Medicare Changes in 2026 – Separating Fact from Fiction

There is no doubt that many will be affected by changes to their coverage in 2026, but misinformation abounds, so today we want to concentrate on the facts about changes to Medicare in 2026.

First, Advantage Plans have been accused of illegitimately adding to diagnoses to increase payments from the government. The disputes are in process, but the range of additional payments to various Plans does suggest too much creativity in this regard. As a result, Plans have been under pressure to revisit questionable practices. When an organization loses revenue from one source, there is pressure to replace that revenue, so all those in for-profit Advantage Plans, in particular, should carefully review their options in the fall.

Second, the Inflation Reduction Act reduced the out-of-pocket maximum to $2000 for Part D Plans. This was a dramatic change over two years and led to Plans proposing increased premiums, copayments, and coinsurance for 2025 plans. The Biden administration’s response to that was to extend voluntary subsidies to the plans in order to stabilize premiums for 2025. We just learned that the current administration has decided to maintain the subsidies but will reduce funding by about 40%. Again, review your options carefully in the fall.

Finally, the extent to which Part B and D are paid for through general revenues is a longstanding simmering issue. As discussed above, the changes to Part D plans as a result of the Inflation Reduction Act substantially increased government support for the program. Part B payments from general revenues, however, are a much more significant issue. According to government sources, 92 percent of those on Medicare pay the base premium of $185 per month, which contributes 25 percent toward the cost of Part B. 

It is common for societies to subsidize healthcare coverage for retired citizens, but very few realize the extent to which Part B is paid for through general revenues or personal income tax. The Trump administration vowed not to touch Medicare, but already has by reducing the 2025 subsidy program for 2026.

In a few months, we’ll have the facts.