Medicare Part D Changes for 2026

If you are enrolled in Medicare, you likely know that changes are a common occurrence. Because of this, staying informed is critical to understanding how you may be affected and being confident that the Medicare plan you are enrolled in is ideal for your needs. We, at Twin City Underwriters, are here for you. Never hesitate to make that phone call and ask that question.  

2025 brought significant changes to Medicare, specifically when it comes to Part D prescription medication coverage. And 2026 will bring a few more. In this blog, we’ll highlight what you need to know about the continued changes, how they could impact you, and what actions you should take to ensure you have the right Medicare coverage.  

Important Updates to Part D for Medicare Recipients 

Major Part D changes started taking place in January 2023, when a new prescription drug law was enacted. The changes have resulted in significant savings in prescription medication costs for countless Medicare beneficiaries. The new law resulted in: 

• Additional Vaccine Coverage: More vaccines are being fully covered by Medicare Part D. 

• Medicare Negotiated Drug Prices: For the first time ever, ‘Medicare will be able to negotiate directly with manufacturers for the price of certain high-spending brand-name Medicare Part B and Part D drugs that don’t have competition.’ 

Source: https://www.medicare.gov/about-us/prescription-drug-law 

Farewell to the Donut Hole 

Starting January 1, 2025, Medicare recipients will experience the elimination of the coverage gap stage in their drug plans. This means that the dreaded “donut hole” in coverage will be a thing of the past. 

Prescription Costs Will Be Capped 

Additionally, for the first time in Medicare history, Part D medication costs will be capped at $2,100 out of your pocket annually. This significant change aims to make medications more affordable and accessible for everyone enrolled in Medicare, providing peace of mind and financial relief for those who need it most. 

A Cost-Effective Solution 

The Medicare Prescription Payment Plan, or M3P, was introduced at the start of 2025. With many plans going back to charging a deductible and those who have costly medications, this was a program to consider participating in. Instead of paying at the pharmacy, you are billed through your insurance carrier for the costs of the medications you pick up at the pharmacy. Moreover, the insurance company will send you a bill that caps your monthly payments. For instance, January’s statement would reflect $175 (or $2,100/12) rather than owing on the deductible and the copay at one time. 

Each drug insurance carrier, to include drug plans administered within a Medicare Advantage plan, was required to make this option available to you. We are hearing that if you signed up in 2025, you will likely be re-enrolled in 2026. If you didn’t enroll in 2025, you will have the option to join in 2026. 

Your participation in the M3P program is voluntary. If you take generic medications or spend less than $100 a month on medications, enrolling in M3P is not advised.

At Twin City Underwriters, we are closely overseeing the changes and how they will impact Medicare enrollees in 2026 to ensure we provide you with the latest updates and assistance in making Medicare coverage decisions. Contact us today with any questions you have. 

Choosing a Medicare plan can be difficult. Twin City Underwriters helps Medicare recipients in Minnesota, Wisconsin, North Dakota, South Dakota, Iowa and Florida find the Medicare plan that meets their unique needs. Schedule a one-on-one meeting with one of our Medicare insurance brokers to get your questions answered!