Medicare · Supporting
How CMS shapes your Medicare coverage and costs
Last reviewed September 15, 20264 min readBy the Goodsurance editorial team Reviewed by the Goodsurance editorial team
The Centers for Medicare and Medicaid Services (CMS) is the federal agency inside the Department of Health and Human Services that administers Medicare, Medicaid, and the Children's Health Insurance Program (CHIP). Every premium amount, deductible, enrollment deadline, and coverage rule that Medicare beneficiaries navigate traces back to CMS regulations.
What CMS is and why it matters
CMS does not sell insurance. It sets the rules that govern what private insurance companies offering Medicare Advantage (Part C, the private alternative to Original Medicare) and Part D prescription drug plans must do, and it runs Original Medicare (Parts A and B) directly. If Medicare were a set of rules for a game, CMS wrote the rulebook and enforces it year to year.
How CMS sets what you pay
CMS announces Medicare cost figures annually, usually in the fall for the following calendar year. Those figures include premiums, deductibles, and coinsurance amounts across all parts of Medicare.
According to CMS, the standard Part B premium is $202.90 per month in 2026. Part B covers outpatient care, doctor visits, and preventive services. The annual Part B deductible is $283 in 2026; after that, Medicare pays 80% of the approved amount and you pay 20%, with no annual cap on that 20% in Original Medicare.
On the hospital side, the Part A inpatient deductible in 2026 is $1,736 per benefit period, not per year. A benefit period starts when you are admitted and ends after you have been out of the hospital or a skilled nursing facility (SNF) for 60 consecutive days, so two separate hospitalizations in the same calendar year can each trigger that deductible separately.
Prescription drug coverage falls under Part D, which has its own CMS-set cost limits. In 2026, no Part D plan may set a deductible above $615, and your total out-of-pocket spending on covered drugs is capped at $2,100 for the year. That cap, introduced by the Inflation Reduction Act and administered by CMS, replaced the coverage gap (sometimes called the donut hole) that existed in prior years.
The most you pay for covered Part D drugs in 2026.
How CMS rules affect Medicare Advantage and Part D plans
Private insurance companies offer Medicare Advantage and Part D plans under contracts with CMS. CMS sets the guardrails; plans compete inside them.
For Medicare Advantage, CMS caps how much plans can require you to pay out of pocket each year. In 2026, the federal in-network maximum out-of-pocket (MOOP) limit is $9,250. Plans may set lower limits. According to KFF, the 2026 enrollment-weighted average in-network MOOP is $5,421, meaning most enrollees are in plans that sit below the federal ceiling.
CMS also regulates how quickly plans must respond to prior authorization (PA) requests, which are approvals plans require before covering certain services or medications. Under CMS rule CMS-0057-F, effective January 1, 2026, a standard PA decision must come within 7 calendar days. Urgent requests require a decision within 72 hours, and any denial must include a specific reason.
On drug pricing, CMS oversees the Medicare Drug Price Negotiation Program created by the Inflation Reduction Act. Negotiated maximum fair prices for a second round of 15 selected Part D drugs take effect January 1, 2027.
Income-related adjustments and how CMS applies them
Higher-income beneficiaries pay more for Medicare through a surcharge called IRMAA (Income-Related Monthly Adjustment Amount). CMS uses a two-year lookback, meaning 2026 premiums are based on 2024 modified adjusted gross income (MAGI) that you reported to the IRS.
IRMAA applies to both Part B and Part D. In 2026, the surcharge begins for single filers with MAGI above $109,000 and for married couples filing jointly above $218,000. The structure is tiered, with higher earners paying progressively more through several income brackets. One dollar over a threshold moves you to the full next tier, a cliff structure that matters most for people near a line.
If your income has dropped significantly since the year CMS used, you can request reconsideration through the Social Security Administration within 60 days of receiving the IRMAA notice. Life-changing events such as retirement or the death of a spouse qualify for a new initial determination using a more recent income year.
If your income dropped since the year CMS used to set your premium, ask Social Security for reconsideration. Retirement, the death of a spouse, and similar life events may qualify you for a lower rate based on a more recent tax year.
CMS tools and resources you can use
CMS makes several free tools available directly to beneficiaries.
The Medicare Plan Finder at medicare.gov lets you compare Medicare Advantage and Part D plans side by side, including premiums, drug costs, and covered providers. The comparison uses your actual drug list and preferred pharmacy, so cost estimates are specific rather than generic.
The Medicare Coverage Database at cms.gov documents what Original Medicare covers and under what conditions, including local coverage determinations (LCDs) that apply only in your geographic area. If you and your doctor are uncertain whether a service will be covered, this database is the starting point for understanding what CMS authorizes.
CMS also publishes the annual Medicare and You handbook, mailed to all beneficiaries each fall and available at medicare.gov. The handbook is updated with current-year cost figures, enrollment periods, and coverage summaries.
To find out more about how these rules apply to your specific situation, please contact us to discuss plan options.
Common questions about IRMAA appeals
Quick answers, fast .
Tap any question to expand. Each links to a fuller standalone answer.
Does Medicare pay for hearing aids
Original Medicare does not cover hearing aids or fittings.
Some Medicare Advantage plans may include a hearing benefit, but what they cover varies by plan.
Does Medicare cover ambulance services?
Yes, in limited situations.
Medicare Part B covers emergency ambulance transportation when traveling any other way could endanger your health, taking you to the nearest appropriate hospital or facility. You pay 20% of the Medicare-approved amount after the $283 Part B deductible in 2026. Air ambulance is covered only when ground transport cannot reach you or would take too long. Non-emergency ambulance trips, for example to dialysis, are covered only when a doctor provides a written order stating they are medically necessary. Medicare does not cover ambulance rides taken purely for convenience.
