Older Americans should brace for higher healthcare costs in 2026 as Medicare premiums are expected to rise significantly, according to projections from the 2025 Social Security and Medicare Trustees Report.
Biggest Part B premium hike in four years
Medicare officials project the standard Part B monthly premium will jump 11.6%, rising from $185.00 in 2025 to $206.50 in 2026—the largest dollar increase since 2022. Part B covers doctor visits, outpatient care, and some home health services.
The annual deductible for Part B will also rise from $257.00 to $288.00, an 11.2% increase.
Part D premiums and drug cost caps
Medicare officials project the base Part D premium will be $38.99 in 2026, though actual premiums vary by plan. This reflects continued moderation due to the Inflation Reduction Act’s premium stabilization provision, which caps how much insurers can raise costs.
In 2026:
- Standard Part D deductible: $615 (up from $590 in 2025)
- Out-of-pocket drug cap: $2,100 (up from $2,000 in 2025)
Once older people hit this cap, they will no longer owe copays for covered prescriptions for the rest of the year.
Social Security cost-of-living increase offset
Social Security officials project the 2026 COLA (cost-of-living adjustment) at 2.6% to 2.7%, which would raise average monthly benefits by about $54.14.However, the rising Part B premium could consume 40% of that gain, reducing the net benefit increase to about $32.66 per month.
Why this matters
For most Medicare enrollees, Part B premiums are automatically deducted from Social Security payments. This means even modest increases in premiums can eat into already tight retirement budgets.
Retirees also face potential income-related premium surcharges—called IRMAA (Income-Related Monthly Adjustment Amounts)—which can significantly raise Part B and Part D costs for higher-income retirees.
How to prepare
With Medicare open enrollment set for October 15 to December 7, now’s the time to:
- Review your income from 2024, which determines 2026 IRMAA surcharges
- Consider a Roth IRA conversion to reduce future taxable income
- Evaluate Part D or Medicare Advantage plans to match drug needs and budget
- Track final premium announcements from CMS this fall
Bottom line
Expect to pay more for Medicare in 2026—especially for Part B. While Social Security will likely rise modestly, premium increases may outpace those gains for many. Stay informed and consider income planning now to soften the impact.
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