Why 2026 Is an Important Year to Review Your Coverage
Every year brings changes to Medicare premiums, deductibles, and program rules, and 2026 is no exception. For beneficiaries approaching 65 and those already enrolled, understanding what is changing helps you make more informed decisions during the Annual Enrollment Period (AEP) that runs October 15 through December 7, 2025, for 2026 coverage. Changes to premiums, the Part D out-of-pocket cap, Medicare Advantage benchmark rates, and prior authorization rules all have direct implications for how you should evaluate your current plan and any alternatives.
Part B Premium and Deductible Updates
The Medicare Part B premium typically adjusts each year based on projected healthcare cost growth and a statutory formula. Beneficiaries should review their monthly Part B premium statement from Social Security each fall to confirm the new amount. The standard Part B deductible (the amount you pay before Medicare begins covering 80% of outpatient services) also adjusts annually. Even modest year-over-year premium increases accumulate meaningfully over the course of a retirement, which is one reason annual review matters. If your income is above the IRMAA threshold ($106,000 for individuals, $212,000 for joint filers based on income from two years prior), your Part B and Part D premiums include additional income-related surcharges that also adjust annually.
Part A Deductible Update
The Medicare Part A inpatient hospital deductible, which applies per benefit period (not per calendar year), also adjusts each year. The deductible was $1,676 per benefit period in 2025. Beneficiaries with a Medicare Supplement Plan G pay none of this deductible, as Plan G covers the Part A deductible in full. Beneficiaries on Medicare Advantage plans pay cost-sharing per their plan terms rather than the standard Part A deductible structure.
Part D: The $2,000 Out-of-Pocket Cap Continues
One of the most significant recent changes to Medicare drug coverage was the $2,000 annual out-of-pocket cap for Part D, which became effective in 2025 under the Inflation Reduction Act. Before this cap existed, beneficiaries with high drug costs could face several thousand dollars in out-of-pocket drug expenses annually before catastrophic coverage kicked in. The $2,000 cap means that once you have spent $2,000 on covered Part D drugs in a calendar year, the plan covers 100% of remaining covered drug costs for the rest of the year.
For 2026, this cap continues and may see further refinements. Beneficiaries on high-cost specialty medications should factor this cap heavily into their plan comparison during AEP. A plan with a higher premium but better specialty drug tier placement may still result in lower total annual costs once the $2,000 cap threshold is considered. Use the Medicare Plan Finder to calculate total estimated annual drug costs (premium plus cost-sharing) for your specific medication list, not just the monthly premium alone.
CMS Tightening Medicare Advantage Prior Authorization Rules
CMS has been actively implementing regulations to address improper and excessive use of prior authorization by Medicare Advantage plans. Rules that took effect in 2024 and that continue to be refined require Medicare Advantage plans to use Original Medicare coverage criteria as the minimum standard for PA decisions. This means a plan cannot deny a PA for a service that Original Medicare would cover based on medical necessity. Plans must also make their prior authorization criteria publicly available and are subject to new transparency reporting requirements.
For 2026, these rules are expected to continue strengthening beneficiary protections against inappropriate PA denials. If you have experienced PA denials for services that your physician determined were medically necessary, the regulatory environment is becoming more favorable for appeals and for holding plans accountable to coverage standards.
Medicare Advantage Benchmark Rate Changes
CMS annually adjusts the benchmark rates it pays Medicare Advantage plans per enrolled beneficiary. These rate adjustments affect what plans can offer in terms of supplemental benefits (dental, vision, hearing, transportation), premium levels, and cost-sharing structures. When benchmarks are adjusted downward, some plans reduce supplemental benefits, increase premiums, or narrow their networks to maintain financial viability. This is a key reason why plans that offered robust benefits in prior years may reduce those benefits for the coming year. Always review your ANOC carefully in September and compare plans during AEP rather than assuming your current plan remains the best option.
What to Do Before December 7, 2025
- Read your ANOC when it arrives in September 2025. Look for premium increases, formulary changes to your medications, and benefit reductions.
- Use Medicare.gov Plan Finder during AEP to compare all available plans in your ZIP code with your actual medication list entered.
- Verify that your primary care physician and key specialists remain in-network for your current plan, and check their network status in any plans you are considering switching to.
- If you have a Medicare Supplement (Medigap) plan, your Plan G benefits are standardized and do not change. However, your insurer's premium may change, and shopping other carriers for the same plan at a lower premium is always worth doing.
- Schedule a no-cost Medicare review with Insurance Innovators LLC before the December 7 deadline.
Insurance Innovators LLC helps clients navigate Medicare changes every year. Whether you are new to Medicare in 2026 or have been enrolled for years and want to make sure you are on the best available plan, call us at (530) 395-5309. Annual review is one of the simplest, most cost-effective things you can do for your healthcare budget.