Medicare Part D helps over 53 million Americans get the prescription medication they need at more affordable prices. In the past, enrollees faced high out-of-pocket costs from deductibles, co-pays, the “donut hole” coverage gap, and unlimited catastrophic costs. However, for 2026, there are some changes to Prescription Drug Coverage that will affect those who rely on Medicare Part D. Here’s what you need to know.
Improvements Over Time
The “Donut Hole” is the gap in Medicare Part D coverage. And over the years, changes to prescription drug coverage through the Affordable Care Act (ACA) has aimed to reduce costs and eliminate gaps in Part D, finalizing its multi-year plan in 2025. Now, there are fewer gaps in Part D coverage, helping members save money on the prescription medication they need. The Inflation Reduction Act (IRA) has also added a $2,000 annual cap on out-of-pocket costs that started in 2025.
Starting in 2026, the Centers for Medicare & Medicaid Services (CMS) will also begin negotiating drug prices to further reduce costs. Together, this will mean that Part D members will be able to enjoy lower out-of-pocket costs for their prescriptions.
New Challenges
Of course, everything comes with side effects. And while the changes to prescription drug coverage is generally positive, there are a few new challenges that will emerge because of the updates.
The main challenge is that insurance plans are starting to shift more cost to members before the $2,000 cap. This could include higher deductibles and more coinsurance, which is a percentage of the drug’s price rather than a flat copay.
This cost shift will affect those with moderate prescription needs the most because they don’t typically reach the cap.
Low-Income Subsidy enrollees may not see these increases.
Looking Ahead
The goal of CMS is to protect enrollees from high drug costs, not shift them into higher premiums or hidden fees. CMS must ensure that drugmakers, plans, and pharmacy benefit managers don’t push costs unfairly onto beneficiaries. But ultimately, the future of Part D premiums is uncertain and will depend greatly on federal policy decisions.
During these ongoing changes to prescription drug coverage, it’s important to stay informed and keep up with the latest news to protect yourself and your family from unnecessary costs.
The Importance of Choosing the Right Plan Amid Changes to Prescription Drug Coverage
With all the changes to prescription drug coverage coming in 2026, it’s now more important than ever to choose the right plan for your unique needs. Costs and coverage between standalone Part D plans (PDPs) and Medicare Advantage Plans with drug coverage (MA-PDs) vary drastically. And what might work for one person, isn’t a great fit for someone else. For example, PDPs typically face more pricing and availability instability, especially for those in rural areas where the choices are limited.
That’s why it’s crucial to carefully review your options during Fall Open Enrollment, which lasts between November 1 and January 15. It’s the only way to avoid higher costs.
If you or someone you know needs some guidance through these changes to prescription drug coverage, contact us at Health Benefits Associates. Our experienced agents can walk you through the options to help you choose the right plan for your unique needs. Call us today at 775-828-1216 to schedule an appointment.