2026 Updates for Medicare Beneficiaries

Key changes for Medicare beneficiaries taking effect in 2026

And what you can do to prepare

Medicare is constantly evolving, and 2026 is no different. Here are the key changes that are already slated to take place. As new guidelines and policies are released, we’ll make sure to update this list.

In this article

1 Key Highlights for 2026
2 Impact of the One Big Beautiful Bill Act
3 Medicare Prior Authorization Pilot Program
4 Changes to Medicare Advantage and Supplemental Benefits
5 Part B cost increase
6 What should you be doing now?
7 Takeaways

Key Highlights for 2026

Medicare funding will see a 4% reduction start in 2026

A reduction in Federal funding may lead to decreased access to providers and services. Additionally, with Medicare paying less, the burden will fall on insurance companies to cover the excess cost. This will be passed on to the beneficiary through increased premiums, copays, and deductibles. Expect to pay more.

Part D out-of-pocket cap will rise to $2,100

This is a $100 increase from 2025, offering continued protection agist catastrophic prescription expenses. This means that you will be liable for an additional $100 in drug cost over the year in 2026.

Eligibility restrictions

The new eligibility requirements eliminate lawfully present immigrants who are living in the US, regardless of how long they have worked or paid into the system, including:

Refugees and people granted asylum
People with Temporary Protected Status
Survivors of human trafficking
Survivors of domestic violence, and,
Individuals granted humanitarian parole.

Impact of the One Big Beautiful Bill Act

The ‘One Big Beautiful Bill’ (OBBBA), signed into law by President Trump in July 2025, brings sweeping changes to federal healthcare programs. It represents a fundamental shift in federal health care policy, with implications extending far beyond immediate budgetary concerns. The legislation’s impact on Medicare beneficiaries reflects broader questions about health care access, equity, and the government’s role in ensuring coverage for vulnerable populations. As implementation proceeds, the full scope of these changes will become increasingly apparent across the American health care system.

For Medicare beneficiaries, the significant points include:

Budget cuts

The bill’s structure includes automatic federal budget rules that cut 4% out of Medicare funding. While this does not affect eligibility for Medicare, there are several potential consequences to be aware of.

Reduced access to providers: Providers have to actively accept Medicare’s payment structure if they want to accept Medicare beneficiaries. The lowered reimbursement rates are worried to cause some providers not to accept Medicare patients. This will directly affect options for care.
Increased out-of-pocket cost: The providers that do accept the new reimbursement rates will be receiving less. These excess cost will be passed on to insurance companies, who will pass the cost on to beneficiaries. Plan premiums, deductibles, and cost sharing are all expected to go up.
Limitation on certain services: Due to the decreased funding, there is concern that some previously covered services may be reduced or restricted, affecting overall access to healthcare.

Blocked improvements to Medicare Savings Programs

The law imposes a nine-year ban on implementing improvements to Medicare Savings Programs (MSPs), which help lower-income Medicare beneficiaries pay for premiums and out-of-pocket costs. The Congressional Budget Office estimates this will save over $66 billion over 10 years. But these “savings” come from preventing eligible beneficiaries from accessing programs designed to make Medicare more affordable.

Blocking nursing home staffing standards

The legislation blocks the implementation of national minimum staffing requirements for nursing homes that were designed to improve quality of care. Interestingly, while federal courts have already struck down portions of these standards, the Trump Administration continues to defend the staffing rule in court as of July 2025.

Prescription drug reform

The 2022 Inflation Reduction Act gave Medicare the power to negotiate prices for certain high-cost medications, with the first negotiated prices taking effect in 2026. The OBBB carves out “orphan drugs” (medications for rare diseases) from this negotiation process, limiting Medicare’s ability to control costs for some of the most expensive medications.

Beginning in 2026, if you participate in the Medicare Prescription Payment Plan, you will automatically be re-enrolled unless you actively opt-out of the program.

