Medicare costs rise again
Medicare costs are rising more than usual in 2026, according to revised estimates from the Centers for Medicare and Medicaid Services (CMS). The biggest jump will be in Medicare Part B, which pays for doctor visits, outpatient care, and medical devices.
The typical Part B premium is anticipated to increase from $185 in 2025 to $206.50 in 2026, an 11.6% boost — the largest since 2022. The Part B annual deductible also will increase roughly 12%, to $288 from $257.
The Part D prescription drug plan will also cost more. The base premium will increase from $36.78 to $38.99, an increase of 6%. Now, this doesn’t look like a lot, but these increases add up — especially for seniors on fixed incomes.
If concerns are about increased expenses, experts advise this fall’s Medicare open enrollment period (October 15 to December 7) is when to shop for alternatives like Medicare Advantage (Part C) or supplemental insurance (Medigap) to keep out-of-pocket costs in check.
Why are medicare costs going up?
According to CMS, several factors are fueling the increase. More Americans are qualifying for Medicare, health care is becoming more expensive, and drug and hospital fees are increasing at higher-than-usual rates.
At the same time, the Medicare payroll tax rate used to subsidize the program has not changed. Therefore, beneficiaries will have to pay higher premiums and deductibles to help fund the growing cost of care.
Physicians also mention inflation, higher hospital stays, and rising prices for prescription medicines as top causes.
“Multiple factors are driving the healthcare price increase, including medical cost inflation, higher drug costs, and more doctor visits by Medicare patients,” eHealth Vice President Whitney Stidom said.
Who will see the biggest increases?
Not everyone will pay equally. The more affluent beneficiaries will have the greatest increases in premiums due to a surcharge called the Income Related Monthly Adjustment Amount (IRMAA).
For 2026, anyone with an income of at least $106,000 (individual) or $212,000 (joint filers) will pay more. IRMAA surcharges will increase by $8.60 to $51.70 monthly for Part B, depending on income level.
For Part D, wealthier beneficiaries will pay $14.50 to $91 extra per month, in addition to their regular plan premium.
What about Medicare Advantage (Part C)?
Medicare Advantage (Part C) incorporates Parts A, B, and sometimes Part D into a single plan through a private insurer. These plans have lower premiums compared to Original Medicare and even offer $0 drug coverage.
But Medicare Advantage plan premiums can be highly volatile. Some save them money, while others have their expenses withheld in other methods, like reduced networks of providers or rigorous prior authorization requirements before they can get certain procedures.
Experts advise comparing plans carefully this fall during open enrollment. Your licensed insurance agent or your state’s State Health Insurance Assistance Program (SHIP) can help you with information about your choices.
What you can do to prepare
Here are some steps to help contain next year’s higher Medicare costs:
1. Examine your budget.
Start setting aside a little more each month sooner. That $21.50 bump in your premium amount does not appear large, but it can amount to more than $250 annually.
2. Take a look at Medicare Advantage plans.
Compare available Part C plans in your area. Some may help lower your total monthly costs or include drug coverage.
3. Lower your IRMAA.
Your IRMAA is based on your income from two years earlier. Reducing your taxable income—for example, by converting traditional IRA funds to a Roth IRA or donating to charity from your IRA—can help lower future IRMAA charges.
4. Apply for extra help.
If your income is low, you may qualify for Extra Help, a federal program that reduces or covers the cost of prescription medications. With extra help, your out-of-pocket costs for medications can be as low as $4.90 for generics and $12.15 for brand-name drugs.
5. Consider a Medigap policy.
If you stick with Original Medicare, a Medigap policy can pay deductibles, copays, and other costs not covered by Medicare.