Does Medicare cover skilled nursing facility care?
Yes, on a short-term basis.
Medicare Part A covers skilled nursing facility (SNF) care after a qualifying inpatient hospital stay of at least 3 days, when you need daily skilled care like nursing or therapy. In 2026 you pay $0 for days 1 through 20 of each benefit period, $217 per day for days 21 through 100, and all costs after day 100. Coverage is for skilled care while you recover, not for long-term or custodial care (help with daily activities like bathing or dressing), which Medicare does not cover. Long-term nursing home care is generally paid through Medicaid or private funds.
Does Medicare cover physical therapy?
Yes.
Medicare Part B covers outpatient physical therapy that is medically necessary to treat your condition. You pay 20% of the Medicare-approved amount after the yearly Part B deductible ($283 in 2026). There is no longer a hard dollar cap on therapy, but once your physical and speech therapy together pass $2,480 in 2026, your therapist must add a note (called a KX modifier) confirming you still need care. Claims above $3,000 may be reviewed for medical necessity. Part A covers physical therapy you receive as a hospital inpatient or in a skilled nursing facility. A doctor or therapist must set up and regularly review your plan of care.
Does Medicare cover mental health services?
Yes.
Medicare covers mental health care across its parts in 2026. Part B covers outpatient services like therapy, counseling, and visits with psychiatrists, psychologists, and clinical social workers, and since 2024 it also covers marriage and family therapists and mental health counselors. You pay 20% of the Medicare-approved amount after the $283 deductible, and one depression screening each year is free. Part A covers inpatient mental health care, with a lifetime limit of 190 days in a freestanding psychiatric hospital. Part D covers most mental health medications. Many of these services are also available by telehealth, and Medicare Advantage plans cover at least the same benefits.
Does Medicare cover chiropractic care?
Partly.
Medicare Part B covers one specific chiropractic service: manual manipulation of the spine to correct a subluxation (when one or more bones of the spine are out of position) that a doctor confirms is medically necessary. You pay 20% of the Medicare-approved amount after the $283 Part B deductible in 2026. Medicare does not cover other services a chiropractor might offer, such as X-rays, massage therapy, acupuncture, or routine wellness visits, so you would pay the full cost for those. Some Medicare Advantage plans include extra chiropractic or wellness benefits beyond this.
Does Medicare cover home health care?
Yes, when you qualify.
Medicare Parts A and B cover home health care if a doctor certifies that you are homebound (leaving home takes a major effort) and need part-time skilled care, such as skilled nursing, physical therapy, occupational therapy, or speech therapy. A Medicare-certified home health agency must provide the care under a plan your doctor reviews. You pay $0 for covered home health visits in 2026, and 20% for any durable medical equipment. Medicare does not cover 24-hour home care, meal delivery, or homemaker services like cleaning when that is the only care you need.
Does Medicare cover vision care?
Mostly no for routine care.
In 2026, Original Medicare does not cover routine eye exams for glasses or contact lenses, and it does not pay for the glasses or contacts themselves. It does cover some medical eye care: yearly glaucoma screenings for people at high risk, diabetic retinopathy exams, treatment for eye diseases, and cataract surgery (including one pair of standard glasses or contacts afterward). For those covered services you pay 20% after the $283 Part B deductible. Many Medicare Advantage plans add a routine vision benefit covering eye exams and an allowance for glasses.
Does Medicare cover hearing aids?
Original Medicare does not cover hearing aids or the exams used to fit them.
Some Medicare Advantage plans include a hearing benefit, but coverage varies by plan.
Does Medicare cover diabetes supplies and testing?
Yes.
In 2026 Medicare covers most diabetes care across two parts. Part B (outpatient care and equipment) covers blood sugar monitors, test strips, lancets, and continuous glucose monitors (CGMs) as durable medical equipment, plus diabetes screenings and a self-management training program. You pay 20% of the Medicare-approved amount after the $283 Part B deductible. Part D (drug coverage) covers insulin and related supplies like syringes, and in 2026 your insulin is capped at $35 for a month's supply. If you have a Medicare Advantage plan, it covers at least the same diabetes benefits, sometimes with added extras.
Does Medicare cover durable medical equipment?
Yes.
Medicare Part B covers durable medical equipment (DME): reusable medical gear your doctor prescribes for use at home, such as wheelchairs, walkers, hospital beds, oxygen equipment, CPAP machines, and blood sugar monitors. You pay 20% of the Medicare-approved amount after the $283 Part B deductible in 2026, and Medicare pays the other 80%. To be covered, the item must be ordered by a Medicare-enrolled doctor and supplied by a Medicare-enrolled supplier, and some items are rented rather than bought. Equipment meant mainly for use outside the home, or only for comfort or convenience, is not covered.
Which is better, Medigap or Medicare Advantage?
Neither is better for everyone; they suit different needs.
Medigap (also called Medicare Supplement, a private policy that pairs with Original Medicare) lets you see any doctor nationwide who accepts Medicare with no network and very predictable out-of-pocket costs, but you pay a monthly Medigap premium and add a separate Part D drug plan. Medicare Advantage (Part C, your Medicare benefits through a private plan) often has a lower or $0 plan premium, bundles drug coverage and extras like dental and vision, and caps your yearly out-of-pocket costs, but uses provider networks and may require prior approval. People who travel, want maximum doctor freedom, and prefer steady costs often lean Medigap; people who want low premiums, extras, and a network they are comfortable with often lean Medicare Advantage. With both, you still pay the Part B premium ($202.90 per month in 2026). To find out which fits your situation, reach out to a licensed Goodsurance advisor at 1-888-301-8091 (TTY 711), Mon to Fri 8 am to 5 pm PT.