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For millions of retirees, Medicare Part D is the lifeline that keeps prescription drug costs manageable. But starting in 2026, that lifeline may come with a bigger price tag.
Premiums for Part D are expected to rise-some by as much as $50 a month. That's according to health policy researchers who point to a mix of factors: more people using costly new drugs, shifts in federal subsidies, and changes from the Inflation Reduction Act that shift more of the financial burden to insurers.
More medicines, more money
Drug spending in the U.S. jumped more than 10% in 2024, according to the American Journal of Health-System Pharmacy. Surprisingly, it wasn't because prices spiked across the board-many drug prices actually dipped slightly. Instead, the big driver was demand. New medications for autoimmune diseases, diabetes, and other chronic conditions hit the market, and patients are using them in greater numbers.
For Medicare's aging population, those drugs are often essential. But for insurers, they're also expensive to cover. That cost eventually trickles down to seniors in the form of higher monthly premiums.
A wild card: weight-loss drugs
The arrival of drugs like Wegovy and Ozempic has added another layer of complexity. While Medicare doesn't cover prescriptions intended strictly for weight loss, many of these drugs are also prescribed for diabetes-one of the most common conditions among older adults. As off-label use grows, so do the costs.
According to The Washington Post, the Trump administration is weighing a pilot program that could expand Medicare access to these treatments by 2027. If that happens, insurers may face even higher costs to manage.
The cap that helps patients-but squeezes insurers
One of the biggest shifts happened this year, when a new $2,000 cap on out-of-pocket spending for prescription drugs went into effect under the Inflation Reduction Act. For patients, that's a huge win. Before the law, some Medicare beneficiaries paid $10,000 or more a year for a single drug.
But here's the tradeoff: once patients hit that cap, insurers pick up the rest of the tab. "The Inflation Reduction Act was necessary to make Part D proper health insurance, but there's a cost to do so," said Stacie Dusetzina, a professor of health policy at Vanderbilt University Medical Center.
Less federal help on the way
In 2025, the Biden administration tried to soften the blow with a $6 billion stabilization fund for Part D insurers, which briefly pushed average premiums down. But the Trump administration has announced plans to scale that support back by 40% in 2026. Without that cushion, insurers are expected to raise premiums to cover the gap.
What it means for seniors
So what should Medicare enrollees do? Experts say the worst mistake would be sticking with the same plan year after year without comparison shopping. With open enrollment beginning October 15, seniors should review drug formularies and monthly premiums closely to avoid surprise costs.
"Everyone should shop plans in open enrollment," Dusetzina said. "The plans change every year-and so do people's medical needs."