Medicare Part D Premiums See Modest Drop in 2026, But PDPs Remain Costlier Than MA-PDs
The average monthly premium for standalone Medicare Part D prescription drug plans (PDPs) fell 7% in 2026, dropping from $39 to $36, according to data from the Centers for Medicare & Medicaid Services (CMS). This decline follows the Biden administration’s 2024 premium stabilization demonstration, which was extended by the Trump administration in 2025. Despite the reduction, PDPs still cost significantly more than Medicare Advantage plans with drug coverage (MA-PDs), with enrollees paying 4.5 times more on average, according to a March 2026 analysis by the Kaiser Family Foundation (KFF).
Why Are PDP Premiums Still Higher Than MA-PDs?
While the average PDP premium decreased to $36 in 2026, the average monthly cost for drug coverage in MA-PDs was $8, according to KFF. This disparity stems from structural differences between the two plans. MA-PDs, which bundle Medicare Part A and B with drug coverage, often use rebates from pharmaceutical companies to offer zero-premium drug plans. These rebates have tripled since 2015, exceeding $2,600 per beneficiary annually, per CMS data.
“The premium stabilization program has helped curb rising PDP costs, but the underlying structure of MA-PDs allows for much lower premiums,” said a CMS spokesperson. “This reflects the unique financial incentives in the Medicare Advantage model.”
How Do Plan Types Affect Premiums?
PDP premiums vary widely based on plan generosity. Enhanced plans, which offer lower cost-sharing or better formulary coverage, had an average premium of $39 in 2026, compared to $31 for basic plans. Only 4% of PDP enrollees had zero deductibles, but those plans averaged $127 per month, according to KFF. In contrast, 94% of MA-PD enrollees were in enhanced plans, with minimal premium variation.
“Enhanced plans in the PDP market come with higher costs, while MA-PDs leverage rebates to keep premiums low,” said Dr. Rachel Zuckerman, a health policy analyst at the University of Michigan. “This creates a stark divide in affordability for beneficiaries.”
Why Do So Few PDP Enrollees Have Zero Premiums?
Only 28% of PDP enrollees without low-income subsidies (LIS) paid no premium in 2026, compared to 79% of MA-PD enrollees. Wellcare Value Script and Humana Basic Rx were the top zero-premium PDPs, available in select regions. However, 35% of non-LIS PDP enrollees paid between $1 and $29 monthly, while 20% paid $100 or more, KFF data shows. In contrast, less than 1% of non-LIS MA-PD enrollees faced premiums above $100.
“The lack of zero-premium options in PDPs leaves many beneficiaries exposed to high out-of-pocket costs,” said a KFF spokesperson. “This highlights the need for greater transparency in plan pricing.”
What’s Next for Medicare Drug Costs?
The premium stabilization program, set to expire in 2027, remains a point of contention. Advocacy groups argue that extending it could further stabilize PDP costs, while industry analysts warn of potential trade-offs. “The current system favors MA-PDs, but policymakers must ensure PDPs remain viable options for beneficiaries,” said Dr. Natalie Singh, a board-certified internal medicine physician and health editor.
As beneficiaries navigate 2026 enrollment, the stark contrast between PDP and MA-PD costs underscores broader debates over Medicare reform. With prescription drug spending expected to rise, the pressure on Congress to address affordability will likely intensify.