The annual deductible for Part D plans is increasing by $25 over the 2025 of $590. Plan participants will now need to cover the first $615 of covered medications.

Some dual-eligible enrollees will lose access to Medicare and Medicaid

The OBBBA exempts seniors over 65 from work requirements to be eligible for Medicaid, but you still need to follow the new enrollment and eligibility verification rules. The administrative burden of meeting these requirements every six months could prove too much for some people, especially those with disabilities. That could cost them their Medicaid coverage, even though they’re eligible for it.

Medicaid covers a range of services that Medicare does not, such as long term care, home services, dental, vision, and hearing care. If you lose your Medicaid, you lose access to these critical benefits.

The OBBBA also delayed the implementation of a Biden administration rule aimed at reducing barriers to enrollment in the Medicare Savings Programs (MSPs), which allow Medicaid to cover Medicare premiums and other out-of-pocket expenses for low-income individuals.

So, even if you are able to keep your Medicaid plan, if you’re not able to enroll in the MSP and receive the subsidies, you could find you’re not able to afford Medicare.

Medicare Prior Authorization Pilot Program

Alongside legislative changes, Medicare is piloting a new prior authorization program in 2026. This initiative, called the Wasteful and Inappropriate Service Reduction (MISeR) Model, will be rolled out in six states- Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington.

The goal of this program is to test prior authorization requirements for certain services provided to patients with traditional Medicare. CMS will contract with private insurance companies to process these prior authorization request who will, in turn, use AI and other technology to assist in the decision making.

For beneficiaries, this means more paperwork and delays. People should anticipate longer wait times for non-emergency surgeries, imaging, or specialty referrals. Additionally, one of the key arguments in choosing Traditional Medicare is the absence of prior-authorization; knowing that your care will be determined by doctors and not insurance companies. This program shifts that dynamic.

Changes to Medicare Advantage and Supplemental Benefits

Start in 2026, Medicare Advantage plans are being given guardrails on what they can offer under secondary benefits. That list can be viewed here. These are all non-medical benefits that aim to contribute to the well-being of people with certain conditions.

These new provisions continue a trend that has seen private insurers pare back MA plan supplemental benefits, including OTC medications, transportation services, nutritional services, and meals.

Part B cost increase

Premiums for Medicare Part B are projected to rise 11.6%, from $185 to $206.50 per month. Part B’s deductible is expected to rise by 12% from $257 to $288.

What should you be doing now?

Review your coverage

Given the sweeping changes, it’s crucial to verify your continued eligibility and assess whether your current plan still meets your needs.

Prepare for higher cost

Budget for increased premiums and deductibles across Medicare parts. The projected Social Security COLA increase of about $54 monthly should cover most of the Part B premium increase, but you’ll still see net increases in healthcare costs.

Do not auto-renew your Part D plan

With significant changes to prescription drug coverage and potential premium increases, it’s more important than ever to shop and compare plans during open enrollment (October 15 – December 7).

Takeaways

These changes represent the most significant Medicare modifications in recent history. While some aspects—like negotiated drug prices—will provide savings, the overall trend is toward higher costs and more restrictions. The combination of the One Big Beautiful Bill’s cuts and new prior authorization requirements means Medicare beneficiaries will face a more complex and potentially less generous system.

As your broker, I’m committed to helping you navigate these changes. I recommend scheduling a comprehensive review of your Medicare coverage to ensure you’re positioned for these transitions. The landscape is changing rapidly, and proactive planning will be essential to maintaining your healthcare security in 2026 and beyond.

Contact me to discuss how these changes might specifically impact your situation and to explore your options for maintaining comprehensive, affordable healthcare coverage despite these challenging developments.

Sources

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Aaron

Insurance Broker at Aaron Cook Insurance

Independent insurance broker specializing in individual & family health, Medicare, group benefits, & life insurance. Helping my clients understand the multitude of coverage options, health plans, cost, and benefits they are entitled to.