AARP Hearing Center
Key takeaways
- Benefit from a new $2,100 annual cap on out-of-pocket drug costs, notes Tricia Sandiego.
- Save money as Medicare-negotiated drug prices lower costs for many widely used medications in 2026.
- Stay ahead by reviewing your Medicare benefits during open enrollment, as recommended by Sandiego.
Summary
Medicare changes in 2026 are set to bring some of the most significant updates to Medicare drug coverage in decades, impacting costs for millions of Americans. According to Tricia Sandiego, while premiums and deductibles for Medicare Part B and Part D will increase, new rules will place a $2,100 annual cap on out-of-pocket prescription drug expenses — offering much-needed financial relief for those with high medication costs. The introduction of Medicare-negotiated drug prices, made possible by recent legislation, also means lower prices on some of the most widely used and expensive medications.
With these Medicare updates, beneficiaries can look forward to more predictable prescription drug costs and expanded savings. Sandiego urges everyone enrolled in Medicare — or those helping a loved one — to review their benefits during open enrollment and get familiar with upcoming changes. Staying proactive about your Medicare coverage ensures you take full advantage of new protections, price caps, and cost-saving opportunities arriving in 2026.
The key takeaways and summary were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.
Full Transcript:
[00:00:00] Starting January 1st, Medicare is implementing some of the biggest changes to its drug coverage in decades.
[00:00:06] Some costs are going up, but you could also save thousands in prescription drug costs.
[00:00:12] So let’s get this out of the way quickly. For 2026, Medicare costs are increasing because use of health care in Medicare is increasing.
[00:00:21] If you are covered by Part B, which generally covers outpatient services, and Part D, which handles prescription drugs, your premiums
[00:00:29] and deductibles are going up. Let’s start with Part B. The standard Medicare Part B premium will increase by
[00:00:37] about $21 to $206 and 50 cents per month. Meanwhile, the deductible will increase by $31 to $288.
[00:00:49] Now for Part D. The base beneficiary premium will increase by about $2 to roughly $39.
[00:00:57] However, individual plan premiums vary significantly, so be sure to check your specific plan's costs during open enrollment.
[00:01:06] The standard deductible is increasing by $25 to $615.
[00:01:12] If your plan has a deductible, you’ll pay the full cost of your prescriptions until you reach your deductible amount, and then your plan coverage will begin.
[00:01:22] In addition to the premiums and deductibles going up, the new cap on out-of-pocket prescription drug costs is going up from $2,000 to $2,100 a year.
[00:01:34] Here's how it works. Once you’ve spent $2,100 on covered Part D prescriptions, you won’t have to pay
[00:01:41] anything more for the rest of the year. No coinsurance, no copays. It's your limit on out-of-pocket spending, bringing some welcome relief.
[00:01:51] That last part is huge. In the old system, there was no cap, and now there is. And here's more good news.
[00:01:58] The first 10 Medicare negotiated drug prices take effect starting in January 2026, which will save some people thousands of dollars. Thanks
[00:02:08] to the 2022 prescription drug law, Medicare can now negotiate directly with drug companies to
[00:02:14] lower prices on some of the most popular and expensive medications. Medicare is already negotiating the prices of 15 more drugs, and new Medicare
[00:02:25] negotiated drug prices will become available every year going forward. Those negotiated drug prices will save Medicare and enrollees
[00:02:35] billions of dollars a year. Insulin was capped at $35 in 2023, and for 2026 you’ll pay 25% of the negotiated
[00:02:45] price or $35, whichever is cheaper. Whether you’re already enrolled or helping someone who is, now is the
[00:02:53] time to get familiar with what’s ahead. To learn more about this and other Medicare topics, visit
[00:02:58] aarp.org/medicare
