7 Changes Coming to Medicare in 2026

3. Deductibles and spending caps for Part D plans go up

The $2,000 limit on out-of-pocket expenses for prescription drug plans, which includes stand-alone plans that go with original Medicare and drug coverage provided through Medicare Advantage plans, is rising in 2026 to $2,100. The cap was introduced in 2025.

This $100 increase, a 5 percent climb, reflects the annual percentage increase in average spending for covered Part D drugs that occurred in 2024.

Also increasing is the maximum Part D deductible, adjusted each year. It will be $615, up from $590 in 2025. Some Part D plans will have lower deductibles or none at all.

4. No reenrolling in Medicare drug payment plan needed

In 2025, original Medicare enrollees in Part D prescription plans and Medicare Advantage plans with prescription coverage had the option to pay out-of-pocket costs in monthly installments rather than all at once at a pharmacy. Paired with the $2,000 cap on out-of-pocket prescription costs, that might have meant that a $2,000 bill in January became a $167-a-month payment through the Medicare Prescription Payment Plan.

To make enrollment in the program easier in 2026, those who participated in 2025 will be reenrolled automatically unless they opt out or change to a new Part D or Medicare Advantage plan. If you do change plans and want to continue on a payment plan, just contact your new drug plan.

“Automatic renewal eases burden for both participants and plan sponsors,” CMS said. For participants who decide not to stay, Part D plans must process their opt-out request within three days.

5. Original Medicare begins prior authorization test

In a six-year experiment that begins Jan. 1, millions of original Medicare beneficiaries in six states could be required to get advance approval, called prior authorization, before certain medical services, procedures or devices are covered.

If successful, the pilot project could lead to wider use of prior authorization in original Medicare, possibly using artificial intelligence (AI). The practice is already widely used in Medicare Advantage, with some plans using AI and algorithmic software to help make coverage decisions.

The experiment runs through December 2031 and could involve up to 6.4 million original Medicare beneficiaries in parts of Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington, according to estimates from McDermott+, a health care consulting firm in Washington, D.C.

It’s designed to speed up coverage decisions and cut wasteful spending on at least 16 devices, procedures and services that are “particularly vulnerable to fraud, waste and abuse or inappropriate use,” according to CMS. Technology companies that participate will be paid based on savings from denied medical claims, which has drawn the ire of the American Medical Association and consumer organizations.

The pilot project comes amid concerns from lawmakers, government watchdogs and others that Medicare Advantage plans’ prior authorization procedures can create burdens for caregivers, who have to figure out how to appeal, and risk the health of patients by delaying or denying care that would otherwise be covered under original Medicare.

6. Medicare shutters supplemental benefits pilot

More than 7 million people enrolled in Medicare Advantage plans, including many who are chronically ill and have limited incomes, may no longer be eligible for an array of extra benefits when a pilot project is terminated Jan. 1 because of excessive costs.

The Medicare Advantage Value-Based Insurance Design Model, which started in 2017, was developed to remove obstacles to care for vulnerable Medicare beneficiaries. The 62 plan sponsors participating in 2025 provide tailored benefits, such as lower prescription drug costs, food assistance, transportation to medical appointments and support to help manage chronic health conditions.

It targeted low-income beneficiaries. Those include people dually eligible for Medicare and Medicaid and those who qualify for Medicare’s Extra Help program, which lowers prescription drug prices f

The pilot program was designed to modernize Medicare Advantage and test whether the additional benefits improved health and lowered costs, according to CMS. But its high cost — $2.3 billion in 2021 and $2.2 billion in 2022 — caused CMS to end it.

7. Medicare Advantage plans limit nonmedical benefits

The Bipartisan Budget Act of 2018 expanded the types of supplemental benefits that Medicare Advantage plans could offer to chronically ill enrollees. In 2026, CMS is limiting the types of allowable coverage.

This help, called Special Supplemental Benefits for the Chronically Ill, doesn’t have to relate to health but must have a reasonable expectation of improving or maintaining the health or function of someone who has a persistent medical condition, according to CMS.

Among the benefits and treatments that won’t be allowed in 2026:

• Alcohol, cannabis and tobacco products
• Certain cosmetic surgeries and procedures, such as facelifts, treatment for facial lines and remedies for atrophy of collagen and fat
• Funeral planning and expenses
• Life insurance and hospital indemnity insurance
• Unhealthy foods

“We believe that codifying a nonexhaustive list of examples of items or services that do not meet these standards will provide transparency and greater certainty for MA organizations and enrollees about the rules that govern these benefits,” CMS says in the rule.