2026 Medicare Updates: Higher Costs, Fewer Choices, Big Decisions
Open Enrollment for 2026 Medicare coverage is shaping up to be one of the most important in years. Shorter benefits, higher out-of-pocket exposure, and fewer plan choices mean that even if you like your current plan, you may not want to simply auto-renew. Several rule changes and market shifts could affect your premiums, drug costs, and provider access.
Why Are Medicare Plans Changing?
Federal payments to Medicare Advantage (MA) plans are projected to rise by an average of 5.06% in 2026, slightly higher than the earlier proposed increase. However, that boost comes with technical adjustments and continued regulatory scrutiny. Insurers are generally responding by redesigning benefits, narrowing networks, and revising product lineups after a period of higher medical spending. These changes aim to protect profitability but may leave enrollees with fewer options and higher costs.
How are Medicare Plans Different in 2026?
One of the most significant changes appears to be an increase in out-of-pocket exposure for many Medicare Advantage plans. The maximum out-of-pocket (MOOP) limit, the most you could pay in a year for covered services, is climbing. In fact, the median MOOP is expected to rise from $5,400 in 2025 to $5,900 in 2026. This means that a serious illness or hospitalization could cost you more than before. Review your Annual Notice of Change carefully and compare alternatives using Medicare’s Plan Finder.
Plan choices are also shrinking. The average number of Medicare Advantage plans with drug coverage available to each beneficiary is projected to drop to 32 in 2026, down from 34 in 2025. Stand-alone Part D drug plans are consolidating even more dramatically, falling to 360 nationwide from 464 this year and 709 in 2024. If your plan is being discontinued, do not assume another plan from the same insurer will offer the same benefits, consider reviewing multiple options.
How is Medicare Prescription Drug Coverage Evolving?
Prescription drug coverage is also evolving. The Inflation Reduction Act continues to reshape Part D benefits. The annual out-of-pocket cap for prescription drugs is set to rise to $2,100 in 2026, up from $2,000 in 2025, and the standard deductible will increase to $615. For the first time, Medicare plans to implement negotiated prices for a group of high-cost drugs starting January 1, 2026. Running your medication list through the Medicare Plan Finder tool can help you compare costs across plans.
What Is Happening to Medicare Provider Networks in 2026?
Provider networks remain another area of concern. Hospitals and physician groups continue to move in and out of Medicare Advantage networks, and inaccurate directories have long created confusion. To address this, Centers for Medicare and Medicaid Services (CMS) will begin adding provider directory data to the Medicare Plan Finder for 2026. Even so, confirm directly with your doctors and hospitals before enrolling to avoid surprises.
Were Supplemental Benefits Revised?
Finally, supplemental benefits including grocery allowances, transportation, and fitness perks, are also being reevaluated. Plans must now justify these extras with a health-related purpose, and some insurers may scale back popular perks as they rebalance costs. If these benefits matter to you, check your plan documents for 2026 rather than assuming they will remain unchanged.
How Can I Protect Myself During Medicare Open Enrollment?
Start by reading your Annual Notice of Change. Pay attention to premiums, MOOP, hospital and specialist copays, and drug tier adjustments. Then, verify that your preferred doctors and hospitals remain in-network, using both the Plan Finder and direct confirmation with providers. Re-check your prescriptions through the Medicare tool to account for changes in formularies and cost-sharing structures.
When comparing plans, look beyond the premium and consider the total financial risk, especially in a high-cost year. If broad provider access is a priority, you might explore Original Medicare with a Medigap policy, but be mindful of enrollment timing and underwriting rules.
The Bottom Line
Medicare in 2026 brings higher costs, fewer choices, and more complexity. Taking time to review your options during Open Enrollment (October 15 through December 7) may help you reduce unexpected costs and ensure your coverage remains aligned with your health and financial goals.
Source: WSJ.com
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