Home CMS Final Rule 2026: What Medicare Agents Need to Know About Payment, Compliance, and Plan Changes

CMS Final Rule 2026: What Medicare Agents Need to Know About Payment, Compliance, and Plan Changes

A Big Year Ahead for Medicare Agents

If you’re an independent agent working in the Medicare Advantage or Prescription Drug Plan (PDP) space, buckle up: CMS has finalized its policies and payment updates for Calendar Year 2026. These changes shape everything from how carriers design plans and calculate risk scores to how much funding they’ll receive to support benefits. In other words, this Final Rule impacts the products you sell, how you market them, and the way you serve your clients.

Let’s break down what you need to know in plain English, with clear figures, percentages, and dollar amounts to help you prepare for the 2026 sales season.

1. Bigger Payments = Stronger Plan Benefits

Every year, CMS adjusts how much they pay insurance companies to offer Medicare Advantage plans. For 2026, they are increasing that amount by an average of 5.06% per person. This is a higher increase than we saw in 2025, which means more money is flowing into the system.

Here are the components of this increase:

  • Effective Growth Rate: +2.44% (reflects general trends in Medicare)

Why this matters to agents: When plans receive more money from CMS, they often use it to improve benefits like dental, vision, OTC allowances, or to offer $0 premiums. This can make your job easier by giving clients more attractive options to choose from.

2. Part D Changes: New Cap, Same Great Savings

Medicare Part D helps cover prescription drugs. Each year, CMS updates the deductible (what a client pays before coverage kicks in) and the maximum True-out-of-pocket (TrooP) amount (the most they will pay before their costs drop to $0 for covered drugs).

For 2026:

  • Deductible: Increases from $590 (2025) to $615 (2026)
  • TrooP Cap: Increases from $2,000 (2025) to $2,100 (2026)

Based on inflation, this is a small change, but it’s important to explain to clients so that they will not have any surprised in January of next year.

Plus, don’t forget these IRA (Inflation Reduction Act) benefits remain in place:

  • Insulin copays are capped at $35/month
  • Vaccines like shingles or Flu are free
  • Some high-cost drugs will have price reductions due to Medicare negotiations

Agent tip: Even with a $100 increase in the OOP cap, clients are still saving compared to the pre-IRA days which included the coverage gap and 5% catastrophic phases of coverage. Reinforce the continued value of Part D coverage and the benefits of the IRA’s changes.

3. Risk Adjustment Updates: Accuracy Overhaul Complete

Risk adjustment is a system CMS uses to fairly pay insurance companies based on how sick or healthy their enrolled members are. It’s designed to prevent plans from only going after healthy people (who are cheaper to insure) and ensures that plans who enroll patients with serious health issues (who may generate higher medical costs) get paid more appropriately.

Here’s why this matters to you:

  • A plan with more chronically ill members (like those with diabetes, heart disease, or COPD) gets higher payments from CMS because they are expected to spend more on care.
  • A plan with healthier enrollees gets lower payments from CMS because the cost of care is expected to be lower.

For 2026, CMS is fully switching to a new, more accurate version of this model, called the 2024 CMS-HCC risk adjustment model. This model was phased in gradually starting in 2024, but in 2026, it will be used 100% for determining Medicare Advantage (MA) plan payments.

Key change for 2026:

  • 100% of MA plan risk scores will be calculated using the updated 2024 CMS-HCC model. (In 2024 and 2025, it was a mix of the old and new models.)

This new model uses more current data and updated diagnosis groupings that reflect today’s medical landscape, which improves the accuracy of predicting how much care a patient will need.

What this means for agents:

  • Some plans may adjust their benefits if they expect to be paid more or less under the new model.
  • You might see changes in Special Needs Plans (SNPs) or plans serving dual-eligible and chronically ill members.
  • Plans with strong documentation and care coordination may benefit the most, which can lead to better benefits or more stability in premiums.

Bottom line: The updated risk adjustment model should make the system fairer and more accurate, but agents should stay alert to changes in how their favorite plans adjust offerings in 2026.

4. Star Ratings: What’s New in 2026

CMS Star Ratings are a way for consumers to evaluate the quality of Medicare Advantage and Part D plans. Ratings range from 1 to 5 stars and are based on over 40 performance measures in areas such as customer service, member experience, care coordination, and clinical outcomes. But Star Ratings also do more than guide consumers—they directly impact how much money CMS gives plans through bonus payments.

Here’s what agents need to know for 2026:

  • New Measure Added: Kidney Health Evaluation for Patients with Diabetes – This new quality measure will assess whether plans ensure that diabetic members receive appropriate screening for kidney disease. Plans will be rated on whether they perform this evaluation consistently, which can impact their overall Star Rating.
  • Returning Measures (with Adjusted Weight): Two previously removed outcome measures—Improving or Maintaining Physical Health and Improving or Maintaining Mental Health—are being reintroduced. In 2026, they will have a weight of 1, meaning they won’t drastically impact overall ratings yet. But in 2027, they will be weighted more heavily (weight of 3), so plans are expected to start focusing on these now.
  • Reduced Weight of Member Experience Surveys: Over the past few years, surveys like CAHPS (which ask members about their satisfaction with their plan and providers) were weighted 4 times higher than other metrics. This led to many plans seeing their star ratings drop, even if their clinical care was strong. Starting in 2026, these survey-based measures will be reduced to 2 times weight, which means clinical performance (like managing blood pressure, controlling diabetes, or follow-up care) will play a larger role in Star Ratings again.

