3 things for consumers to know as Medicare annual open enrollment begins

Medicare’s annual open enrollment began this week with millions of beneficiaries weighing their coverage options for 2026.

Louise Norris, a health policy analyst with healthinsurance.org and medicareresources.org, gave a list of issues consumers should consider when looking at coverage for next year.

1. Part D out-of-pocket cap increases

The annual cap on a beneficiary’s prescription drug out-of-pocket costs will increase from $2,000 in 2025 to $2,100 in 2026, indexed for inflation.

Most beneficiaries typically don’t reach the cap but more Medicare Advantage members will see plans with drug deductibles, at least on certain tiers.

Many Medicare Advantage plans previously didn’t require a drug deductible. But starting in 2026, most MA plans will have a deductible for drugs in Tiers 3, 4 and 5.

Also in 2026, the maximum Part D deductible rises to $615 (up from $590), although some plans offer lower or no deductibles. The $35 insulin cap on out-of-pocket costs and no-cost coverage of recommended vaccines continue.

People with Medicare Part D will continue to have the option to have their drug costs spread out over the full year in equal monthly payments, instead of having to meet their out-of-pocket limit early in the year

2. Some MA or prescription drug plans discontinued

In addition to rising drug costs, some beneficiaries may find fewer Medicare Advantage or prescription drug plan options for 2026. Several insurers, including Elevance, Aetna and UnitedHealthcare, are scaling back their MA or PDP offerings or exiting certain markets altogether. If an MA or PDP plan is discontinued, beneficiaries can select new coverage during Medicare open enrollment.

“It comes down to a financial decision on the part of the insurance company,” Norris said of discontinued plans. “If they feel like they're not making enough money from a particular product, they'll discontinue it. When insurance companies believe they can make money in those segments, they will continue to offer the plans, and if not, they won't. Maybe some plans are a little less profitable than they were, say, 5-10 years ago.

Norris said the MA market “has been booming for well over a decade, with strong year over year enrollment growth.” She said insurers are projecting a possible slight reduction in the number of MA enrollees as growth begins to stabilize.

Those whose MA plans are eliminated may also qualify for a special enrollment period, providing guaranteed-issue rights to enroll in most available Medigap plans, if they want to switch to Original Medicare.

3. Negotiated drug prices start in 2026

The Inflation Reduction Act allows the Centers for Medicare & Medicaid Services to negotiate with drug manufacturers on the prices of certain high-cost prescription drugs. The first round of negotiated prices will take effect in January 2026.

While negotiated prices may help consumers long-term, premiums may still rise. That’s because insurers will receive less federal assistance through the Part D premium stabilization program – dropping from $15 to $10 per enrollee per month – and participating insurers will be allowed to raise premiums by up to $50 per month (up from $35 per month this year).

“While negotiated prices should help in the long term, beneficiaries may still see premium increases,” Norris said.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].