advantage for Original Medicare. Use the Medicare plan finder to compare plans based on deductions, premiums, and drug coverage. 

   You can also use CoverRight to compare options and talk to Medicare experts about your coverage and needs. CoverRight is free and available in all 50 states, giving you access to personalized guidance every step through Medicare enrollment.

3. 3

   Treat healthcare like a bill

   If you have the financial means to make the changes, add healthcare costs to your monthly budget. Turn your healthcare costs into a bill and put a set amount of money into a health savings account each month. Try automating deposits so you can set it and forget it.

   Additionally, check out discount services like GoodRx that can help you save on your out-of-pocket prescription costs.

4. 4

   Use assistance programs

   There are a few government-backed programs for low-income households or those who need extra help paying for Medicare. 

   For instance, you might qualify for Medicaid, Social Security, or State Pharmaceutical Assistance Programs (SPAPs). SPAPs are state-run financial assistance programs that help folks pay for certain medications and prescriptions. Currently, 48 states have SPAPs, and 13 states have their own state discount programs. Check what you’re eligible for through the National Center on Aging (NCOA).

5. 5

   Talk to your doctor

   No one knows your medical history like your primary care physician and healthcare team. Ask your team what changes you can make to save on medication and healthcare. You might qualify for some 90-day prescriptions or switching to generic drugs, which could lower some costs.