Every Annual Enrollment Period brings its own unique challenges. But 2026 presents a particularly complex set of circumstances.
Several factors are coming together – regulatory changes, market shifts, and economic pressures – that will change how Medicare beneficiaries and the agents who serve them approach the healthcare landscape.
Important! Save your seat at our annual 2026 AEP Gut Check with DEFT Research on Thursday, August 28th. We'll get a sneak peak at this incredible research that provides producers with their marching orders to best connect with this year's most likely shoppers.
Part D Prescription Drug Plan Changes
One of the most significant changes involves Part D Prescription Drug Plan premiums, which are projected to increase more than in recent years. This isn't happening in isolation—Medicare costs are rising across the board.
Even Part B premiums are projected to increase 11.6% to $206.50 monthly in 2026, nearly double the six percent increase seen in 2025, according to projections from Kiplinger and the 2025 Social Security and Medicare Trustees Report.
We're seeing premium increases that represent a significant shift from previous years. In some markets, plans that previously cost under $50 per month are expected to reach $100+ monthly premiums. This trend is affecting multiple carriers and markets across the country.
Beyond premium changes, formulary adjustments are equally significant. Some carriers are planning to reduce their covered drug lists by 40-50%, and these reductions often affect higher-cost medications rather than generic alternatives.
The reality of market consolidation: Five years ago, central Illinois offered 30+ PDP options, with several available at $0 premium. Today, approximately 15 plans remain, and we anticipate continued market contraction.
When Policy Intentions Meet Market Dynamics
The Inflation Reduction Act was designed to benefit Medicare beneficiaries by capping annual out-of-pocket prescription costs at $2,000 (rising to $2,100 in 2026), down from the previous $4,000+ threshold. While this represents meaningful protection for high-cost medication users, it has created some unintended consequences.
Rather than eliminating costs, the regulation has redistributed them. Previously, a relatively small percentage of beneficiaries reached that $4,000+ threshold. Now, the insurance industry has distributed those costs across all plan members through higher premiums.
This means many beneficiaries will see higher monthly premiums, as these costs don't count toward the out-of-pocket maximum. It demonstrates how well-intentioned policy changes can create different cost structures within the market system.
Medicare Advantage: A Potential Alternative
As PDP premiums increase and options become more limited, we expect to see increased interest in Medicare Advantage plans. For many beneficiaries, the integrated approach of MA may become more attractive compared to the Original Medicare + PDP combination that's becoming more complex and costly.
However, the MA landscape is also evolving. We anticipate seeing fewer PPO options across many markets, with some areas potentially becoming HMO-focused.
There's also a timing consideration: MA plan formularies typically aren't available until October 1st, giving agents and beneficiaries about two weeks to analyze options before the enrollment period begins.
The Impact on Beneficiaries
These changes will affect seniors on fixed incomes who need to make careful financial decisions.
A beneficiary who's been paying $35 monthly for prescription coverage and faces a double digit premium increase will need to adjust their budget – this might mean making choices between medications and other expenses.
These are individuals who may not have significant flexibility in their budgets to absorb premium increases. They may not intuitively understand the connection between federal drug pricing regulations and their monthly costs, and they'll be seeking guidance to understand a system that has become more complex.
As the Kiplinger analysis notes, with projected Social Security cost-of-living adjustments of only 2.6-2.7%, the Medicare Part B premium increase alone (projected at $21.50 monthly) will consume nearly 40% of the average beneficiary's Social Security increase.
Agent Commissions
Adding to the complexity, some carriers are also eliminating agent commissions, which affects the support structure available to help beneficiaries navigate these changes.
This creates a challenging dilemma for agents: we're expected to help clients navigate an increasingly complex PDP landscape without compensation for our time and expertise. While we remain deeply committed to serving seniors, we also need to maintain viable businesses, creating a difficult balance as we prepare for the upcoming AEP.
Prepare for What's Coming
How can we prepare for the upcoming AEP?
Start conversations early. Don't wait until October to discuss potential premium increases and plan changes with clients. Begin setting expectations now and prepare your pre-AEP communications.
Streamline your processes. With limited time to analyze options and more complex plan comparisons, efficiency will be crucial. Implementing tools and systems now to handle increased complexity will be beneficial during AEP. If you haven't yet utilized all available zero-cost solutions offered by Integrity, consider exploring these resources.
Check them out here: 15+ Unique Agent Perks We Offer as an Integrity Partner
The Bottom Line
The 2026 AEP will bring changes for everyone in this industry.
Beneficiaries will work through more complex decisions as options evolve. Agents will provide guidance while adapting to changing compensation structures. The Medicare system is adjusting to regulatory changes that have shifted market dynamics.
But the core mission – helping Medicare beneficiaries navigate their healthcare options – is more important than ever.
