CNC · 10-Q · 2026Q1 · Full report

Medicare Part D changes

CENTENE CORP · 2026-04-28 · Importance 74 · Surprise 84

The Inflation Reduction Act materially changed Medicare Part D starting in 2025, including elimination of the coverage gap and capping members' annual out‑of‑pocket costs at $2,100 in 2026, shifting cost‑sharing among members, manufacturers, CMS and PDPs. These changes resulted in significant premium increases for Centene's stand‑alone PDPs and prompted CMS to introduce the Medicare Part D Premium Stabilization Demonstration program (began 2025, intended to run up to three years) and other transitional supports. For 2026 CMS eliminated narrowed risk corridor thresholds used in 2025 and created a Drug Subsidy to compensate plans for loss of Manufacturer Discount Program effects for certain drugs, changing financial risk‑sharing for PDPs. Centene has receivables due from CMS for 2025 Part D risk‑sharing programs that it expects to be paid within a year after the plan year closes and warns that delayed payments from CMS could materially adversely affect cash flows.

Key facts

• Starting in 2026, CMS created a Drug Subsidy to compensate plans for the loss of the Manufacturer Discount Program for maximum fair price drugs.
• The IRA eliminated the Part D coverage gap and capped members' annual out-of-pocket costs at $2,100 in 2026.
• CMS introduced the Medicare Part D Premium Stabilization Demonstration program that began in calendar year 2025 and was intended to exist for three years with parameters expected to differ each year; in 2026 CMS eliminated narrowed risk corridors used in 2025.

Impact estimates