The New Math Of Medicare Advantage Affordability

Editor’s note: This article is part of a series analyzing changes to Medicare Advantage plans for the 2026 annual enrollment period. A previous article highlighted how insurers are reducing overall product counts, exiting certain counties, and consolidating offerings.

With the 2026 annual enrollment period more than halfway over, many Medicare Advantage beneficiaries shopping for a plan have likely seen key changes to benefits from past years. Medicare Advantage carriers made changes to offset the financial and operational pressures. As a result, many beneficiaries will face rising premiums, increasing maximum out-of-pocket (MOOP) limits, and growing prescription drug deductibles. This article explores the relative scale and impact of each of these changes for Medicare Advantage Prescription Drug (MAPD), MA Part C, and prescription drug plans (PDP).

Membership figures reflect 2025 enrollment. Final enrollment decisions for 2026 will not be available until next year.

Shifting away from $0 premiums

More than 77% of MA and MAPD enrollees in 2025 were enrolled in plans with $0 premiums. While this trend largely continues, there are signs of movement away from those plans, particularly in the preferred provider organization (PPO) market. The number of $0 PPO products is dropping from 1,145 in 2025 to 991 in 2026 due to carriers closing plans or adding premiums as they face challenges maintaining profitability in these low-cost PPO plans.

Many members in non-$0 premium plans will face higher premiums. Among roughly 4 million MA and MAPD enrollees in non-$0 premium plans continuing into 2026, 2.8 million will see an increase in their monthly premium in 2026, averaging about $16 more per month.

Members experience higher cost sharing

Plan design changes will also lead to increased cost sharing for members. Carriers are weighing strategic decisions on which plan benefits they will increase, as each has an impact on plan attractiveness, risk selection, and financial impacts. Key components include:

• Maximum in-network out-of-pocket expense (MOOP): Total amount a member could pay if they have a high utilizing year.
• Copays / Co-insurance: Amount members have pay out of pocket for a primary care or specialist visit. While plans can use copays to offset plan costs, lower copays can also incentivize visits to lower cost sites of care.
• Medical Deductibles: The amount a member has to pay before their plan benefits are covered. Historically, most plans have had $0 Part C deductibles.

In our analysis of 2026 changes, the most significant increases are seen in MOOP. While 16% of members across all plan and premium types in continuing plans will see a reduction, 43% will see an increase. In aggregate, the enrollment-weighted average MOOP for continuous plans will be $4,970, about $490 higher than the 2025 average. New plans launching in 2026 have an average of $6,160, driving the average out of pocket expense for members up even higher. This shift will not only result in higher medical costs but could make those plans less attractive.

Copays are expected to stay relatively flat year over year. For primary care, only 7% of members in 2026 continuing plans enrolled in a non-zero copay or coinsurance plan compared to 10% in 2025. The trend towards $0 copays is expected to continue since they encourage preventive care and early interventions, which can reduce expensive acute episodes and hospitalizations. Both are beneficial for members’ health and plan cost management. For specialist visits, the average copay ticked up slightly from $31 in 2025 to $32 in 2026.

Fewer plans in 2026 are offering medical deductibles. Roughly 2.3 million enrollees, about 6% of members, are in plans with a non-zero medical deductible. That’s down from 12% last year. Plans have decided to deploy other benefit changes in lieu of increasing medical deductibles.

Shifts in prescription drug benefits

Following drug trend pressures and policies like the Inflation Reduction Act, plans nationwide are adjusting prescription drug deductibles. Prior to 2025, $0 drug deductibles were commonplace with over 2,300 non-special needs plans (SNP) MAPD plans — 66% — offering them in 2024. This number was nearly cut in half with in 2025 just over 1,200 non-SNP MAPD plans offering a $0 deductible. For 2026, there are fewer than 500.

Many plans are also moving towards offering the maximum deductible. In 2026, 34% of non-SNP MAPD plans will offer the maximum $615 prescription deductible, up from 21% in 2025, and only 6% in 2024. Across all non-$0 deductible plans, the vast majority continue to apply only to brand and specialty tiers.

We expect these patterns to continue as plans face potential selection risk if they are the last plan remaining at a $0 drug deductible in their market. As such, drug deductibles may become an area where plans all begin to consolidate around maximum levels and choose not to differentiate their products via this benefit. This could lead to less variation in the market as plans continue to move closer to the defined standard benefit design.

Prescription drug deductibles have always been more prevalent in the standalone PDP market compared to MAPD. However, the number of PDP plans offering $0 deductible has decreased for the upcoming year. In 2026, only 40 PDP plans will offer $0 deductible, a reduction from 80 plans in 2025. The result is 11% of PDPs will have a $0 deductible in 2026 and 70% will offer the maximum Centers for Medicare and Medicaid Services deductible. PDP benefits, on average, are likely to remain less rich than MAPD Part D benefits in most markets.

Supplemental benefits as growth engines

Over the last several years, supplemental benefits have helped generate member growth, with many plans increasing the breadth and amount offered to beneficiaries in areas like dental and over-the-counter (OTC) allowances. That trend is starting to reverse as plans weigh the tradeoffs between member growth and costs of these supplemental benefit programs.

In 2026, several plans pulled back on offering dental allowances, with 25% of MA members — about 5.4 million people — enrolled in continuing plans without dental allowances in 2026, compared to 19% last year. For members enrolled in plans that retained dental allowances, the average dental allowance dropped from $2,378 in 2025 to $2,107 in 2026.

OTC allowances dropped from $308 per year in 2025 to $270 in 2026. OTC coverage is also being removed from several plans entirely: 8 million enrollees — 40% of all MA and MAPD enrollees — are enrolled in plans continuing in 2026 that will have OTC benefits reduced or eliminated in 2026 versus 2025. That means 59% of members in continuous 2025-2026 plans are enrolled in plans offering OTC benefits in 2026 compared to 71% in 2025.

Pulling back on these benefits may impact shopping decisions for members and potentially drive member risk selection for plans.

The impact on affordability

The Medicare Advantage landscape in 2026 is clearly shifting — from fewer $0 premium options to targeted increases in cost sharing and the reduction of supplemental benefits — forcing beneficiaries and payers to rethink what affordable coverage really means. This tightening market, combined with insurers’ divergent strategies and increasing out-of-pocket costs, signals that simple price comparisons no longer suffice. Members will need to be more discerning, weighing plan benefits holistically rather than focusing solely on premiums. Carriers will need to closely assess implications of this new normal. Evaluating membership shifts and tracking ongoing utilization trends will be critical to inform product decisions for contract year 2027 as payers continue to develop and assess strategies to support long-term sustainability in Medicare Advantage.