Ahead of Medicare’s annual mid-year announcement about the national average premium for Part D prescription drug coverage in 2026 and other plan details, two questions loom large for the insurers that sponsor Part D stand-alone prescription drug plans (PDPs) and the 23 million people in traditional Medicare who are currently enrolled in these plans.
Will the Trump administration continue Medicare’s Part D premium stabilization demonstration for a second year, and what will the PDP market look like in 2026 and in subsequent years? The answer to the first question could determine whether monthly PDP premiums remain at a relatively affordable level and whether PDP availability remains stable in 2026. The answer to the second question has larger implications for the viability of traditional Medicare as an option for beneficiaries nationwide but especially for beneficiaries who live in rural areas. This is because rural Medicare beneficiaries are more likely to be enrolled in traditional Medicare and rely more on drug coverage from stand-alone PDPs than Medicare Advantage plans.
For Medicare beneficiaries who are enrolled in traditional Medicare, which is just under half of all people with Medicare, getting Medicare Part D prescription drug coverage means enrolling in a stand-alone PDP. For Medicare beneficiaries who qualify for the Part D Low-Income Subsidy (LIS), enrolling in certain PDPs provides the only guaranteed option for premium-free drug coverage and lower cost sharing. In recent years, the overall number of PDPs has declined, with the number of PDPs available to the average beneficiary decreasing from 30 in 2021 to 14 in 2025. The number of premium-free (“benchmark”) plans for LIS enrollees is even lower and decreased from 8 benchmark PDPs in 2021 to 2 in 2025. Over this period, the average number of Medicare Advantage drug plans (MA-PDs) increased from 27 to 34.
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