Medicare Part D Changes for 2026

Medicare continues to evolve year after year, and staying on top of the latest updates is key to making sure your plan still meets your needs. Whether you're already enrolled or preparing to make a switch, understanding how upcoming changes could affect your coverage is essential.

Following the major shifts in Medicare Part D that took effect in 2025, additional updates are set to roll out in 2026. In this article, we’ll break down what’s changing, what it could mean for you, and how to make sure your Medicare health and prescription drug coverage is still the right fit.

What’s Already Changed in Medicare Part D

Significant changes to Medicare Part D started after the new prescription drug law passed in 2022, with several taking effect in 2023 and later. These updates have already led to noticeable savings on medications for many Medicare enrollees, and more improvements are still on the way.

Here’s a quick look back at some of the key changes already in place:

• Expanded Vaccine Coverage: Medicare Part D now covers more vaccines at no cost, making preventive care more accessible to beneficiaries.
• Drug Price Negotiation: For the first time, Medicare gained the authority to negotiate directly with pharmaceutical manufacturers for the prices on select high-cost, brand-name drugs Part B and Part D drugs that don't have competition. This shift is aimed at lowering out-of-pocket costs.

No More Donut Hole in Medicare Part D

As of January 1, 2025, the coverage gap stage, commonly referred to as the “donut hole”, has been officially phased out. Medicare Part D enrollees no longer need to worry about this confusing stage of coverage, which often meant higher out-of-pocket costs after reaching a certain spending threshold.

Related: What is My Prescription Deductible with Medicare?

Annual Part D Out-of-Pocket Costs Now Capped

Medicare Part D enrollees first saw an annual out-of-pocket spending cap in 2025; this was a major shift in how prescription drug costs are managed and made a significant difference for seniors with high prescription drug costs and often a fixed income.

In 2026, the Medicare Part D out-of-pocket costs cap will increase slightly from $2,000 to $2,100. While the amount has changed, the goal remains the same: to make medications more affordable and give beneficiaries greater financial protection and peace of mind.

M3P: The Medicare Prescription Payment Plan

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, including drug plans administered within a Medicare Advantage plan, was required to make this option available to you. At the time of publication, it has been suggested that if you signed up for the program 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.

Stay Informed on Medicare Changes

Every year, Medicare brings changes that can affect your health, prescription coverage, and costs. Taking the time to understand what’s new can help ensure your individual needs are met and that you're enrolled in the most suitable Medicare plan for you.

At Twin City Underwriters, we know these changes can feel overwhelming, and that’s why we’re here to help. If you ever have questions about your plan, reach out to our team of licensed Medicare brokers. 

Reach Out to us Today

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!