Medicare beneficiaries face targeted payment reductions and policy shifts in 2026, with a 1.3% cut to home health payments finalized by CMS. Part B premiums rise to $202.90 monthly, up $17.90 from 2025, alongside higher deductibles. These changes, effective January 1, impact seniors’ out-of-pocket costs and care availability amid rising inflation.
Key Payment Cuts
CMS dropped a proposed 6.4% home health cut but locked in a 1.3% reduction for calendar year 2026. This follows skyrocketing labor and operational costs for providers.
Physician fee schedule adjustments include a 3.26% overall rate increase, but facility-based practices face RVU cuts affecting compensation. Original Medicare starts prior authorization pilots for certain services.
Premium and Deductible Hikes
Part B standard premium jumps to $202.90 from $185, with the annual deductible rising to $283, up $26. Part A deductible reaches $1,736, a $60 increase.
High-income beneficiaries see steeper Part B and D premiums, tiered from $81.20 extra for individuals over $109,000. These rises offset some negotiated drug savings but strain fixed budgets.
Drug Pricing Shifts
Ten high-cost Medicare drugs see CMS-negotiated lower prices effective January 1, saving $1.5 billion in out-of-pocket costs. Savings would have cut Medicare spending by $6 billion if applied in 2023.
Popular GLP-1 weight-loss drugs like those from Eli Lilly and Novo Nordisk drop prices for Medicare purchases starting July, covering more patients with obesity or related conditions. Part D out-of-pocket cap rises, with automatic reenrollment in payment plans.
Provider and Access Impacts
Home health agencies warn the 1.3% cut squeezes margins despite dropped steeper proposal, potentially limiting in-home care access. Premier Inc. notes unintended patient care risks.
Medicare Advantage plan finder improvements allow changes if misled; a pilot program ends while limits expand on another. Advantage plans must cover negotiated drugs.
Official Reactions
CMS cites budget neutrality and inflation rebates in the physician fee schedule final rule. Part B drug inflation rebates refine 340B calculations from January 1.
AARP highlights quality-of-life gains from drug price drops but urges vigilance on plan choices during open enrollment’s final weeks.
What Seniors Should Do
Review plans now; open enrollment ends mid-December for 2026 coverage. Use Medicare.gov’s updated finder for drug costs and prior authorization details.
Check eligibility for low-income aid like Extra Help, as Part D changes loom. Monitor SSA for personalized notices on premiums and COLA offsets.
Story develops with state Medicaid responses and Q1 implementation data. Watch CMS.gov for appeals guidance.