A 68-year-old opens her Annual Notice of Change in late September and sees the monthly premium on her standalone Part D drug plan jumping from $42 to $58 for the coming year. She remembers reading headlines that Medicare had limited Part D premium increases. So why is her bill rising by more than a third?
Because the limit she read about applies to a Medicare benchmark used for program calculations, not necessarily to the premium charged by her specific drug plan. Confusing those two numbers is one of the most common misunderstandings during Annual Enrollment.
What the 6% cap actually protects
The Inflation Reduction Act limits annual growth in the Part D national base beneficiary premium to 6%. That base figure is the number CMS uses internally to calculate the government’s subsidy to drug plans, the late-enrollment penalty, and the Part D income-related surcharges (IRMAA). For 2026 the national base beneficiary premium is $38.99.
Your actual plan premium is a different number entirely. Each insurer that sells a standalone Part D plan or a Medicare Advantage plan with drug coverage sets its own monthly premium, deductible, formulary tiers, and pharmacy network. Those choices are filed with CMS, but they are not held to the 6% ceiling. A plan can raise its premium 20%, 30%, or more from one year to the next, drop a drug from its formulary, move a pharmacy out of the preferred tier, or change copay structures. None of that triggers the cap, because the cap was never aimed at it.
The cap also does not protect anyone from the Part D IRMAA surcharge stacked on top. A single filer with modified adjusted gross income above $109,000 (or a couple above $218,000) pays a Part D surcharge ranging from $14.50 to $91.00 per month on top of the plan premium in 2026. That surcharge runs through Social Security based on a two-year income lookback, separate from anything the insurer does.
Why premiums are moving faster than the headline
Drug-plan pricing reflects a mix of factors that the benchmark premium cap does not control. Healthcare costs continue to rise, prescription drug spending remains volatile, and insurers have adjusted their pricing in response to changes made by the Inflation Reduction Act, including the redesigned Part D benefit and the annual out-of-pocket cap for beneficiaries. The result is that an individual plan’s premium can move very differently from the national base beneficiary premium.
Meanwhile, the 2026 Social Security cost-of-living adjustment came in at 2.8%, and the standard Part B premium rose to $202.90, an increase of $17.90 from $185.00 in 2025. A Part D plan that raises its premium $15 a month can quietly consume a meaningful share of the COLA before a beneficiary notices.
The auto-renewal trap
If a Part D enrollee does nothing during the Annual Enrollment Period, which runs October 15 through December 7, the plan rolls forward at next year’s terms. Same plan name, often the same ID number, but potentially a higher premium, a different deductible, a reshuffled formulary, and a narrower pharmacy network. The Annual Notice of Change mailed by late September spells out every adjustment. Most people skim it or recycle it.
Re-shopping every year matters because the plan that was cheapest for a specific list of prescriptions in 2025 is rarely still the cheapest in 2026. A drug moved from Tier 2 to Tier 3 can add hundreds of dollars in copays. A formulary removal can mean paying full retail or switching medications.
What to do
- Read the Annual Notice of Change when it arrives in late September. Compare next year’s monthly premium, annual deductible, and tier placement for every drug on your current prescription list against this year’s plan.
- Run your exact medication list through the Medicare Plan Finder at Medicare.gov during the October 15 through December 7 window. Sort by total annual cost rather than by premium alone. The cheapest premium often pairs with the highest copays.
- If your modified adjusted gross income is within $10,000 of an IRMAA threshold, model the Part D surcharge alongside the premium. A plan switch that saves $20 a month means little if a separate income decision pushes you into the next surcharge tier.
Sources: CMS 2026 Medicare Parts A & B Premiums and Deductibles fact sheet (November 14, 2025); Social Security Administration 2026 COLA; Bureau of Economic Analysis PCE price indexes. Figures reflect the 2026 plan year.
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