Why this matters to agents:

  • Plans with 4+ stars qualify for Quality Bonus Payments (QBPs), which increase their funding and often result in better benefits for enrollees (like dental, vision, OTC cards, or lower premiums).
  • A 5-star plan allows year-round enrollment through a Special Enrollment Period (SEP). This is a major marketing tool if available in your area.
  • More balanced weighting means plans that were “dinged” unfairly due to surveys now have a better shot at regaining a 4-star rating, especially if their clinical metrics are strong.

Agent insight:

  • Expect some plans to rise in the Star Ratings due to this rebalancing, especially if they’ve been investing in care quality.
  • Use updated Star Ratings when helping clients evaluate plans—these ratings directly reflect how well a plan is performing in key areas.
  • Track Star Rating updates in October 2025 to guide which plans you promote during AEP 2026.

5. Part D Risk Model: Now IRA-Ready

CMS updated the risk adjustment model it uses to calculate how much to pay plans offering Part D prescription drug coverage. These changes reflect the savings and structure introduced by the Inflation Reduction Act (IRA), and they are designed to better align payment with how much care a plan’s members are likely to need.

What’s new for 2026:

  • CMS will use an updated model that incorporates 2022 medical diagnoses and 2023 prescription drug cost data.
  • This model also includes assumptions about the lower drug costs expected from the Medicare drug price negotiation program—a new provision under the IRA.

Could this lower Part D premiums? Yes—potentially. Here’s how:

  • When plans feel more confident that they will receive appropriate funding to cover higher-risk members, they’re less likely to overinflate premiums as a cushion against uncertainty.
  • If a plan has better visibility into its expected reimbursement based on improved modeling, it can set its premiums more accurately—and possibly lower them to stay competitive in the market.

However:

  • While the improved risk model supports financial stability, it’s not a direct command to lower premiums. Other factors like reinsurance costs, pharmacy benefit manager (PBM) negotiations, and plan design decisions will also influence 2026 Part D premiums.
  • In 2025, CMS put guardrails in place (like risk corridors) to help stabilize premiums due to the IRA changes. In 2026, those guardrails are relaxed, meaning plans are now expected to price accurately with less CMS intervention.

Agent tip:

  • Watch for plans lowering premiums slightly or improving cost-sharing structures on certain drugs in 2026.
  • Educate clients on the impact of Medicare price negotiation and why some previously expensive medications may now cost less.
  • Keep an eye out during bid season (June–July) and plan previews (August–September) for how each carrier is responding to the updated model.

6. Compliance Reminders: Stay Above Board

CMS continues to place heavy emphasis on protecting Medicare beneficiaries from misleading marketing and improper sales practices. As a result, there are several critical compliance rules that all agents must follow when marketing and selling Medicare Advantage and Part D plans in 2026.

Key Compliance Requirements:

  • TPMO Disclaimer
    Any agent or agency considered a “Third-Party Marketing Organization” (TPMO) must include a specific disclaimer in all:
    • Marketing materials (digital and print)
    • Websites
    • Phone calls (verbal disclosure)
    • Emails and social media

Here is the full required disclaimer:
“We do not offer every plan available in your area. Currently, we represent X organizations which offer X products in your area. Please contact Medicare.gov, 1-800-MEDICARE (TTY users call 1-877-486-2048) 24 hours a day/7 days a week, or your local State Health Insurance Program (SHIP) to get information on all of your options.”

  • Verbal disclosures must be made:
    • Within the first minute of a phone call
    • During all marketing calls—even if the client is already working with you
  • Call Recording: All sales-related phone calls (inbound and outbound) must be recorded and retained for 10 years. This applies to:
    • Lead generation calls
    • Initial outreach
    • Scope of Appointment discussions
    • Benefit reviews and enrollment calls
  • Scope of Appointment (SOA)
    • Agents must obtain an SOA at least 48 hours before the appointment, unless:
    • The appointment is scheduled within 48 hours of the end of a valid election period
    • The beneficiary requests an earlier appointment and documents it
  • Required Phone Number Disclaimer
    • Any time a phone number is listed—whether in print, digital ads, on your website, or on direct mail—it must include the following disclaimer next to it:
      • “By calling the number above, you will be connected to a licensed insurance agent.”
    • Additionally, if your materials or website reference a phone number, you must also include:
      • TTY: Always display as TTY: 711
      • Office Hours: Clearly state the hours during which your agency is available to take calls (e.g., Monday–Friday, 9 AM to 5 PM EST)

Key Takeaways

  1. Understand the Key Numbers:
    • MA payment increase: +5.06%
    • 2026 Maximum Part D deductible: $615
    • Part D True-out-of-pocket (TrooP): $2,100
  2. Audit Your Compliance:
    • Is your TPMO disclaimer everywhere?
    • Are calls being recorded and saved?
    • Are SOAs collected and stored correctly?
  3. Get Certified and Trained:
    • Complete AHIP and carrier trainings early so you can focus on plan benefits when they roll out.
    • Attend your 2026 rollout events
  4. Start Educating Clients:
    • Send a fall newsletter and call your clients to discuss plan changes on October 1st. (Remember: discussion of 2026 benefits is prohibited before 10/1)

Need Support? Lourie Life & Health Is Here to Help

At Lourie Life & Health, we give you everything you need to stay ahead of CMS updates. From training and plan previews to compliance tools and marketing resources, we’re here to support your growth and protect your book of business.

Contact us today to get ready for the 2026 Medicare sales season.

Sources: CMS Announcement of Calendar Year 2026 Medicare Advantage Capitation Rates and Part C & D Payment Policies (April 2025)

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