WASHINGTON, D.C. — In a rare and assertive regulatory move, the Centers for Medicare & Medicaid Services (CMS) has exercised its statutory authority to reject certain standalone prescription drug plan (PDP) bids for the 2026 contract year that featured significant premium increases or reduced benefits. The agency’s decision marks the first time it has denied bids on these grounds, signaling a firmer stance in protecting affordability and access for Medicare beneficiaries.
The preliminary Medicare Part D bid data, released on July 28, provides an early look at the financial benchmarks that will shape plan offerings during the upcoming Medicare Open Enrollment period. As part of its annual review, CMS confronted several PDP sponsors whose submissions included year-over-year premium spikes that exceeded acceptable thresholds and deviated from regional market norms. Some of these bids were revised and approved following CMS intervention, while others were rejected outright.
“CMS is committed to upholding affordability, choice, and access for Medicare beneficiaries while safeguarding taxpayer dollars,” the agency stated. Officials noted that this proactive approach will continue in future years as part of a broader strategy to ensure alignment between plan sponsors and the goals of the Medicare program.
Stabilizing Premiums Amid Policy Transitions
CMS is also updating its Part D Premium Stabilization Demonstration, a voluntary program launched in 2025 to help ease the market transition prompted by the Inflation Reduction Act’s (IRA) redesign of the Part D benefit. In 2026, CMS will reduce the uniform base beneficiary premium subsidy from $15 to $10 and raise the cap on year-over-year premium increases from $35 to $50 for participating plans. In addition, the agency will eliminate narrowed risk corridor thresholds that were in place in the first demonstration year.
These changes reflect growing confidence that plan sponsors have gained the necessary experience to operate under standard market conditions while still cushioning enrollees from abrupt premium volatility.
Key Benchmarks for 2026
- National Average Monthly Bid Amount (NAMBA): The enrollment-weighted average bid across all Part D plans for basic coverage will rise to $239.27. This figure plays a central role in calculating federal subsidies to plans.
- Base Beneficiary Premium: For 2026, the national base beneficiary premium is set at $38.99, up modestly due to premium stabilization caps implemented under the IRA, which limit annual increases to no more than 6%.
CMS will release finalized information on 2026 Medicare Advantage (MA) and Part D plan offerings, including average premiums and benefit designs, in mid-to-late September once all submissions are reviewed and approved.
Eligibility and Demonstration Parameters
Participation in the 2026 Premium Stabilization Demonstration is restricted to Part D sponsors—including Employer Group Waiver Plans (EGWPs)—that joined the initiative in 2025. Exceptions are made for new plan benefit packages introduced by existing participants and new sponsors entering the market in 2026. EGWPs will remain eligible for the $10 premium subsidy but are excluded from the $50 premium increase cap due to differences in bidding structure.
Sponsors that participate must include all standalone PDPs under their contract and, if operating multiple contracts, must enroll all of them in the demonstration. This comprehensive participation requirement is intended to ensure consistency in plan offerings and financial stability across the Part D marketplace.
A More Active Regulatory Posture
This year’s actions mark a notable departure from past practice, in which CMS primarily relied on market dynamics and consumer choice to shape plan competition. By denying certain bids and adjusting demonstration parameters, CMS is signaling a more assertive posture in response to rising cost pressures and beneficiary concerns.
As Medicare Open Enrollment approaches, beneficiaries can expect more information on finalized offerings, but CMS’s early release of bid data and policy decisions provides a clear message: maintaining affordability and access will take precedence over unchecked pricing flexibility in the Part D marketplace.
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