Centers for Medicare & Medicaid Services 2026 Final Rule & Rate Announcement

On April 4, 2025, CMS released its Final Rule for Contract Year 2026 which introduced and codified significant changes to Medicare Advantage (MA), Medicare Part D, PACE and Cost Plans and continued its commitment to enhancing beneficiary protections, reducing cost and improving care coordination across Medicare and Medicaid programs.  

While this rule may not have finalized or addressed all provisions from the previously released proposed rule leaving plenty to be addressed in future rulemaking, it wasn’t a complete nothingburger as it did make changes and codify existing guidance related to prescription drugs, duals, Star Ratings, and more. Our team has summarized some of the key provisions (what’s in and what’s out) from this Final Rule and will continue our efforts to monitor and review subsequent proposals and interim rules throughout the year(s) ahead.  

Part D Provisions  

Vaccines
Codified section 11401 of the Inflation Reduction Act (IRA), effective for plan years beginning on or after January 1, 2023, the Part D deductible shall not apply to, and there is no cost haring for adult vaccines recommended vaccines covered under Part D.  

Insulin
Codified section 11406 of the IRA to require the Part D deductible shall not apply to covered insulin products and the Part D cost sharing amount for a one-month supply of each covered product just not exceed $35 

Medicare Prescription Payment Plan (M3) 
Finalized requirements for 2026 and future years as proposed with a few exceptions including but not limited to: timing updates to notifications of automatic renewals, modifications to telephonic notice of program election, modified requirements for voluntary and involuntary terminations from the program, and changes to Long Term Care (LTC) pharmacies and outreach to Dual Eligible Special Needs (DSNP) beneficiaries.  

Anti-Obesity Medications 
After CMS consideration to expand Part D coverage, these medications will continue to be excluded from Part D coverage, pending additional analysis and future rulemaking.  

Dual Eligible Provisions 

Applicable Integrated Plans (AIP) 
Finalizing new requirements for AIP DSNP plans to provide integrated materials such as member ID cards; and to conduct integrated Health Risk Assessments (HRA) for both the Medicare and Medicaid in lieu of one for each program.  

Health Equity

Rebranding of HEI 
CMS has rebranded the Health Equity Index (HEI) and its related reward for Star Ratings to Excellent Health Outcomes for All (EHO4All) but essentially left the underling structure and methodology unchanged for now noting it will consider other changes to be made through future rulemaking.   

Potential Future Changes 

CMS did not move forward with plans to analyze utilization management policies and procedures related to health equity or requirements for MA plans to provide culturally and linguistically appropriate services. However, it will continue to review regulations to ensure alignment with Executive Order 14192, “Unleashing Prosperity Through Deregulation.”  

Star Ratings Measures 

Breast Cancer Screening 
To better align with updated recommended screening ages, CMS will extend the current screening age from 50 – 74 to include beneficiaries 40 – 49. This change will increase the eligible population and therefore be considered substantive therefore this change will not impact Star Ratings until 2029 (2027 measurement year).  

Benchmark Payments 

Rate Increase 
CMS finalized a 5.06% increase in benchmark payments to Medicare Advantage plans for 2026 calendar year. This increase is attributed to the rise in the effective growth rate and projected to result in over $25 billion in MA payments.  

While the US healthcare landscape is ever evolving and we await future changes, proposals, and interim rules, the above changes and provisions signal CMS’s continued commitment to accountability, protection, and support for beneficiaries. For health plans, providers, and stakeholders, there is no time better than the present to align your strategies with current and potential policy changes. Be nimble, be transparent, have a plan A, B, and even C for how you will communicate performance, successes or failures and needs to your leadership teams. And lean on your vendor partners and industry peers for support.  

Links to Federal Register Documents:
https://public-inspection.federalregister.gov/2025-06008.pdf
https://www.govinfo.gov/content/pkg/FR-2025-04-15/pdf/2025-06008.pdf