The 2026 Medicare Advantage and Part D (MA-PD) bidding cycle presented continued cost and revenue pressures, eliciting varied strategic responses from plan sponsors. Both MA-PD and standalone prescription drug plan (PDP) plan sponsors faced the challenge of projecting 2026 costs under the redesigned Part D benefit—as early 2025 data indicated rapidly rising non-low income (NLI) specialty trends1—incorporating changes introduced by the Medicare Drug Price Negotiation Program (MDPNP), and reacting to continued changes to the Part D risk adjustment model.
With this tumultuous backdrop, stakeholders are focused on discussions and actions to bring stability to the PDP market. While MedPAC seeks to bring PDP stability discussions to the forefront,2 the Centers for Medicare and Medicaid Services (CMS) noted in its announcement of the 2026 direct subsidy that it “… for the first time, rejected standalone PDP bids that failed to address concerns regarding significant year-over-year premium increases.”3
On September 26, 2025, CMS released the 2026 landscape file4, providing the first view into the positioning of carriers as they adjust to these dynamics. This article highlights the key changes to plan offerings and premiums in the individual PDP market. A similar paper outlining highlights and changes to the MA-PD market can be found here.
The CMS crosswalk files are not available at the time of publication and thus we cannot definitively determine whether 2025 PDPs no longer present in the 2026 landscape file were terminated or crosswalked into other plan offerings. We present results dependent on this distinction (e.g., lives covered or average premium change) assuming these instances are plan terminations. This primarily impacts the attribution of 2025 Wellcare Medicare Rx Value Plus and Cigna Healthcare Extra membership. Values noted in this report may have been different had we had access to and incorporated the CMS crosswalk file for PDPs.
Fewer Medicare prescription drug plan offerings and a more limited demonstration program tighten the market
A. Plan offerings decreased, again
The number of standalone PDPs will decrease in 2026, from 464 to 360, a decrease of 22% (following a 35% decrease in plan offerings between 2024 and 2025). This decrease is primarily driven by the following carrier decisions detailed in the 2026 CMS landscape file:
- Wellcare will offer only one nationwide enhanced plan in 2026, Wellcare Value Script. This reduces their overall plan count from 102 to 68.
- Healthspring5 (previously Cigna) will offer only one enhanced plan in 2026, Healthspring Extra, and reduce nationwide plan offerings to 27 regions for this plan.
- Elevance exited the market (down from 22 plan offerings in 2025). Note the parent organization doing business as “Elevance Health, Inc. & BCBSMA & BCBSRI & BCBSVT” continues to offer plans in one PDP region.
B. Members remain concentrated within the top five carriers
As of September 2025, 96% of PDP members are enrolled in plans offered by the top five carriers (Wellcare, CVS/Aetna, UnitedHealthcare, Humana, and Healthspring), with Wellcare comprising 44% of all members. While the PDP market has always been concentrated, there has been a steady rise in the percentage of members enrolled with large national carriers since 2020. Notably, this trend in concentration is occurring for both NLI and low-income (LI) members, with 95% of NLI members and 99% of LI members enrolled in the top five carriers.6 Figure 1 shows the concentration of membership for these carriers over time, with the ability to view each income status separately or in total.
Figure 1: Individual PDP enrollment by carrier by year, 2020–2025
* 2020–2024 membership based on December CMS enrollment data. 2025 reflects September 2025 CMS enrollment data.
C. The PDP premium stabilization demonstration continues with relaxed parameters
For 2025, CMS announced the creation of a voluntary three-year Premium Stabilization Demonstration, which consists of three key facets for participating organizations:
- a lower base beneficiary premium (BBP),
- a cap on year-over-year (YoY) premium increases, and
- narrower risk corridors.7
CMS outlined the parameters of this program for plans in 20268, reducing the impact of all three facets as shown in Figure 2.
Figure 2: Part D premium stabilization demonstration parameters, 2025 and 2026
| 2025 | 2026 | |
|---|---|---|
| Reduction in BBP | $15 | $10 |
| Max. YoY premium increase | $35 | $50 |
| Narrower risk corridors | Yes | No |
D. $0 plan offerings are here to stay
While historically only members enrolling in MA-PD plans have had access to $0 premium plans, this dynamic changed in 2024 when Wellcare began offering the first $0 premium PDP. In 2026, the number of $0 premium plans rose markedly, with 68 offerings across the U.S. (excluding U.S. territories), primarily offered by Wellcare (28 plans) and Humana (26 plans). As of September 2025, about 4.8 million beneficiaries were enrolled across 43 $0 premium PDPs.
In 2026, over 70% of $0 premium plans will be basic plans, while historically most $0 premium PDPs have been enhanced (74% of $0 premium PDPs were enhanced in 2025). Basic PDP enrollment tends be comprised of more low-income members (through voluntary or auto-enrollment); however, the $0 premium for basic PDPs could cause an unanticipated influx of NLI members into these plans.
