Medicare changes frequently. Having a new presidential administration in office could have a significant impact on the federal health insurance program.
In the second of two parts in this series, we focus on what the new administration could mean for Medicare.
Changes to the Medicare drug price negotiation program
Early action from the new presidential administration looks to modify the Medicare Drug Price Negotiation Program, established by the Inflation Reduction Act, to create lower drug prices for Medicare enrollees.
The first round of price negotiations began in 2023 and included 10 medications, such as diabetes drug Januvia and cancer drug Imbruvica. The negotiated prices are set to go into effect Jan. 1, 2026. The discounts range from 79% to 38%. The prices were negotiated under the previous administration, but they are still expected to go into effect under the new administration.
The next cycle of negotiations includes 15 drugs and is slated to start this year. New prices would go into effect Jan. 1, 2027. The second round includes the popular GLP-1 medications Ozempic and Wegovy.
In April, the president signed an executive order directing the Department of Health and Human Services to work with Congress on a change to the drug negotiation program that would allow small molecule drugs (like pills) to be on the market longer before they can be selected for Medicare price negotiations, similar to biologics such as vaccines.
The pharmaceutical industry has been advocating for this change, which it says will spur investment in small-molecule drugs. However, the research policy institute KFF says it could result in higher costs for patients because it would give drug companies more time to set their own prices.
Any changes to the Medicare drug price negotiation program could affect how much current and future enrollees pay for their prescriptions. The previous presidential administration estimated the program would have generated $6 billion in savings in 2023 had the negotiated prices been in effect that year.
A bigger spotlight on Medicare Advantage
Medicare Advantage is likely to be an important topic under the new administration.
The program has seen a steady increase in enrollment over the past two decades. In 2024, 32.8 million people, or 54% of the eligible Medicare population, were enrolled in a Medicare Advantage plan, according to KFF.
However, rising costs are a major concern. In 2025, the federal government will spend $84 billion more on Medicare Advantage enrollees than it would if those patients were enrolled in Original Medicare, according to the Medicare Payment and Advisory Commission.
In April, CMS announced plans to increase the average payments to Medicare Advantage plans by roughly 5% in 2026. That marks the largest rate increase of the past decade, even as major insurers have already been grappling with higher costs associated with Medicare Advantage plans.
Breaking down the complications of Medicare
With changes to Medicare and the administration’s focus, it can be difficult to decipher and make sense of so much information.
Our UROne Benefits® team can help educate your employees about Medicare and provide them with customized health insurance recommendations based on their health needs and budget.
Click here to read the first part of this series.
For more information, contact Nicki Miklos at nmiklos@oswaldcompanies.com or fill out this form.