Modern Estate Planning Blog

Takeaways

• Medicare is implementing changes in 2026 to lower prescription drug costs, enhance consumer protections, and test new care management approaches.
• New negotiated prices for some prescription drugs and an annual out-of-pocket cap of $2,100 for Part D covered medications will lead to lower drug costs for many enrollees.
• A new special enrollment period will protect beneficiaries who choose a Medicare Advantage plan based on inaccurate provider directory information.
• A prior authorization pilot program will be implemented in six states for certain services and equipment in traditional Medicare.
• Beneficiaries can opt to spread their prescription drug costs evenly over 12 months.

If you or a loved one rely on Medicare, big changes are coming in 2026 that could affect your prescription costs, coverage, and even how you choose your plan. At Chubb Law Firm PC in Folsom, we work with older adults and families throughout the Sacramento area to help them understand how legal and financial planning intersect with Medicare and long-term care decisions. Here’s a simple breakdown of what these updates mean for you and how to prepare.

Medicare is rolling out several important changes in 2026 that are intended to lower prescription drug costs, strengthen consumer protections, and test new ways of managing care. If you’re enrolled in Medicare, or will be soon, here’s what you need to know.

Lower Negotiated Prices for Some Prescription Drugs

Starting January 1, 2026, Medicare will begin using newly negotiated prices for a group of commonly used and expensive prescription drugs. These are the first medications selected under the Medicare Drug Price Negotiation Program.

What This Means for You

If you take one of these drugs, you may see lower costs at the pharmacy. Savings will vary depending on the medication and your Part D plan. Check with your plan or pharmacist in late 2025 to see whether any of your prescriptions are on the negotiated list.

Annual Cap on Prescription Drug Costs

In 2026, the most you will have to spend out of pocket on prescription drugs covered by Medicare Part D will be $2,100. Once you reach that amount, you won’t pay anything more for covered medications for the rest of the year.

Why This Matters

This cap on out-of-pocket costs for medications offers financial peace of mind for people with serious health conditions or expensive prescriptions. Many older adults will see significantly lower yearly drug costs compared with past years.

New Safety Net for Choosing a Medicare Advantage Plan

It’s not unusual for Medicare Advantage plan directories to list doctors or clinics incorrectly. To protect beneficiaries, Medicare is giving people who join a plan based on inaccurate provider directory information a special opportunity to switch plans.

How It Works

If you enroll in a Medicare Advantage plan and later discover that your doctor or hospital was incorrectly listed as in-network, you will have three months after your coverage begins to change plans.

Tip

When you choose a plan, take screenshots or print the provider information you relied on. That documentation may help you if you need to use the special extension period to switch plans.

Prior Authorization Pilot Program in Six States

Medicare is testing a new prior-authorization program in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. This pilot program will apply to certain services and equipment in traditional Medicare.

What This Means for You

If you live in one of the pilot states, you may need prior approval for certain procedures or medical equipment. The goal is to prevent unnecessary care, but some people worry it could lead to delays. If your doctor orders something that needs approval and it’s urgent, ask about expedited review options.

Option to Spread Drug Costs Throughout the Year

If your prescription costs usually pile up early in the year, you can ask your plan to spread your costs evenly over 12 months instead of paying large amounts at once. This, option, which has been in place as of 2025, is known as the Medicare Prescription Payment Plan. It seeks to help Medicare recipients enrolled in a prescription drug plan with budgeting and will continue in 2026.

For example, someone expecting to pay $2,400 in out-of-pocket prescription drug costs may opt into the plan and divide their total cost into payments of about $200 per month. To sign up for the payment plan, review your plan’s materials or call their customer service line to ensure this option is available and suitable for your situation. (Note that some plans will automatically reenroll you each year unless you opt out.)

What Older Adults Should Do

Here are some things older adults can do during the 2026 health care coverage enrollment period.

• Review your current list of medications and your current plan during open enrollment to make sure you’re getting the best prices.
• Ensure that your current health care provider and preferred pharmacy are still in-network, especially if you are enrolled in a Medicare Advantage plan. Keep documentation if you rely on Medicare’s plan directory when picking a plan.
• Ask your doctor’s office whether any of your services will require prior authorization in 2026, especially if you live in a pilot state.
• Consider using the monthly drug payment option if you expect high medication costs.
• Make sure your plan has your most up-to-date contact information on file. You don’t want to miss out on notices about network updates, renewals, or other changes to your plan.

In 2026, Medicare brings improvements for older adults, especially related to prescription drug affordability and protections for those enrolled in Medicare Advantage. Though the prior authorization pilot program may bring some extra steps for those in pilot states, the changes are aimed at making Medicare more reliable, transparent, and affordable.

Projected 2026 Costs (Subject to Final CMS Announcement)

Note that the Centers for Medicare & Medicaid Services (CMS) has not yet released the premium, co-pay, and deductible costs for Medicare in 2026. However, some of these costs are projected to increase, according to several sources. For example:

• The Medicare Part B monthly premium is projected to be $206.50 (up from $185 in 2025), and the annual deductible about $288 (versus $257 in 2025).
• The Medicare Part D plan deductible is expected to rise as well, to a maximum of about $615 (up from $595 in 2025).

Again, all official final figures have yet to be released by the CMS and are due to be confirmed later this year. Check back for updates.

These changes are designed to make Medicare more predictable, affordable, and accessible, but staying informed is key to making the right choices for yourself or a loved one. If you need help reviewing your plan, preparing for long-term care, or coordinating Medicare with your estate plan, our team at Chubb Law Firm PC is here to guide you. Call (916) 241-9661 to schedule your free Discovery Call.

Additional Reading

For additional reading on topics related to Medicare, check out the following articles:

• Medicare’s Extra Help Program for Prescription Drug Coverage
• Can People With Medicare Get Alcohol Counseling?
• Medicare Coverage Basics: What You Need to Know
• Can Oregon Launch a Universal Health Care System in the U.S.?

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