Newsletter

MEDICARE CHANGES EXPECTED IN 2026

This article appeared in a recent issue of Retirement Daily:

Medicare beneficiaries will see several key changes in 2026 as the Centers for Medicare and Medicaid Services (CMS) continues to implement Inflation Reduction Act (IRA) provisions and adjusts various program parameters.



Among the most significant changes, according to Marcia Mantell, the president of Mantell Retirement Consulting, the annual out-of-pocket threshold for Part D prescription drugs will increase to $2,100 in 2026, up from the $2,000 cap implemented in 2025. Read https://www.cms.gov/newsroom/fact-sheets/final-cy-2026-part-d-redesign-program-instructions. This adjustment follows the IRA's provision to index the cap for covered prescriptions based on inflation rates, she noted.

In addition, Mantell said the Part D annual deductible will jump 4.2% from $590 in 2025 to $615 in 2026, continuing an upward trend from $545 in 2024.

Other anticipated changes include continued implementation of Part D drug benefit reforms, annual increases to Medicare Advantage payment rates, and potential adjustments to risk assessment models.

CMS is also proposing strengthened protections for beneficiaries, particularly in areas of behavioral health coverage and regulation governing artificial intelligence use in insurance practices.

TRUMP AIMS TO REDUCE DRUG PRICES WITH “MOST-FAVORED NATION” POLICY

This fact sheet was published by the White House on May 12, 2025:



REDUCING DRUG PRICES FOR AMERICANS AND TAXPAYERS: Today, President Donald J. Trump signed an Executive Order to bring the prices Americans and taxpayers pay for prescription drugs in line with those paid by similar nations.

• The Order directs the U.S. Trade Representative and Secretary of Commerce to take action to ensure foreign countries are not engaged in practices that purposefully and unfairly undercut market prices and drive price hikes in the United States.

• The Order instructs the Administration to communicate price targets to pharmaceutical manufacturers to establish that America, the largest purchaser and funder of prescription drugs in the world, gets the best deal.

• The Secretary of Health and Human Services will establish a mechanism through which American patients can buy their drugs directly from manufacturers who sell to Americans at a “Most-Favored-Nation” price, bypassing middlemen.

• If drug manufacturers fail to offer most-favored-nation pricing, the Order directs the Secretary of Health and Human Services to: (1) propose rules that impose most-favored-nation pricing; and (2) take other aggressive measures to significantly reduce the cost of prescription drugs to the American consumer and end anticompetitive practices.

GETTING A BETTER DEAL FOR AMERICANS: President Trump is once again taking action to keep pharmaceutical manufacturers from charging Americans high drug prices while giving steep discounts to other wealthy nations.

• According to recent data, the prices Americans pay for brand-name drugs are more than three times the price other OECD nations pay, even after accounting for discounts manufacturers provide in the U.S.

• The United States has less than five percent of the world’s population, yet funds roughly 75% of global pharmaceutical profits.

• Drug manufacturers discount their products to gain access to foreign markets and then subsidize those discounts through high prices charged in America—in essence, Americans are subsidizing drug-manufacturer profits and foreign health systems, despite drug manufacturers benefiting from generous research subsidies and enormous healthcare spending by the U.S. Government.

• In his first term, President Trump took historic action to keep Medicare and seniors from paying more for drugs than economically comparable countries, which the Biden Administration rescinded before it could take effect.

• Instead of fixing this problem, the Biden Administration’s greatest achievement was to negotiate prices that were, on average, 78 percent higher than in 11 comparable countries as part of Biden’s effort to “beat Medicare.”

DELIVERING ON PROMISES TO PUT AMERICAN PATIENTS FIRST: President Trump is delivering on his promise to once again put America first by furthering efforts to get American patients and taxpayers a fair deal for prescription drugs.

• This Order builds on actions from President Trump’s first term to make progress on reducing price disparities at home and expands those efforts by including Medicaid in addition to Medicare. 

• President Trump recently signed an Executive Order to take additional action to lower drug prices, including by providing massive discounts to low-income patients for lifesaving medicines, facilitating importation programs, and increasing the availability of generic and biosimilar medicines.

• President Trump is also working to make drug prices radically transparent, as he recently signed an Executive Order to build on his historic price transparency efforts undertaken during his first term.

