Medicare Part D premiums and plan choices in 2026

The number that anchors every Medicare drug plan premium went up 6 percent for 2026, to $38.99 a month. Six percent is the most the law now allows. Without that ceiling the figure would have been $75.38, nearly twice as high, according to CMS’s July 28, 2025 announcement¹.

That gap is one sign of how much the cost of the Part D benefit has grown since the Inflation Reduction Act capped what enrollees pay out of pocket. The national average monthly bid, the plans' own estimate of what the basic benefit costs per enrollee, rose from $179.45 for 2025 to $239.27 for 2026, CMS said. The federal government made up much of the difference, and for a second year it ran a temporary demonstration that paid extra to keep stand-alone drug plan premiums from jumping.

This piece lays out the 2026 numbers: how the base premium is calculated, what the premium stabilization demonstration did, how many stand-alone plans were offered and what they charged. It then sets those premiums beside what pharmacies pay for common generics, and closes with what changes in 2027, the first year since 2024 without the demonstration.

How the base beneficiary premium is set

CMS computes a national base beneficiary premium each summer from plan bids. For 2024 through 2029, the Inflation Reduction Act sets it at the lower of two numbers: the prior year's base premium plus 6 percent, or a formula share (25.5 percent, adjusted for reinsurance) of the national average bid. The 6 percent ceiling was the lower number in each of the last three years, according to CMS’s 2024², 2025¹ and 2026³ announcements.

No one pays exactly the base premium. A plan's premium starts there and is adjusted up or down by how far the plan's bid sits from the national average, then by any supplemental premium for enhanced coverage. Medicare Advantage plans can use their rebate dollars to buy the drug premium down, and the low-income subsidy can reduce or erase it, CMS's 2024 announcement explains.

Late enrollment penalties are also pegged to the base premium. Medicare charges 1 percent of the national base premium for each full month a person went without creditable drug coverage after becoming eligible, rounded to the nearest 10 cents, according to Medicare.gov¹³. At the 2026 rate, 20 uncovered months adds $7.80 a month. The penalty is recalculated each year as the base premium changes.

The premium stabilization demonstration

CMS created the voluntary Part D Premium Stabilization Demonstration in July 2024, ahead of the 2025 benefit redesign. It applied only to stand-alone prescription drug plans (PDPs), the drug-only coverage used by people in traditional Medicare. Participating plans got a flat cut in the base premium, a cap on how much a plan's total premium could rise from one year to the next, and, in the first year, narrower risk corridors that limited plan losses.

Sources are CMS's 2024 announcement², its 2026 parameters fact sheet⁴ and its 2027 bid fact sheet⁵. In setting the 2026 terms, CMS said it was reducing the government's support to help the program return to "regular market conditions." Apart from sponsors new to the market, only those that took part in 2025 could join in 2026, and they had to enroll every stand-alone plan they offered. CMS also said that during 2026 bid review it rejected some stand-alone plan bids for the first time, over large premium increases that were outliers in their regions.

Nearly every stand-alone enrollee ended up in a participating plan. CMS said in its September 2025 release⁶ that nearly all people in stand-alone plans in 2025 were with sponsors that opted in for 2026. KFF wrote at the time⁹ that the reduced support pointed toward substantially higher stand-alone premiums.

What stand-alone plans charged in 2026

Averages did not show the feared jump. CMS projected⁶ that the average total premium for a stand-alone plan would fall from $38.31 in 2025 to $34.50 in 2026, and that the average Part D premium in Medicare Advantage drug plans would fall from $13.32 to $11.50. KFF later reported¹¹ that the enrollment-weighted average stand-alone premium in 2026 came to $34, after people switched plans during open enrollment.

Plan counts kept falling. KFF counted 360 stand-alone plans nationwide for 2026¹⁰, down from 464 in 2025, the third straight annual decline. Most people with Part D are not in those plans; KFF found¹⁰ 58 percent of Part D enrollees were in Medicare Advantage drug plans in 2025.

Premiums sit on top of the benefit's other 2026 parameters. The standard deductible is $615 and the annual out-of-pocket threshold is $2,100, after which enrollees pay nothing more for covered drugs that year, according to CMS’s final 2026 program instructions⁸. Our overview of Part D changes covers the benefit design in more detail.

Premiums next to what common generics cost

For people whose prescriptions are all older generics, the premium is often the biggest part of the Part D bill. The table uses GxRadar's analysis of CMS NADAC files¹⁴ for October 2026. NADAC is what pharmacies pay to acquire a drug, and it is a different figure from a copay or the price a plan pays a pharmacy, which adds a dispensing fee.

Pharmacies paid about $3.35 in October 2026 to stock 30 tablets of each of these five generics, or roughly $40 a year at that rate. CMS's projected average stand-alone premium of $34.50 a month comes to $414 a year. The premium also buys insurance against high-cost drugs and the out-of-pocket cap, and plans pay pharmacies more than acquisition cost. Our pieces on a month of common generics, cash prices and copays and Extra Help cover the trade-offs. Which plan fits a given prescription list is a question for Medicare's plan finder, a pharmacist or a counselor.

2027, without the demonstration

CMS announced on July 28, 2026 that it would end the demonstration after 2026, saying sponsors now had enough experience with the redesigned benefit, according to its 2027 fact sheet⁵. The base premium rises to $41.33.

The two main sources disagree about the effect on premiums. CMS projected⁷ that the average stand-alone premium would rise less than $1, from $35.09 to $36. KFF's analysis¹¹ estimated $51 for 2027, up from $34, if current enrollees kept their plans, and said CMS did not explain its method. KFF also found that 76 percent of stand-alone enrollees without low-income subsidies, 10.4 million people, would pay more if they stayed put, and that no stand-alone plan would charge a zero premium to those enrollees.

CMS's two figures for 2026 ($34.50 and $35.09) come from releases a year apart and use different enrollment weights. Open enrollment for 2027 coverage runs from October 15 through December 7, 2026, according to CMS⁷.