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2026 Medicare Part D Bid Information and Part D Premium Stabilization Demonstration Parameters

On July 28, 2025, the Centers for Medicare & Medicaid Services (CMS) released preliminary technical Medicare Part D bid information for contract year (CY) 2026 to help Part D plan sponsors finalize their Part D and Medicare Advantage (MA) offerings and prepare for Medicare Open Enrollment.

As part of its annual bid review process, CMS took unprecedented action to hold standalone prescription drug plan (PDP) sponsors accountable for significant year-over-year premium increases. CMS exercised its full statutory authority to successfully negotiate bid terms and conditions and, when necessary, deny standalone PDP bids that include unacceptable, significant increases in cost sharing or reductions in benefits. Following these negotiations, CMS approved some revised bids and, for the first time, rejected standalone PDP bids that failed to address concerns regarding significant year-over-year premium increases and that were also market outliers compared to similar plans in the same region. CMS is committed to upholding affordability, choice, and access for Medicare beneficiaries while safeguarding taxpayer dollars. As shown by the outcome of our bid negotiations, we are taking strong, proactive measures to ensure sponsors that choose to participate in the Medicare program by offering standalone PDPs are aligned with these goals, and we will continue to exercise CMS’ bid negotiation authority again in future years.

Additionally, CMS is releasing updated parameters for CY 2026 for the voluntary Part D Premium Stabilization Demonstration (first implemented in 2025) to continue to support implementation of the redesigned Part D benefit and improve stability for people with Medicare in 2026. As in past years, CMS will release the 2026 MA & Part D Landscape in mid-to-late September, once all offerings are finalized. In addition, CMS will release final average MA and Part D premiums, along with other key information, in September with the MA & Part D Landscape.

National Average Monthly Bid Amount & Government Subsidy

The national average monthly bid amount (NAMBA) is an enrollment-weighted average of all applicable Part D plan bids for basic Part D benefits, with weights based on the number of enrollees in each plan. The NAMBA is used to calculate the government subsidy to plans.

In 2026, the NAMBA will be $239.27.

Base Beneficiary Premium for 2026

The national base beneficiary premium is the starting point for calculating a plan-specific basic Part D premium. This value is calculated per a statutory formula, using a percentage of bids and estimates of reinsurance costs submitted by certain Part D plans for the statutory minimum level of coverage Part D plans are required to provide (known as the “basic” benefit).

Between 2024 and 2029, the annual increase in the base beneficiary premium is capped by the Inflation Reduction Act’s (IRA) premium stabilization provision, not to exceed 6% per year.

For 2026, the base beneficiary premium will be $38.99.

Information on the Voluntary Part D Premium Stabilization Demonstration

Overview

In 2025, CMS implemented the voluntary Part D Premium Stabilization Demonstration to test whether additional policy changes would stabilize year-over-year changes in premiums for participating standalone PDPs, leading to more predictable options for beneficiaries during the initial implementation of the IRA benefit redesign, creating more gradual enrollment changes, and allowing participating Part D sponsors to accumulate the experience necessary for bidding in future years. The demonstration was designed for one year with the following parameters: a uniform reduction of $15 to the base beneficiary premium, a year-over-year increase limit of $35 on a plan’s total Part D premium, and narrowed risk corridors. The demonstration design also allowed for CMS to continue the demonstration for subsequent years, with parameters to be adjusted to reflect market conditions and variation in those years.

For 2026, Part D plan sponsors have built experience and are better equipped to understand and predict how the IRA benefit changes will affect utilization and costs. To reflect these changes in market conditions, CMS is releasing updated parameters for the second demonstration year. In 2026, CMS is reducing the uniform base beneficiary premium reduction from $15 to $10, increasing the increase limit on a plan’s total Part D premium from $35 to $50, and eliminating the narrowed risk corridor thresholds. By reducing the amount of premium stabilization from the government in 2026, we are facilitating the program’s return to operating under regular market conditions.

Eligibility

The demonstration is voluntary and nationwide. Part D sponsors of standalone PDPs, including Employer Group Waiver Plans (EGWPs), that participated in the demonstration in 2025 will have the opportunity to participate in 2026. Because EGWPs do not submit bids, they are only eligible for the uniform base beneficiary premium reduction of $10 and not the year-over-year premium increase limit of $50.

Part D sponsors that did not participate in the demonstration in 2025 are not eligible to participate in 2026. Notably, this restriction does not apply to: (1) new plan benefit packages (PBPs) offered by a Part D sponsor that participated in 2025 and opts to participate in 2026; or (2) new Part D sponsors entering the Part D market for the first time in 2026 and opting to participate in 2026.

As in 2025, Part D sponsors must include all plans under each of their standalone PDP contracts in the demonstration if they participate in 2026. In addition, Part D sponsors with multiple standalone PDP contracts must include all contracts in the demonstration if they choose to participate.

Next Steps

Part D sponsors of eligible PDPs must inform CMS of their intent to participate in the voluntary Part D Premium Stabilization Demonstration for CY 2026 via the Health Plan Management System (HPMS). CMS will release premiums to Part D sponsors for all eligible standalone PDPs based on submitted bids and as they would be under the demonstration on Monday, July 28, 2025. Part D sponsors can inform CMS of their participation starting Monday, July 28, 2025, through Monday, August 4, 2025, at 11:59 PM PDT.

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CMS News and Media Group Catherine Howden, Director Media Inquiries Form 202-690-6145