Earlier this year, we shared concerns about the 2026 market landscape, including projections of significant Part D premium increases. The anticipated changes had many agents bracing for what could be one of the most challenging AEPs in recent memory.
CMS has now released official plan data ahead of the Annual Enrollment Period, and while the premium numbers offer some reason for cautious optimism, the reality on the ground tells a more complex—and disruptive—story than the headlines suggest.
Part D Premiums
While early projections suggested substantial premium increases—with some plans expected to jump from under $50 to over $100 monthly—the actual average tells a more favorable story. Stand-alone Part D premiums are decreasing from $38.31 to $34.50 on average, and MA-PD premiums are dropping from $13.32 to $11.50.
This improvement is largely due to CMS taking unprecedented action.
For the first time, CMS rejected bids with excessive premium increases and negotiated with carriers to bring costs down:
"CMS took unprecedented action to hold standalone prescription drug plan (PDP) sponsors accountable for significant year-over-year premium increases and exercised its full statutory authority to successfully negotiate bid terms and conditions and, when necessary, deny standalone PDP bids that included unacceptable, significant increases in cost sharing or reductions in benefits. Following these negotiations, CMS approved some revised bids and, for the first time, rejected standalone PDP bids that failed to address concerns regarding significant year-over-year premium increases and that were also market outliers compared to similar plans in the same region." –CMS Press Release
What This Regulatory Shift Means
While lower premiums sound like unequivocally good news, this regulatory intervention has created ripple effects throughout the industry.
Carriers, facing pressure to keep premiums down while managing the costs of the Inflation Reduction Act's out-of-pocket cap, have found other ways to adjust their business models.
The result? An unprecedented wave of non-commissionable plans as well as major changes to their formularies (more on that in a second).
In past years, agents might have seen 50-100 non-commissionable plans. This year, we're seeing hundreds of plans on non-commissionable lists—a level of disruption unlike anything the industry has experienced before.
Carriers are essentially shifting the cost burden: if they can't raise premiums and can't reduce benefits without CMS rejection, they're cutting agent compensation.
This creates a difficult reality: the premium numbers may look encouraging for beneficiaries, but agents are being asked to serve an increasingly complex market with dramatically reduced (or no) compensation for much of that work.
Remaining Challenges
Market consolidation continues, with fewer plan options available (down slightly from 5,633 to approximately 5,600 plans nationally).
Some carriers are still adjusting formularies and reducing coverage options—changes that don't show up in premium data but significantly impact beneficiaries taking specific medications.
The Part D Premium Stabilization Demonstration, which began in 2025, is continuing to help keep premiums in check. Nearly all stand-alone Part D enrollees in 2025 are in plans offered by sponsors participating in the 2026 demonstration.
But this stabilization program, combined with CMS's aggressive bid rejections, may be masking underlying market stress that's manifesting in other ways—like the explosion of non-commissionable plans.
Medicare Advantage Updates
The MA market shows similar patterns—hopeful numbers with underlying complexity:
- Average monthly premiums are decreasing from $16.40 to $14.00
- Supplemental benefits (dental, vision, hearing) remain stable
- Over 99% of beneficiaries will have access to MA plans
- 97% of beneficiaries will have access to 10 or more plan options
These lower premiums may make MA plans increasingly attractive to beneficiaries facing rising costs elsewhere in their healthcare spending, particularly with Part B premiums still projected to increase to $206.50 monthly.
That would be an 11.6% increase that would consume nearly 40% of the average Social Security cost-of-living adjustment.
The Hidden Disruption
However, the MA market isn't immune to the compensation challenges affecting Part D.
Many MA plans are also appearing on non-commissionable lists, and in some areas, renewal commissions have been discontinued.
The integrated approach of Medicare Advantage becomes increasingly compelling for beneficiaries in 2026, but agents must now navigate which plans they can realistically afford to sell while still serving their clients' best interests.
Navigating an Unprecedented Landscape
Make no mistake: this may be one of the most disruptive AEPs we've faced.
The combination of regulatory intervention, carrier cost management strategies, widespread commission cuts, and ongoing market consolidation creates a perfect storm of complexity.
But here's what we know about independent insurance agents: brokers are resilient.
You've always found ways to adapt, innovate, and continue serving your senior clients even when the industry landscape shifts beneath your feet. This year will require that resilience more than ever.
What This Means for Your AEP Strategy
- Leverage the premium news carefully. Yes, premiums are lower than expected, and that's genuinely good news. But don't oversell the positivity when the reality includes significant formulary changes and fewer plan options.
- Prioritize efficiency ruthlessly. With reduced compensation on many plans, you cannot afford to spend the same amount of time on each client interaction. Streamline your processes, use tools like IntegrityCONNECT to manage client information and speed up comparisons, and find ways to serve clients well without sacrificing your business viability.
- Position MA strategically: MA plans remain competitively priced and may appeal to cost-conscious beneficiaries, particularly those concerned about overall Medicare spending, including projected Part B premium increases.
Not set up with IntegrityCONNECT yet? Register for an upcoming training webinar or reach out to us for one-on-one personalized training.
Plan Finder Updates for CY2026
Medicare.gov is introducing new features to help beneficiaries navigate plan selection:
- Provider network comparison tools allow beneficiaries to see which plans accept their current providers
- Expanded supplemental benefit details including information about weight management programs and other newer benefit offerings
- AI-powered prescription cost estimator that compares costs across local pharmacies
- Enhanced security measures to protect Medicare accounts
- Additional filtering options to match beneficiaries' specific needs
These tools will be available by October 1st.
Learn more about the updates: Medicare Plan Finder Updates - Enhanced Benefit Details for Your Clients
Conclusion
CMS's unprecedented intervention in the bid process has created more favorable premium conditions, but the underlying market dynamics—consolidation, formulary management, commission decreases, and cost pressures—remain in play.
The agents who thrive in 2026 will be those who face this disruption head-on, adjust their business models accordingly, and continue putting senior clients first even when the path forward isn't clear.
