Medicare Advantage and Part D Premiums Expected to Remain Stable in 2026
The Centers for Medicare and Medicaid Services (CMS) has announced that premiums, benefits, and plan choices for Medicare Advantage (MA) and Medicare Part D prescription drug programs are expected to remain stable in 2026. Projections indicate that average premiums for both programs will decline from 2025 into next year.
This update comes ahead of the annual Medicare Open Enrollment period, which is scheduled from October 15, 2025, to December 7, 2025. During this time, millions of Americans using Medicare will have the opportunity to switch or adjust their health insurance plans for the 2026 plan year.
Why It Matters
Medicare’s stability and affordability directly affect more than 65 million Americans, especially older adults and those with disabilities. MA and Part D are private plan alternatives to Original Medicare: MA bundles hospital, medical, and often drug coverage, while Part D covers prescription drugs separately. In 2025, nearly half of all Medicare enrollees chose MA, highlighting its importance.
As prescription drug costs remain a significant concern for retirees on fixed incomes, Part D also plays a key role in protecting against high drug expenses. With projected premium declines, the update suggests that those opting for MA or Part D plans will be protected from the surges in premiums seen elsewhere in the health insurance industry.
What To Know
CMS projected average monthly MA premiums will decrease from $16.40 in 2025 to $14 in 2026. For standalone Part D prescription drug plans, the average total premium is expected to fall from $38.31 to $34.50. The average total premium for Part D coverage bundled in MA plans should decrease to $11.50.
Plan access for beneficiaries also remains high, with more than 99 percent having access to at least one MA plan and 97 percent to 10 or more options. The number of available MA plans will decline slightly, CMS said, going from 5,633 in 2025 to about 5,600 in 2026. However, the agency suggested the projected enrollment decline in MA, from 34.9 million to 34 million, may not materialize, citing past trends of more robust participant numbers.
As medication costs continue to rise, CMS emphasized its effort to prevent significant spikes in premiums by negotiating with plan sponsors and using statutory authority to deny any with excessive increases or reductions in benefits.
The annual out-of-pocket maximum for Part D is however set to rise to $2,100, up from $2,000 in 2025, according to medicareresources.org.
These updates come ahead of the Medicare Open Enrollment period, which provides an annual opportunity for beneficiaries to review their coverage. The Medicare.gov Plan Finder provides clear, easy-to-use information for people to compare plans and find the best option for their needs, while highlighting key changes in health and drug coverage that can vary year to year.
Low-income seniors and people with disabilities may also qualify for the Medicare Savings Programs, which help cover premiums and other health costs.
Expert Perspectives
The reason MA and Part D plans are not following other health insurance plans as their premium costs soar next year, is that “the prices Medicare pays to providers of medical services are administered, for example, set by the government, whereas the prices that employers, or commercial insurers, pay are negotiated with hospitals, health systems, and medical groups that have amassed increasing market power,” Dr. J. Michael McWilliams, a professor of health care policy and medicine at Harvard Medical School, explained.
“So prices in Medicare have been pretty flat over the last decade while those in commercial insurance markets have risen rapidly,” he added. Premiums are also lower for MA plans because they are heavily subsidized, he added. “Not only is Medicare a publicly financed insurance program, but Medicare payments to MA plans have become very generous due to unintended subsidies.”
However, it’s important to note, not all Medicare plans are the same in this sense—while premiums for MA policies are not going up, premiums for Part B of Medicare have been going up, McWilliams said.
What People Are Saying
CMS Administrator Dr. Mehmet Oz said in a statement: “Millions of Medicare beneficiaries will continue to have access to a broad range of affordable coverage options in 2026. We want every beneficiary to take advantage of Open Enrollment—compare your options and choose the plan that gives you the right care at the best price.”
Dr. J. Michael McWilliams, a professor of health care policy and medicine at Harvard Medical School, told truewealthjourney.com: “The most important thing for Medicare beneficiaries to do is comparison shop and seek assistance to understand their options. The complexity of the decision makes it easy for beneficiaries to make mistakes, and it is well-described that beneficiaries often stay in the same plan despite there being better options available.”
He added: “It is also very important for beneficiaries to be fully informed about the consequences of choosing Medicare Advantage over traditional Medicare. While MA clearly offers a better deal in many ways (premiums are much lower), risk rating of supplemental Medigap plans in most states can make switching back to traditional Medicare very expensive for beneficiaries with chronic conditions. This has been referred to as the Medicare Advantage ‘trap.'”
Jonathan Gruber, a professor of economics at Massachusetts Institute of Technology, told truewealthjourney.com: “The drop in MA is not necessarily a bad thing. The idea of MA is to save the Medicare program money by managing care. But in fact we pay MA plans more than we would pay for the equivalent person being enrolled in traditional Medicare. In return, enrollees get extra benefits. But for many enrollees these extra benefits are not so valuable, so we shouldn’t be paying extra to have them in MA plans.”
Mark Pauly, a professor of health care management at Wharton School of the University of Pennsylvania, told truewealthjourney.com: “MA premiums fell in 2025 and that decline is expected to continue in 2026 though be smaller. This follows a period of rapid enrollment growth which has reduced administrative and marketing costs by spreading them over more people and a period of strong bargaining by MA plans with hospitals where they can always threaten to pay the low price that Original Medicare pays. MA plans expect to dodge the fairly substantial increase in outpatient claims that we are seeing in private insurance and in Original Medicare; we will see if they succeed.”
What Happens Next
Medicare Open Enrollment for 2026 runs from October 15 to December 7, 2025. During this window, beneficiaries can review and change plans using the Medicare.gov tools.
Update 9/29/25, 10:51 a.m. ET: This article was updated with comment from McWilliams and Gruber.
Update 9/29/25, 12:46 p.m. ET: This article was updated with comment from Pauly.
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