Plan year 2026 is the second year of major structural changes to Medicare under the Inflation Reduction Act of 2022, and the first year that the IRA's prescription negotiation provisions actually take effect on consumer pricing. For most beneficiaries the headline news is a new annual cap on Part D out-of-pocket spending; for higher-income beneficiaries the IRMAA bracket adjustments matter; for everyone, the continuing growth of Medicare Advantage shapes the choices available in any given county.
This is our annual review of what changed, what beneficiaries should know, and what we're watching for plan year 2027.
1. The $2,000 Part D Cap Is Now Real
The most consequential change for ordinary Medicare beneficiaries in 2026 is the implementation of a hard $2,000 annual out-of-pocket maximum on covered Part D prescriptions. Before 2024, Part D had no out-of-pocket maximum — high-cost drug users could face $10,000+ in annual cost-sharing. The Inflation Reduction Act phased in protections; 2026 is the first year the full $2,000 cap applies.
What this means in practice:
- Once a Part D enrollee's true out-of-pocket (TrOOP) spending reaches $2,000 in a calendar year, the plan covers 100% of additional covered drug costs through the end of the year.
- The "donut hole" coverage gap is structurally gone. The 2024-2025 transitional 25% coinsurance through the gap has been replaced with the simple cap.
- Beneficiaries can elect a "Medicare Prescription Payment Plan" to spread out-of-pocket costs evenly over the year — useful for high-cost specialty drugs concentrated in early months.
- Plans are repricing aggressively to compensate. The average standalone Part D premium rose from ~$45 to ~$48 in 2026; some plans repriced sharply higher (the "premium stabilization" provisions are working as intended in some markets, less so in others).
2. IRMAA Brackets Adjusted, Threshold Pushed Up
For 2026, the IRMAA brackets were adjusted for inflation — the threshold where Income-Related Monthly Adjustment Amount surcharges begin moved from $103,000 in 2025 to $106,000 in 2026 for single filers (up from $206,000 to $212,000 for couples filing jointly). 2026 IRMAA is calculated from your 2024 tax return (two-year lookback).
| 2024 MAGI (Single) | 2024 MAGI (Joint) | 2026 Part B Premium | 2026 Part D Surcharge |
|---|---|---|---|
| ≤ $106,000 | ≤ $212,000 | $185.00 | $0 |
| $106K–$133K | $212K–$266K | $259.00 | +$13.70 |
| $133K–$167K | $266K–$334K | $370.00 | +$35.30 |
| $167K–$200K | $334K–$400K | $480.90 | +$57.00 |
| $200K–$500K | $400K–$750K | $591.90 | +$78.60 |
| ≥ $500K | ≥ $750K | $628.90 | +$85.80 |
The IRMAA appeal that most people don't know about
If your income dropped after the 2024 tax year due to a "life-changing event" — work stoppage, retirement, divorce, death of spouse, loss of pension, loss of income-producing property — you can file Form SSA-44 to request a reduction. Social Security typically processes appeals within 30-60 days. If granted, your Part B and Part D premiums recalculate to reflect lower current-year income.
The single most overlooked IRMAA appeal scenario is retirement itself. Many people retire in their early 60s, claim Social Security at 67, but go on Medicare at 65. The 2024 tax return that drives 2026 IRMAA may reflect their pre-retirement income; SSA-44 corrects this if filed. About 8% of Medicare beneficiaries pay IRMAA; many more should be filing SSA-44 than do.
3. Medicare Advantage Crossed 50% — and Continues Growing
For the first time, Medicare Advantage enrollment exceeded 50% of total Medicare beneficiaries in 2024 and continued growing through 2025. As of early 2026, roughly 53% of eligible beneficiaries are enrolled in MA plans. The implications cut both ways.
For beneficiaries:
- The marginal new MA enrollee is healthier than the average current MA enrollee, which puts upward pressure on plan benefits and downward pressure on premiums in competitive markets.
- Average MA premiums remain near $0 in 2026 ($14.04 nationally weighted by enrollment, per CMS). $0-premium plans are still widely available in most metros.
- Provider-network volatility is increasing — provider terminations mid-year are more common than they used to be. Always verify your specific doctors are in-network before enrolling, and again at AEP.
- Prior authorization friction is the most consistent complaint from MA enrollees who develop conditions requiring specialty care. CMS rules tightened in 2024 but enforcement remains uneven.
For Medigap shoppers:
- The Medigap risk pool is smaller and skewing older. Premiums for new enrollees are stable but rate-increase histories are worth checking carefully — some carriers in some states have aggressive rate-increase patterns.
- Medigap Plan F is closed to those new to Medicare after 2020; the existing Plan F pool is aging and seeing larger rate increases. Long-term Plan F holders should consider switching during their state's Birthday Rule or Anniversary Rule windows where available.
