Medicare 101 with Ron Bezis of Manulife John Hancock Investments

Medicare Shifts in 2026

Medicare costs climbed sharply in 2026, driven by adjustments announced in November 2025. The standard Part B premium rose to $202.90 from $185.00, marking a nearly 10% increase. This hike, combined with a $26 jump in the Part B deductible to $283, reflects rising healthcare utilization and pricing trends. Part A hospital deductibles also increased by $60 to $1,736, affecting inpatient care expenses.

On the prescription drug front, the Inflation Reduction Act's provisions bore fruit. Negotiated maximum fair prices for 10 widely used drugs—such as Eliquis, Jardiance, and Xarelto—kicked in on January 1, 2026. These reductions, ranging from 38% to 79% off 2023 list prices, target high-expenditure medications without generic competition. The Part D out-of-pocket cap rose slightly to $2,100 from $2,000, but an option to spread costs over 12 months offers relief for those hitting the limit.

Medicare Advantage, covering over half of beneficiaries, faced turbulence. Insurers like UnitedHealthcare and Humana scaled back offerings, exiting counties and affecting 10% of enrollees—about 2.9 million people. Rural areas and states like Vermont saw the heaviest impacts, with up to 92% of Advantage members needing new plans. This stemmed from reimbursement cuts, risk adjustment changes, and unexpected utilization spikes post-pandemic.

Tensions simmer between stakeholders. While the government aims to curb spending through the Inflation Reduction Act, insurers argue these measures squeeze margins, prompting plan reductions. Standalone Part D plans dropped 22% to 360, and premiums are projected to rise as a premium stabilization demonstration was scaled back, cutting subsidies from $15 to $10 monthly. Meanwhile, Medicare Advantage overpayments reached $76 billion, 14% above traditional Medicare equivalents, fueling debates on program sustainability.

Non-obvious trade-offs emerge in access versus affordability. Lower drug prices benefit users of specific medications, but broader premium hikes burden all. Forced plan switches risk care disruptions, particularly for chronic condition patients reliant on networks. Growth in Advantage enrollment slowed to 3.2%, signaling potential shifts back to traditional Medicare amid instability.