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July 30, 2025
Navigating Medicare Part D in 2026: Key Updates and Strategic Implications
On July 28, 2026, the Centers for Medicare & Medicaid Services (CMS) announced important updates to the national average bid amount and other bid details for the upcoming year. These changes are significant for healthcare and insurance stakeholders, as they affect the financial framework of prescription drug plans (PDPs) and Medicare Advantage (MA) plans with drug coverage.
Key Figures for Calendar Year (CY) 2026:
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National Average Monthly Bid Amount: Set at $239.27, this figure represents a weighted average of standardized bid amounts across PDPs and MA plans with prescription drug coverage.
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Base Beneficiary Premium: Originally calculated at $75.38, this amount is adjusted to $38.99 due to an Inflation Reduction Act (IRA) provision, which limits the increase to 6% from the previous year’s base beneficiary premium.
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De Minimis Amount: Maintained at $2.00.
Despite the implementation of the Drug Price Negotiation program, both the national average monthly bid amount and the base beneficiary premium have a significant increase from the previous year. The national average bid will increase by $59.82 (33%) and the base beneficiary premium, without the IRA adjustment, will increase by $19.40 (+35%).
Implications for Plans in CY 2026:
The monthly direct subsidy for Part D plans is calculated by subtracting the basic Part D premium from the plan’s risk-adjusted standardized bid. With both the bid and premium amounts rising, plans can expect higher direct subsidies, which are essential for offsetting liability under the standard Part D benefit.
Updates to the Part D Premium Stabilization Demonstration:
CMS has also announced modifications to the Part D Premium Stabilization Demonstration program for CY 2026. Initially launched in CY 2025, this voluntary program targeted standalone PDPs, with CMS noting that all industry PDPs opted into the program for its inaugural year. For 2026, CMS is:
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Base Beneficiary Premium Reduction: Adjusting from $15 to $10.
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Premium Cap: Increasing from $35 to $50 for non-employer plans.
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Narrowed Risk Corridors Thresholds: Removing, which previously offered additional protection against high plan costs.
New PDPs may opt into the program, while 2025 participants must notify CMS of their intent to continue. The enrollment window runs from Monday, July 28 to Monday, August 4, 2025.
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