What Medicare prescription drug cost changes mean for beneficiaries

Medicare beneficiaries until December 7 To take advantage of the annual open enrollment period.

For retirees who depend on prescription drugs, now is a good time to consider next year’s cost of those treatments, experts say.

Medicare’s annual open enrollment allows beneficiaries to switch to private Medicare Advantage plans, which may include drug coverage, or, if they have original Medicare, to switch to Medicare Part D prescription plans, including Parts A and B for hospital and health insurance. Beneficiaries can also switch from Medicare Original to Medicare Advantage or vice versa.

Although selective opportunities to change Medicare coverage occur at other times of the year, this is the time when beneficiaries “have the most flexibility all year,” according to Ryan Ramsey, deputy director of the National Council on Aging, a national advocacy organization for older adults.

For example, during a separate Medicare Advantage open enrollment period that runs from January 1 to March 31, Medicare Advantage beneficiaries may choose to switch to another Advantage plan or original Medicare coverage. However, existing Medicare original beneficiaries with Part D prescription plans will not be eligible to change that drug coverage at that time, according to Ramsey.

About 55 million people are enrolled in stand-alone Medicare Part D prescription drug or Advantage plans, according to KFF, a nonpartisan health policy, research, survey and news organization.

Because prescriptions can represent a significant portion of retirees’ budgets, choosing the right coverage is important. 2024 AARP research 78% of adults age 65 and older described prescription drugs as “too expensive.”

Some changes in 2026 could help reduce prescription drug spending for Medicare beneficiaries.

Average prescription drug plan and Medicare Advantage plan premiums generally decline in 2026, which is a “nice change to see,” according to Ramsey.

“Generally, [Part D] “Premiums have not increased and may even be lower in some areas,” said Alex Cottrill, senior policy analyst with the Medicare policy program at KFF.

“Folks should not be wary of a major increase in costs,” Cottrill said. “But overall we are seeing the number of plan offerings decrease.”

Private Medicare Advantage plans, the vast majority of which offer prescription drug coverage, have not experienced such a large decline in available plan options, he said.

Of course, Medicare beneficiaries could face other rising costs in 2026. Standard Medicare Part B premiums, It rose 9.7% the next year, the second-highest increase in program history.

There will be a limit on out-of-pocket prescription drug expenditures in 2026 Rise to $2,100It was $2,000 in 2025. After beneficiaries pay a plan’s full deductible, they will owe 25% of the co-insurance cost until the $2,100 limit is reached. After that, the Medicare plan will pay 100% of prescription drug costs for the rest of the year.

This limit applies to beneficiaries with Medicare original or Medicare Advantage coverage, according to Cottrill. But that doesn’t apply to treatments that aren’t typically covered by Medicare Part D, such as Medicare Part B health insurance, he said. The out-of-pocket cover also only applies to prescription drugs covered by one plan.

In 2026, prices will go into effect for the top 10 prescription drugs, subject to cost negotiations between Medicare and pharmaceutical companies.

Cottrill said plans are needed to cover selected drugs; however, cost sharing will vary from plan to plan. “Comparison shopping is still important,” he said.

The Biden administration estimated the new prices would save beneficiaries $1.5 billion out of pocket in 2026. price reductions announced The new drug list, which includes Ozempic, will come into force in 2027.

In addition, State Health Insurance Assistance Programor SHIP can assist with a free consultation to compare plans and evaluate benefits and costs for 2026.

Retirees who need financial assistance may consider applying for government assistance Extra Help prescription cost assistance program or Medicare savings programs For help with premiums or other expenses.