2026 Medicare Cost Changes – What Every Retiree Needs to Know

Medicare isn’t static—costs change each year. In 2026, the increases are significant enough that every retiree should take notice. Premiums, deductibles, and drug coverage limits are all going up, which could affect your monthly budget and out-of-pocket costs.

If you’re on a fixed income, these changes matter even more. But with some planning, you can reduce the impact, avoid unnecessary expenses, and make sure you’re getting the most value from your Medicare benefits.

3 Key Points You Should Know Before We Dive In

1. Part B monthly premium will increase by 11.6%, from $185 to $206.50.

2. Part D deductibles and catastrophic caps are rising, which may mean higher drug costs.

3. Smart plan review during Open Enrollment (Oct 15 – Dec 7) can help offset these increases.

Medicare Part B – Higher Premiums and Deductibles

For 2026:

• Monthly Premium: Standard premium increases from $185 to $206.50.

• Deductible: Rises from $257 to $288.

Why it’s happening: Healthcare costs, provider payments, and prescription drug spending are all climbing. Medicare adjusts premiums each year to cover these expenses.

What it means for you: Even if you rarely see the doctor, you’ll pay more each month just to have Part B coverage.

Medicare Part D – Drug Costs Going Up

For prescription drug coverage in 2026:

• Base Premium: Average cost rises to around $38.99/month.

• Deductible: Jumps to $615 (up from $545 in 2025).

• Catastrophic Coverage Limit: Out-of-pocket cap rises to $2,100 before catastrophic coverage kicks in.

Tip: Even if your medications haven’t changed, your costs could go up due to formulary changes or cost-sharing shifts. Always check your plan’s Annual Notice of Change (ANOC).

IRMAA – Higher Income Means Higher Premiums

If your income is above certain thresholds, you’ll pay more for Part B and Part D due to the Income-Related Monthly Adjustment Amount (IRMAA). These thresholds adjust each year, and even a small increase in income can bump you into a higher tier.

Strategies to reduce IRMAA impact:

• Consider Roth conversions before retirement to lower taxable income later.

• Use Qualified Charitable Distributions (QCDs) to reduce income from Required Minimum Distributions (RMDs).

Medigap vs. Medicare Advantage – Which Could Save You More in 2026?

With rising premiums and deductibles, many retirees consider switching between Original Medicare + Medigap and Medicare Advantage.

Medigap Pros:

• Predictable out-of-pocket costs

• No network restrictions

Medicare Advantage Pros:

• Often includes prescription, dental, vision, and hearing benefits.

• May have lower monthly premiums.

Caution: Switching from Medicare Advantage to Medigap later may require medical underwriting, depending on your state.

Action Steps for 2026

1. Mark Your Calendar: Open Enrollment is Oct 15 – Dec 7, 2025.

2. Review Your Current Coverage: Compare premiums, deductibles, and drug lists.

3. Check for Extra Help: If your income and resources are limited, you may qualify for help with Medicare costs through the Extra Help program or a Medicare Savings Program.

How to Manage the Cost Increase on a Fixed Income

• Review and Reduce Other Expenses: Small monthly savings can offset Medicare increases.

• Look for Plan Incentives: Some Advantage plans offer OTC allowances or rewards for preventive care.

• Check for State Programs: Some states offer additional Medicare premium assistance beyond federal programs.

Why These Changes Matter More Than Ever

Even though a $21.50 increase in Part B premiums may not sound like much, over the course of a year, plus the higher deductibles and drug costs, it adds up. For many retirees, these costs compete with groceries, utilities, and other essentials.

The good news? Planning ahead and reviewing your options every year can prevent unpleasant surprises.

Conclusion

Medicare’s 2026 cost increases are real, but they don’t have to derail your retirement budget. The key is awareness and proactive action during Open Enrollment. Whether you need to switch plans, apply for assistance, or adjust your income strategy, there are ways to keep your healthcare affordable.

At Senior Help And You, we help retirees navigate these yearly changes—so you can make confident, informed decisions about your coverage without feeling overwhelmed.

3 Takeaways

1. Medicare Part B and Part D costs are increasing in 2026—plan ahead now.

2. Open Enrollment is your best opportunity to minimize out-of-pocket expenses.

3. Extra Help and Medicare Savings Programs can offset rising costs for those who qualify.

Sources:

1. Medicare.gov – “Medicare Costs at a Glance” (https://www.medicare.gov)

2. Centers for Medicare & Medicaid Services – “2026 Medicare Premium and Deductible Announcements” (https://www.cms.gov)

3. Investopedia – “2026 Medicare Part B and D Cost Projections” (https://www.investopedia.com)

4. Kiplinger – “What to Expect in 2026 Medicare Costs” (https://www.kiplinger.com)

Author: Albert Ferrin, Senior Help And You