Medicare Open Enrollment 2025: Key Changes to Prescription Drug Coverage and Costs for 2026

The Medicare open enrollment period for 2025 runs until December 7, allowing beneficiaries to review and adjust their Medicare Advantage plans and Part D prescription drug coverage. This period offers the most flexibility for changing plans, including switching between Original Medicare and Medicare Advantage. Approximately 55 million individuals are enrolled in either standalone Part D or Medicare Advantage plans, emphasizing the importance of choosing the right prescription drug coverage to manage retiree healthcare costs. For 2026, several changes are expected to impact Medicare beneficiaries. Prescription drug plan and Medicare Advantage premiums are generally declining, while the number of available Part D plan options is decreasing. In contrast, Medicare Part B premiums are projected to increase by 9.7%, representing a significant cost uptick for beneficiaries. Out-of-pocket costs for prescription drugs will also rise modestly, with the annual cap increasing from $2,000 to $2,100. Cost-sharing structures involve paying coinsurance until reaching the cap, after which plans cover 100% of drug costs. These caps apply to covered prescription drugs but exclude treatments under Medicare Part B. A key policy update for 2026 is the initiation of Medicare’s drug price negotiation for ten medications, aiming to reduce beneficiaries' out-of-pocket expenses by an estimated $1.5 billion. This includes mandated coverage of negotiated drugs, although cost-sharing will vary by plan, underscoring the ongoing need for beneficiaries to compare plans carefully. Beneficiaries are encouraged to use Medicare’s online plan finder and seek assistance through the State Health Insurance Assistance Program (SHIP) and other programs such as Extra Help and Medicare Savings to manage costs effectively. Annual notice of change documents have been distributed to inform beneficiaries about plan updates and cost changes. These updates highlight the evolving landscape of Medicare policy, the shifting balance of premiums and out-of-pocket costs, and the growing role of drug price negotiations. Medicare beneficiaries and advisors should prioritize plan comparisons and financial assistance options to optimize coverage amid these changes.