CMS Releases Proposed 2026 Payment Policy Updates for MA and Part D Programs

The Centers for Medicare and Medicaid Services (CMS) released the 2026 Advance Notice for the Medicare Advantage (MA) and the Medicare Part D Prescription Drug Programs that would update payment policies for these programs. This release complements the 2026 MA and Part D proposed rule that CMS released in November 2024. If finalized, these policies and updates would continue common sense, fiscally responsible technical updates to MA payments. Payments from the government to MA plans are expected to increase on average by 4.33 percent, or over $21 billion, from 2025 to 2026, as proposed.

CMS is concurrently releasing the draft 2026 Part D Redesign Program Instructions that continue to implement the redesign of the Medicare Part D program. The Inflation Reduction Act redesigned Medicare Part D to reduce prescription drug costs and improve benefits for Medicare enrollees, including the first-ever cap on annual out-of-pocket prescription drug costs for all people with Medicare prescription drug coverage that went into effect on Jan. 1, 2025. With the Inflation Reduction Act, annual out-of-pocket costs will be capped at $2,100 in 2026 for people with Medicare Part D, which is the 2025 out-of-pocket cap of $2,000 indexed for inflation.