Medicare Part D Premiums Expected to Rise in 2026
While final figures aren’t available yet, it’s anticipated that Medicare Part D Prescription Drug Insurance premiums will see noticeable increases in 2026.
Part D Insurance is provided by private companies and is overseen by the Centers for Medicare and Medicaid Services (CMS). This program has been functioning since 2006 and receives partial funding from the federal government.
In 2025, there was a marked increase in premiums alongside a drop in profits. This trend can be attributed to a few factors, particularly the growing demand for prescription drugs and rising drug prices.
Another contributing factor to the increased premiums between 2024 and 2025 was a significant change in how Medicare covers prescription drug costs.
There used to be a coverage gap labeled the “donut hole.” This gap meant that after beneficiaries spent a certain amount on prescriptions, they were responsible for all costs until reaching a specific out-of-pocket threshold. After that, they would only pay 5% of remaining costs within the year.
The Inflation Reduction Act addressed these coverage gaps, gradually making changes. Since 2025, out-of-pocket expenses for Part D policyholders have been capped at $2,000 annually.
This legislation mandated that insurance companies bear most costs once beneficiaries’ expenses surpassed that $2,000 limit, which contributed to the increased premiums for 2025, even with an added $6.2 billion in federal subsidies to insurers this year.
However, it’s expected that these subsidies will drop by around 40% in 2026.
Insurance companies are still developing plans and submitting bids for 2026, but sources mention that premiums could rise steeply due to high tariffs and claims, changes in regulations, and decreasing subsidies.
An official from CMS suggested that premiums might increase by roughly $10 a month just to offset the loss in subsidies. Overall, the average premium hike for 2026 is anticipated to be under $50 a month, but this will vary according to individual policies and insurers.
Information regarding Part D policies is set to be revealed when the open registration period begins on October 7th, so it might be wise to start prepping now.
Beneficiaries should be aware that their current plans may not be available in 2026.
Additionally, a rise in Part D premiums is expected for all policies starting in 2026. According to a fact sheet from July 28th, significant measures had to be undertaken to prevent a drastic price increase compared with the prior year.
These measures included negotiations with insurance companies about bid terms and rejecting bids that didn’t meet standards.
CMS has not published specifics regarding the 2026 premiums, with average figures expected to come out in mid to late September.
Individuals with Original Medicare should anticipate higher premiums for Part D after 2026.
Some might consider enrolling in a Medicare Advantage plan as a way to bypass these increased premiums and lower profits.
However, it’s essential to note that prescription drugs are not standalone benefits; they’re integral to these plans. Nonetheless, Medicare Advantage Plans must adhere to similar regulations as standalone Part D policies, meaning that changes are likely regardless of enrollment choice.