4. The First 10 Negotiated Drugs Are in Effect
Under the Inflation Reduction Act, CMS negotiated prices on the first 10 high-cost Part D drugs with negotiated prices effective January 1, 2026. The negotiated prices represent reductions of 38–79% off list prices.
The 10 drugs in the first negotiation cohort:
- Eliquis (apixaban) — atrial fibrillation/blood clots
- Jardiance (empagliflozin) — Type 2 diabetes/heart failure
- Xarelto (rivaroxaban) — atrial fibrillation/blood clots
- Januvia (sitagliptin) — Type 2 diabetes
- Farxiga (dapagliflozin) — Type 2 diabetes/heart failure
- Entresto (sacubitril/valsartan) — heart failure
- Enbrel (etanercept) — autoimmune (RA, psoriasis)
- Imbruvica (ibrutinib) — leukemia/lymphoma
- Stelara (ustekinumab) — autoimmune/Crohn's
- Insulin Aspart (Fiasp/NovoLog) — diabetes
The next 15 drugs were selected in 2024 and will have negotiated prices effective January 1, 2027. The list expands further each subsequent year.
5. Open Enrollment Patterns: What Worked in 2025
Looking back at the 2024 AEP (October 15 – December 7, 2024, for plan year 2025), several patterns held that we expect to continue in 2026:
- Plan switching is undermeasured. CMS data suggests ~10% of MA enrollees switch plans during AEP; surveys suggest the percentage who should switch (formulary changes, network changes, premium increases) is substantially higher.
- The first day matters. Plans become available October 1; serious shoppers research early and finalize early in AEP. Late AEP shoppers (December 1+) have fewer agent appointments available.
- Star ratings still matter, but less than they did. The 5-star plan switching SEP remains underused. CMS scoring methodology adjustments have tightened the spread between top and bottom plans in many markets.
6. What We're Watching for Plan Year 2027
Enhanced ACA subsidies and the cliff question
Although technically an ACA topic, the expiration (or extension) of enhanced ACA premium tax credits at end of 2025 affects pre-Medicare enrollees who are bridging from employer coverage to age 65. If subsidies revert to the original 100-400% FPL band with the income cliff, more pre-65 enrollees will time COBRA exhaustion or self-employment income explicitly to maintain marketplace eligibility.
The next 15 negotiated drugs
The Round 2 list announced in 2024 includes Ozempic (semaglutide for Type 2 diabetes; Wegovy for weight loss is a separate product). When negotiated Ozempic pricing takes effect January 1, 2027, expect significant Part D plan reformulation and possibly broader coverage expansions for related GLP-1 products.
Medicare Advantage prior authorization — enforcement
CMS's tightened PA rules took effect in 2024 and 2025; enforcement and audit results from those years should be public in 2026. This will shape whether PA friction reduces meaningfully or remains the most consistent MA complaint.
Hospital-At-Home and other site-of-care expansions
The COVID-era Hospital-At-Home waiver was extended through 2024 and again through 2025; permanent codification is pending. Expect this to affect MA plan benefit design and Medicare cost data over the next two years.
The Bottom Line for 2026 Beneficiaries
For the typical Medicare beneficiary who hasn't reviewed coverage since enrollment, 2026 is the year to revisit:
- Re-shop your Part D plan during AEP (October 15 – December 7, 2026). Premium repricing in response to the $2,000 cap was uneven; the plan that was best for you in 2024 may not be in 2026.
- If you're high-income and your income recently dropped, file Form SSA-44. The IRMAA appeal is underused.
- If you're on Plan F and healthy, consider Birthday Rule or Anniversary Rule switching where available. The aging Plan F pool is producing larger rate increases than Plan G.
- If you're on Medicare Advantage, verify your specific providers and prescriptions before AEP closes. Network and formulary changes in 2026 plans were larger than usual.
- Layer supplemental coverage (cancer, critical illness, hospital indemnity) thoughtfully. Original Medicare + Medigap covers most medical bills but doesn't address the non-medical costs of serious diagnoses. See our sister site MyInsuranceRates for the supplemental side.
How We Compiled This Report
This annual report draws on CMS published data (Medicare Trustees Reports, Part D enrollment statistics, MA enrollment figures), Social Security Administration IRMAA tables, KFF analyses of Medicare Advantage trends, and the Inflation Reduction Act statutory schedule. Cost figures are 2026 plan-year amounts as published by CMS unless otherwise noted. State-specific Medigap rules are summarized from state Department of Insurance bulletins and the Medicare Rights Center's state guides.
This report is editorially independent. Our agents are paid by carriers when consumers enroll; carriers do not pay for placement, mention, or favorable framing in our editorial content. AI tools assisted with research and drafting; the final report was reviewed by licensed Medicare professionals. Errors and corrections: please email insureco@gmail.com.
Related reading: 2026 Medicare Costs Reference · Medicare Advantage vs. Medigap · IRMAA explained · Editorial Team & Methodology