The Medicare Part D market is entering 2026 amid a period of contraction and recalibration. Premiums are ticking down on average, but plan options are shrinking as major insurers reassess the profitability of standalone drug plans under the effects of the Inflation Reduction Act. Many payers are consolidating their offerings or shifting focus toward the Medicare Advantage market.
Four notes:
1. CMS projects the average standalone Part D premium will drop to $34.50 in 2026, down from $38.31 in 2025. For Medicare Advantage plans that include drug coverage, the average total premium will fall from $13.32 to $11.50.
2. The total number of standalone prescription drug plans will drop to 360 nationwide in 2026, down from 464 in 2025, per KFF. Major insurers such as Centene (Wellcare), Health Care Service Corporation (Cigna/HealthSpring), and Elevance Health (Anthem) have either exited certain PDP regions or discontinued products entirely as they pivot resources toward MA.
3. CMS said that nearly all PDP sponsors joined the Part D Premium Stabilization Demonstration, which limits premium increases to $50 per month. Most enrollees will see premiums stay flat or decline, with some plans offering $0 premium options depending on geography.
4. In 2025, about 58% of Part D enrollees received coverage through MA plans, compared to 42% in standalone PDPs. That balance is expected to persist or widen in 2026 as MA plans leverage rebate dollars to offer low or zero-premium drug coverage. CMS projects MA enrollment to be 34 million, or roughly 48% of all Medicare beneficiaries, next year.
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