Medicare 2026: Eight Facts You Must Know

The landscape of Medicare is undergoing some of the most dramatic changes in its history. The overarching goal behind much of today’s legislation is clear: Privatize Medicare and Reduce Costs to the Federal Government. But for beneficiaries and their families, these shifts bring new risks, fewer benefits, and higher costs. Below is a breakdown of what’s happening now, how it affects you, and the steps you must take to protect yourself. 

1. The Shrinking Medicare Advantage Marketplace

Medicare Advantage (MA) plans, once known for zero-premium options and rich supplemental benefits, are pulling back:

• Zero-premium plans are becoming rarer.

• Supplemental benefits such as dental, vision, meal delivery, fitness memberships, and transportation are being reduced or eliminated.

• PPO plans are disappearing. More plans are shifting to HMOs, which limit provider access and require referrals.

This trend is not accidental; it reflects broader structural changes in federal health programs.

 2. The One Big Beautiful Bill Act (OBBB) and Its Fallout

Signed into law on July 4, 2025, the OBBB introduced historic cuts and restructuring that accelerate the push toward privatization. Key impacts include:

• $500 billion in Medicare cuts over 2026–2034, triggered by deficit rules known as PAYGO

• Loss of eligibility for some lawfully present immigrants (including refugees and asylum seekers) by January 2027.

• A nine-year freeze (until 2035) on improvements to Medicare Savings Programs (MSPs), which help low-income beneficiaries afford premiums and copays.

• Reduced rebates to MA plans, limiting their ability to fund extras like dental or vision coverage.

The OBBB makes traditional Medicare less accessible and pushes more people into MA plans often with fewer choices and higher restrictions. The freeze on MSP improvements also means low-income seniors face more paperwork, fewer approvals, and higher risks of losing coverage.

 3. Why Your Annual Notice of Change (ANOC) Is a Lifeline in 2026

This year, your ANOC is not just a formality; it’s your survival guide. Every Medicare Advantage and Part D beneficiary will receive this notice by September 30. It spells out changes for 2026 in:

• Premiums and deductibles

• Drug formularies (covered medications)

• Provider and pharmacy networks

• Supplemental benefits

• Out-of-pocket caps

Ignoring your ANOC could mean:

• Losing your doctor or pharmacy

• Paying hundreds more for prescriptions

• Staying in a poor-quality plan without realizing it

How to Read Your ANOC Strategically

1. Start on Page 1 – Look for premium hikes, deductible increases, and network changes.

2. Check drug coverage – See if your prescriptions are still covered or moved to higher tiers.

3. Confirm your doctors and pharmacies – Networks may shrink.

4. Review extra benefits – Don’t assume dental, vision, or fitness perks remain.

5. Watch for red flags – A premium jump of $20+, dropped providers, or a plan rating under 3 stars.

 4. Enrollment Mistakes Now Carry Higher Penalties

Because of OBBB’s restrictions and CMS rules, errors in enrollment are harder to fix:

• Late enrollment in Part B or D means permanent monthly penalties unless you qualify for a Special Enrollment Period.

• Gaps in drug coverage trigger costly penalties, even short lapses.

• Wrong plan choice can lead to denied claims or much higher costs.

 5. Legislative Proposals to Watch

Several bills in Congress could further reshape Medicare:

• H.R. 3467 – Medicare Auto-Enrollment Act Automatically enrolls people into the lowest-cost MA plan and locks them in for 3 years, making it difficult to switch back to traditional Medicare (and subjecting them to underwriting for supplemental plans later).

• Prompt and Fair Pay Act Requires MA plans to reimburse providers at traditional Medicare rates, addressing payment disparities.

• Upcoding Crackdown Bills Target MA plans that inflate diagnoses to increase reimbursements.

• CMS 2026 Final Rule Guardrails on AI-driven coverage decisions (plans must justify denials). Expanded access to anti-obesity medications. New protections against misleading marketing. Part D out-of-pocket cap set at $2,100 (but expect premium hikes).

 6. IRMAA and Rising Premiums

If you are a higher-income beneficiary, IRMAA (Income-Related Monthly Adjustment Amount) adds surcharges to your Part B and Part D premiums.

• The standard Part B premium in 2026 is projected to rise to $206.50/month (up 11.6%).

• Part D premiums are climbing to $50 or more (up from about $35).

• Supplemental plan premiums are expected to rise by up to 40%.

Your 2026 IRMAA bracket is based on your 2024 income—so retirement decisions, asset sales, or capital gains may affect your costs. If your income has dropped, you can appeal IRMAA to lower your premiums.

 7. Why Costs Are Rising

Part B and Supplemental Plans

• The COVID rebound: Many people skipped care in 2020–2021; now demand for services is higher.

• Shift to outpatient care: Services once billed under Part A (hospital) are increasingly billed under Part B, where beneficiaries share more of the costs.

• Boomer retirements: 10,000 people a day are enrolling in Medicare.

Part D (Prescription Coverage)

• High-cost drugs: The $2,000 annual cap encouraged more people with expensive conditions (e.g., MS, RA, weight-loss drugs) to use coverage.

• MOOP (Maximum Out-of-Pocket) cap: Set at $2,100, shifting costs to insurers—who then pass them along to all enrollees (that’s all of us).

• Reduced subsidies: Government support for Part D premiums has been cut by 40%.

 8. What Elders and Caregivers Should Do Now...

1. Read your ANOC carefully, don’t assume last year’s coverage continues.

2. Compare plans during open enrollment especially drug coverage and provider networks.

3. Check MSP eligibility even though improvements are frozen, you may still qualify under current rules.

4. Plan for higher premiums budget for increased costs in Part B, D, and supplemental coverage.

5. Monitor legislation especially H.R. 3467 and any reforms to IRMAA.

6. Seek help if needed local SHIP/SHINE counselors and trusted advisors can guide you.

 Be aware that Medicare is changing faster than ever, with fewer benefits, more restrictions, and higher costs. The One Big Beautiful Bill Act and new CMS rules mean 2026 will be a turning point. For elders and caregivers, vigilance is no longer optional; it’s the only way to safeguard coverage, protect finances, and avoid costly mistakes!!!