It is worth noting the changes to the Prescription Hierarchical Condition Category (RxHCC) risk model, which are particularly favorable for LI PDP members, may have contributed to the frequency of $0 premium basic plans. Additionally, the extent to which the PDP Premium Stabilization Demonstration contributed toward $0 premiums in 2026 is unknown, as the pre-demonstration premiums are not public.
E. Calendar year (CY) 2026 PDP crosswalk requirements
CMS’s crosswalk policy, finalized in the April 2024 Federal Register, is newly effective in 2026 and can limit options within a single year for PDP carriers to react to changing market dynamics.9 When introducing a new plan and discontinuing a plan within the same year, enrollment in the discontinued plan must be crosswalked into the plan that will result in the lowest increase in premium. If the plan crosswalks the discontinued plan into the new plan, the premium cannot exceed twice the (previous year’s) 2025 premium for the discontinued plan unless that increase is lower than the BBP. As such, carriers with only two plans in 2026 have greater flexibility to roll out new plan offerings in 2027.
This was also likely the driving force of crosswalks from high-cost enhanced to low-cost enhanced plans, as other crosswalk options would be prohibitively limited by the crosswalk premium requirements. These conditions may have made it attractive for plan sponsors to “sit out” for a year for additional flexibility in 2027.
The PDP Premium Stabilization Demonstration holds down increases for beneficiaries
The 2025 PDP market was defined by the Inflation Reduction Act (IRA) taking effect, as well as the introduction of a premium stabilization demonstration during the August resubmission period for that bid cycle. In 2026, the PDP market will continue to evolve as the first set of drugs subject to price negotiation take effect along with the ongoing implementation of the IRA and the Part D Premium Stabilization Demonstration.
Alongside the annual announcement of the national average bid amount and member premiums, CMS renewed the Part D Premium Stabilization Demonstration with updated parameters (detailed above).10
CMS stated that “nearly all people with Medicare enrolled in a stand-alone Part D plan in 2025 are currently enrolled in a stand-alone Part D plan offered by a plan sponsor that opted into the demonstration for 2026”, implying all national carriers participated in the demonstration.11
Figure 3 shows the number of members in plans with various premium changes between 2025 and 2026. For the purposes of this graph, we assume all PDPs not in the 2026 landscape files are plan terminations (rather than consolidations). Under this assumption, the PDP premium demonstration suppresses the premium increases for 3.0 million beneficiaries at $50 per month relative to 2025, with an overall average premium increase of $5.50 (14.5%), based on September 2025 CMS-published enrollment data.12 If we assume the Cigna and Wellcare enhanced plan changes are consolidations, these numbers reflect an overall premium increase of about $5.00 (13.3%).
Figure 3: Monthly premium changes, 2025 vs. 2026, not reflecting crosswalks8
Based on September 2025 CMS enrollment data.
Figure 3 highlights the high variability in premium change a member may experience. While some members may experience a premium increase at the cap set by the Premium Stabilization Demonstration, others may experience significant decreases. This variance is likely attributable to a combination of emerging experience, changes to the Part D risk score model, and carrier strategies.
Medicare PDP low-income targeting strategies remain divergent
While Wellcare, United, and Cigna will retain similar positions with respect to their LI targeting strategies in 2026, other national carriers have clear differences relative to 2025.
- Humana increased the number of basic plans below low-income benchmarks (LIB) from 17 regions in 2025 to 30 regions in 2026.
- CVS decreased the number of plans below the LIB from 15 in 2025 to six in 2026.
Figure 4 shows the count of plans below the regional LIB and eligible for enrollment of LI auto-assignees in 2026.
Figure 4: Count of PDPs by carrier below regional LIB, 2024–2026
The degree to which the Premium Stabilization Demonstration played a role in increasing the number of plans below benchmarks for all carriers is unknown, as CMS did not announce premiums prior to premium stabilization. It is possible participation in the demonstration resulted in some plans being below benchmark in 2026 despite intending to be above benchmark. Lower premiums resulting from participation in the demonstration could have shifted their positioning to below the benchmark unexpectedly.
Will consolidation and low premium options ferry the PDP Market safely into the IRA era?
Though the past several years have been full of significant transition and adaptation within the PDP market, it remains an important avenue to provide seniors with Part D coverage (roughly 40% of the individual Part D market in September 2025).13 Plan sponsors weighed the significant Part D dollars at-risk, and limited ability to impact risk capture, with the revenue tailwind from the 2026 RxHCC normalization factor intended to account for this risk.
The market continues to consolidate, with fewer plan offerings and increased concentration among the top carriers. The increase in $0 premium basic PDPs may signal a shift in plan sponsor strategy, as some carriers focus on LI auto-enrollment beneficiaries. CMS’s PDP Premium Stabilization Demonstration has played a critical role in moderating premium increases and supporting beneficiary affordability, though its long-term impact on plan strategies and market stability remains to be seen.
