2026 Medicare Guide: Costs, Drug Prices & Part C Updates

Before you sign up – or renew – your health insurance, Medicare or Medicare Advantage plan, be aware of what’s coming in 2026 Multiple changes are coming to Medicare in 2026, and uncertainty hangs over the subsidized Covered California health exchange. So, it’s crucial to do some research and talk to your doctor and insurer during the current annual enrollment periods (through Dec. 7 for Medicare; until Jan. 31, 2026, for Covered California). Low-cost options are still available, and, for seniors, a Medicare Advantage plan (Part C) can help supplement your needs. Changes to Medicare for 2026 With significant changes to Medicare taking effect in 2026, don’t assume that your current plan’s benefits and costs will remain unchanged. It’s important to review your Medicare options thoroughly before shopping for coverage. Here are some updates to the program that should be considered. Medicare costs are set to rise for 2026, with both monthly premiums and annual deductibles projected to increase. The standard Medicare Part B premium is expected to rise by $21.50, or around 12%, to $206.50 next year. The annual Part B deductible for Part B is also projected to increase by 12% to $288. The out-of-pocket cap on Part D prescription plans is rising, from $2,000 to $2,100. Meanwhile, the swelling national deficit could also mean automatic cuts to Medicare. While privately-run Medicare Advantage plans remain an option to insulate older people from such shifts, there are changes coming to Part C, too. Beginning in 2026, supplemental Medicare Advantage benefits like transportation and meal delivery may be scaled back under new federal rules. Additionally, non-medical benefits and treatments including certain cosmetic procedures, funeral expenses and life insurance will no longer be allowed in 2026, according to the Centers for Medicare & Medicaid Services (CMS). Furthermore, alcohol, tobacco and cannabis products will no longer qualify as Special Supplemental Benefits for the Chronically Ill (SSBCI). But there’s some good news for Medicare enrollees, too. The cost of certain prescriptions will drop dramatically due to the Inflation Reduction Act, which allows the federal government to directly negotiate prices of expensive, single-source drugs with manufacturers. The drugs affected by this legislation must be covered by all Medicare Advantage prescription drug plans and stand-alone Part D plans. These include a 79% discount on Januvia anti-diabetic medication compared with its list price in 2023; Novolog/Fiasp insulin pens dropping from $495 to $119; and a 66% reduction in the price of Stelara, which is used to treat Crohn’s disease, plaque psoriasis, ulcerative colitis and psoriatic arthritis. Additionally, the monthly Medicare cap of $35 for covered insulin supplies will remain in place in 2026. And now everyone covered under Part D will automatically be enrolled in the Medicare Prescription Payment Plan (MPPP), which lets you spread drug costs across the year and can be especially reassuring for patients taking several medications and/or unusually costly drugs. Covered California in 2026 Covered California is striving to keep health care affordable for its nearly 2 million enrollees as the Enhanced Premium Tax Credits that contribute to its subsidies are set to expire at the end of this year. “Despite uncertainty in Washington, our mission remains the same,” said Covered California Executive Director Jessica Altman in an October press release. “To help Californians get comprehensive health insurance, including free preventative care, to keep themselves and their families healthy in 2026.” Covered California’s 2025 “Connectors to Coverage” campaign emphasizes the broad network of experts, enrollers and other guidance they offer to help consumers navigate their way to affordable health insurance – regardless of what happens on Capitol Hill, where the longest-ever government shutdown has heightened nervousness over the future of enhanced tax credits. Regardless, Covered California continues to maintain a robust marketplace while engaging in active negotiations with health insurers to ensure the best possible value for enrollees. These include Anthem Blue Cross, Blue Shield of California, and Kaiser Permanente. Earlier this year, the California Legislature increased funding to expand Covered California eligibility and state-funded tax credits for the lowest-income enrollees. What To Do Now More than ever, due diligence is crucial during open enrollment. Comprehensive coverage to fit your budget is still out there – it may just take a little more research and expert guidance to find your perfect health insurance fit. Call Covered California at (800) 300-1506 to be connected to a certified insurance agent or community-based organizations that offer free advice in multiple languages. And for the estimated 1.2-million uninsured Californians who qualify for either Covered California or low-cost/no-cost MediCal, now is the time to explore your options – you may be surprised at what you can afford!