• President Trump has been relentless in his effort to address the unfair and outrageous prices Americans pay for prescription drugs:

• President Trump: “In case after case, our citizens pay massively higher prices than other nations pay for the same exact pill, from the same factory, effectively subsidizing socialism abroad with skyrocketing prices at home. So, we would spend tremendous amounts of money in order to provide inexpensive drugs to another country. And when I say the price is different, you can see some examples where the price is beyond anything — four times, five times different.”

MEDICARE ADVANTAGE PLANS 2026: WHAT MEDICARE BENEFICIARIES NEED TO KNOW

Guy Shapira, Senior Reporter and Medicare Advantage Plans Expert, has prepared a Retiree And Senior Guide to Medicare Advantage Plans For 2026: What Retirees Must Know, Tips, Insights and Changes.

This Guide appears in Seniors Reports Daily and compares 2025 plans with projections of what he thinks 2026 plans will look like. Read this article to obtain expert insights, a detailed comparison chart, and actionable advice for seniors and families navigating 2026 plans, stability, costs, and benefits.

HOW THE HOUSE BUDGET BILL (REFERRED TO AS TRUMP’S “ONE BIG BEAUTIFUL BILL OF 2025”) WOULD AFFECT MEDICARE SPENDING

The House of Representatives, by a vote of 215-214, passed the congressional budget Bill, now renamed the One Big Beautiful Bill of 2025, early in the morning of May 22, and the Bill has been sent to the Senate, which is in recess until June 2.

This article, written by Michael McAuliff for Modern Healthcare on May 22, details all the changes in the Bill that pertain to healthcare. The most significant changes are related to Medicaid and food stamps, but there are some changes to Medicare and the Affordable Care Act. Here are the changes to Medicare that are included in the Bill:

Increases Medicare physician reimbursements 2% in 2026 and pegs future payment updates to the Medicare Economic Index. In addition, this provision would eliminate extra payments to physicians participating in alternative payment models.

Triggers Medicare cuts under the Statutory Pay‑As‑You‑Go Act of 2010 (“PAYGO”). Because the bill would increase the budget deficit by $2.3 trillion, the Congressional Budget Office (CBO) projects the Administration would have to curtail Medicare spending by $45 billion in 2026 and $490 billion from 2027 to 2034.  This represents a reduction of approximately 4% in Medicare spending. The aim of Statutory PAYGO is to enforce budget discipline, but the automatic spending cuts have never taken effect. Congress has consistently prevented these cuts by either excluding their impact during the initial legislation or by later delaying or eliminating them. See this article from Kiplingers that explains how the mandatory PAYGO reductions (referred to as sequestration) would work. The potential effect of PAYGO on Medicare as this bill is presently written has not been widely reported. Congress has consistently prevented PAYGO cuts by either excluding their impact during the initial legislation or by later delaying or eliminating them. Nothing is presently in the House bill to exclude PAYGO reductions, and rules require a 60% vote in the Senate to exclude them. Since ALL Senate Democrats are expected to vote against the bill in its present form and Republicans do not control 60% of the Senate, this gives the Democrats great leverage in forcing changes to the bill or even to prevent the bill from passing. President Trump has consistently said there will be no cuts to Medicare.

Suspends a rule to facilitate enrollment in Medicare Savings Programs that cater to low-income people eligible for Medicare and Medicaid by pushing back the effective date to 2035. Savings are estimated to be $84 billion.

Expands rural emergency hospitals program. The CBO has made no cost estimate for this part of the bill.

Ends Medicare eligibility for some lawfully present foreign nationals who currently qualify by limiting the program to permanent residents who are green card holders, from Micronesia, the Marshall Islands or Palau, or, in certain cases, from Cuba. This would save $132 million.

About Paul Cholak

Paul is a licensed, independent health and life insurance agent and has over forty years of benefits experience and specializes in helping Medicare beneficiaries obtain health insurance. However, he offers a complete array of life and health insurance products to individuals of all ages.

He guides Medicare beneficiaries through the steps of getting insurance and is available to help clients both BEFORE and AFTER they've made their purchase decision.

Disclaimer for Part C and D plans: "We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE (TTY: 1-877-2048) to get information on all your options."

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