Monitoring carrier strategies will be critical to stakeholders that serve or have an interest in Medicare Part D. The continued market consolidation and proliferation of $0 premium PDPs, against the backdrop of the fully implemented IRA changes, may continue the trend of elevated membership movement amongst plans. Pharmacies, pharmaceutical manufacturers, pharmacy benefit managers, advocacy groups, and many more should continue to understand how the market is evolving, as it has a direct effect on how Medicare patients receive their prescriptions.
Caveats, limitations, and qualifications
The information in this paper is intended to describe premium changes and trends in the Medicare prescription drug plan (PDP) market. It may not be appropriate, and should not be used, for other purposes.
We relied on publicly available enrollment and premium data from the Centers for Medicare and Medicaid Services (CMS) to support the data presented in this paper. If this information is incomplete or inaccurate, our observations and comments may not be appropriate. We reviewed the data for reasonability but did not audit the data. As noted in the text, CMS has not released the PDP crosswalk files. We made assumptions regarding the termination or crosswalks to model a range of market premium increases as noted. Actual final premium change values across plans may be different than described in this report after the release and inclusion of the crosswalk file.
Jeremy Hamilton and Jake Klaisner are members of the American Academy of Actuaries and meet the qualification standards of the American Academy of Actuaries to render the actuarial opinion contained herein.
1 Cline, M., Madden, R., & Holcomb, K. (September 8, 2025). Milliman MedIntel Part D trend insights. Milliman, Inc. Retrieved October 14, 2025, from https://www.milliman.com/en/insight/medicare-medintel-part-d-trend-insights-halfyear-2025.
2 Suzuki, S., Hayes, T., & Johnson, A. (April 10, 2025). Structural differences between the Part D PDP and MA-PD markets. MedPAC. Retrieved October 14, 2025, from https://www.medpac.gov/wp-content/uploads/2025/04/Tab-D-Structural-issues-in-Part-D-April-2025.pdf.
3 Centers for Medicare and Medicaid Services. (July 28, 2025). 2026 Medicare Part D Bid Information and Part D Premium Stabilization Demonstration Parameters. Retrieved October 14, 2025, from https://www.cms.gov/newsroom/fact-sheets/2026-medicare-part-d-bid-information-and-part-d-premium-stabilization-demonstration-parameters.
4 Centers for Medicare and Medicaid Services. (September 26, 2025). CY2026 Landscape (202509) [Data sets]. Retrieved October 14, 2025, from https://www.cms.gov/medicare/coverage/prescription-drug-coverage.
5 Health Care Service Corporation. (July 8, 2025). HCSC Launches National Health Care Brand to Further Expand Access to Quality Care [Press release]. Retrieved October 14, 2025, from https://www.hcsc.com/newsroom/news-releases/2025/hcsc-launches-national-health-care-brand-healthspring-expand-access-quality-care.
6 Estimates of LI beneficiaries by carrier rely on the March 2025 LI file from CMS.
7 Shapiro, J. R. (July 29, 2024). Voluntary Part D Premium Stabilization Demonstration for Standalone Prescription Drug Plans, Release of the De Minimis Amount, and Operational Guidance [Memo]. Centers for Medicare and Medicaid Services. Retrieved October 14, 2025, from https://www.cms.gov/files/document/july-29-2024-parts-c-d-announcement.pdf.
9 Centers for Medicare and Medicaid Services. (April 23, 2024). Fed. Reg. 42 C.F.R. Parts 417, 422, 423, and 460. Retrieved October 14, 2025, from https://www.federalregister.gov/documents/2024/04/23/2024-07105/medicare-program-changes-to-the-medicare-advantage-and-the-medicare-prescription-drug-benefit.
10 Shapiro, J. R (July 28, 2025). Voluntary Part D Premium Stabilization Demonstration for Standalone Prescription Drug Plans, Release of the De Minimis Amount, and Operational Guidance [Memo]. Centers for Medicare and Medicaid Services. Retrieved October 14, 2025, from https://www.cms.gov/files/document/july-28-2025-parts-c-d-announcement.pdf.
11 Centers for Medicare and Medicaid Services. (September 26, 2025). Medicare Advantage and Medicare Prescription Drug Programs Expected to Remain Stable in 2026 [Press release]. Retrieved October 14, 2025, from https://www.cms.gov/newsroom/press-releases/medicare-advantage-medicare-prescription-drug-programs-expected-remain-stable-2026.
12 Centers for Medicare and Medicaid Services. (September 10, 2024). Monthly Enrollment by Plan [Data sets]. Retrieved October 14, 2025, from https://www.cms.gov/data-research/statistics-trends-and-reports/medicare-advantagepart-d-contract-and-enrollment-data/monthly-enrollment-plan.
13 Excludes Medicare-Medicaid, Medical Savings Account (MSA), cost, private fee-for-service, and Program of All-Inclusive Care for the Elderly (PACE) plans.