2026 MARKET TRENDS

Medicare

Key Takeaways

Healthcare spending is increasing, and Medicare premiums, deductibles and benefits are shifting as a result
Medicare Advantage continues to offer competitive pricing compared to Original Medicare
Private carriers are reducing benefits, discontinuing plans, or leaving markets, affecting plan availability

Plan designs are tightening, supplemental benefits are declining, and coverage availability varies more by geography.

Overview

The Medicare landscape is changing in response to rising healthcare spending. Premiums are increasing, benefits are decreasing in some situations and carriers are offering fewer options in fewer markets. These changes affect how beneficiaries evaluate their Medicare options and manage their overall healthcare costs.

Customers now face a more restrictive Medicare environment. Plan designs are tightening, supplemental benefits are declining, and coverage availability varies more by geography. With these shifts, beneficiaries need clear guidance to compare costs, better understand their benefits and determine what coverage best fits their personal needs.

Rising Costs for Original Medicare

Original Medicare premiums and deductibles are increasing in 2026. These adjustments apply to both inpatient hospital coverage under Part A and outpatient care under Part B. Higher-income beneficiaries will also pay increased surcharges for Parts B and D.

Part B Premium: Standard monthly premium for Part B (covers doctor visits and outpatient care) is increasing to $202.90 from $185 in 2025
Part B Deductible: Annual Part B deductible will be $283, up from $257 in 2025
Part A Costs: Part A inpatient hospital deductible is rising to $1,736 per benefit period (up from $1,676)
Income-Related Monthly Adjustment Amounts (IRMAA): Higher-income beneficiaries will pay increased surcharges for both Part B and Part D coverage

These cost changes reflect overall healthcare spending trends and require beneficiaries to review their expected out-of-pocket costs for the upcoming year.

Medicare Advantage Remains Competitively Priced

While Original Medicare costs are increasing, Medicare Advantage plans continue to offer competitive pricing. Some costs are projected to decrease slightly in 2026, which may make Medicare Advantage appealing to beneficiaries seeking predictable premiums and integrated coverage.

Slightly lower average premiums: The average monthly premium for Medicare Advantage plans with drug coverage is projected to decrease slightly to about $11.50 (down from $13.32 in 2025)
Lower out-of-pocket cap: The maximum in-network out-of-pocket limit for Medicare Advantage plans will decrease slightly to $9,250 in 2026 (down from $9,350)

Average Medicare Advantage premiums with drug coverage are projected to decrease, and the maximum in-network out-of-pocket limit for Medicare Advantage will also decrease. These changes make Medicare Advantage an option for individuals aiming to lower monthly premiums and have greater cost control.

Evolving Part D Benefits and Pricing

Part D benefits continue to shift under the strategies outlined in the Inflation Reduction Act of 2022. These adjustments affect prescription drug costs, out-of-pocket limits and coverage for certain medications.

Prescription drug cap: The annual out-of-pocket spending cap for Part D enrollees is rising slightly, from $2,000 to $2,100
Negotiated drug prices: Lower, Medicare-negotiated prices for the first ten high-cost prescription drugs will become available, expected to save beneficiaries money on specific medications like Eliquis® and Januvia®
Insulin cost cap: The monthly cost-sharing for covered insulin products remains capped at $35

These updates help shape what beneficiaries will pay for medications in 2026 and can influence which plans best support their specific drug needs. Healthcare costs are rising, including employer-sponsored plans, and Medicare is no exception. It is important to consult with professionals to understand where benefits could be maximized.

Carriers Reduce Medicare Advantage, Supplement and Part D Plans

Pricing pressures are prompting private insurance companies to scale back benefits or exit markets.

UnitedHealthcare is exiting 109 counties across 16 states (180,000 enrollees)
Humana is exiting two states and 194 counties (500,000 enrollees)
Aetna is discontinuing nearly 90 Medicare Advantage plans across 34 states and reducing its standalone Prescription Drug Plan footprint

These decisions affect a significant number of beneficiaries and limit plan choice nationwide.

Plan availability: The overall number of general enrollment Medicare Advantage plans nationwide is declining by nearly 10%. This means some beneficiaries will have fewer plan choices, or their specific plan may be discontinued entirely.
Supplemental benefits: On average, the generosity of benefits such as dental, vision and over-the-counter allowances is decreasing. The average dental allowance is declining by about 10%.

Section Source: All values attributable to Centers for Medicare & Medicaid Services (CMS), 2025

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