Medicare costs will be going up more than usual in 2026, according to projections from the Centers for Medicare and Medicaid Services (CMS). The new Medicare Part B premium is estimated to be $206.50. That’s a $21.50 (11.6%) increase over the 2025 Part B premium, the largest since 2022. Other out of pocket expenses related to Part B and Part D are will rise too, and Part D premiums may go up as well.
There are things you can do now to prepare for and possibly lower your Medicare costs. We’ll show you how.
Key Takeaways
- Premiums and other out-of-pocket costs for Medicare Part B and Part D usually go up every year, but this year’s increase is larger than usual.
- Medicare Part B premiums are expected to increase 11.6% in 2026, while Part D premiums may rise as much as 6%.
- Deductibles, out-of-pocket maximums, and other costs should rise as well.
- If you’re worried about the higher costs, you may want to look into other options, such as switching to a Medicare Advantage plan during Medicare open enrollment this fall or purchasing supplemental insurance.
Part B and Part D Costs Are Projected to Rise
You pay monthly premiums for Medicare Part B, which covers medical services, preventive care, durable medical equipment, and other forms of outpatient care. (Part A, which covers inpatient and hospital care, doesn’t have a premium for most enrollees.)
The CMS has increased the Part B premium almost every year since 2009, when it was $96.40 per month, although premiums have occasionally stayed the same or even decreased in some years.
Medicare prescription drug coverage, which is known as Part D, is offered by private companies and can be added to your Original Medicare plan (Parts A and B). The CMS sets a baseline monthly Part D premium, but what enrollees pay may differ from plan to plan.
For both Part B and Part D, high-income enrollees pay an extra fee called the Income Related Monthly Adjustment Amount (IRMAA). Along with monthly premiums, the additional IRMAA cost is projected to increase for each income level subject to it.
What’s driving these increases? Several causes, according to the CMS: The number of people becoming eligible for benefits has increased, the cost of providing care has increased, but the Medicare tax rate—paid by people currently in the workforce—has stayed the same. Without enough tax revenue to offset the cost of care at the point of service, Medicare beneficiaries must pay more.
“The healthcare price surge is being driven by multiple factors, including medical cost inflation, higher drug costs, and an increase in hospital and doctor visits among Medicare beneficiaries,” said Whitney Stidom, vice president of consumer enablement at eHealth. “For Medicare beneficiaries looking to save on healthcare costs for 2026, it is key to begin preparing now and seek expert guidance to review the various plan changes that are expected for this fall’s annual enrollment period.”
Important
Medicare annual enrollment runs from Oct. 15 through Dec. 7. During this time, you can switch from Original Medicare to Medicare Advantage, or vice-versa; join, drop, or switch to another Part D plan if you’re on Original Medicare; or join, drop, or switch to another Medicare Advantage plan, with or without drug coverage.
Part B Premium Could Rise 11.6%, Deductible 12%
The Part B premium is estimated to increase by 11.6%, from $185 this year to $206.50 next year. In addition, the annual deductible could also rise from $257 to $288 (12%), increasing your out-of-pocket costs.
The Part B IRMAA will increase for all income levels that are currently subject to the additional cost; that means any beneficiaries who earn at least $106,000 as individual taxpayers or $212,000 as joint taxpayers. These enrollees will pay between $82.60 (an increase of $8.60) and $495.60 (an increase of $51.70) more per month.
Part D Premiums May Rise
Private companies offer medication drug plans, so it’s not clear yet what will happen with Part D premiums. Many Part D plans, especially those offered with Medicare Advantage plans, have $0 premiums.
But the Part D base beneficiary premium is estimated to go up from $36.78 to $38.99, a 6% increase. That’s the maximum increase allowed under a provision of the Inflation Reduction Act. The base beneficiary premium is just the starting place for calculating the plan-specific premiums—the premiums that will actually be offered haven’t been revealed yet. Yours could be higher or lower.
According to the CMS, the average premium was $33.59 in 2024 and about $24.06 in 2025, thanks to a trial program to stabilize prescription drug premiums introduced by the Biden administration last summer.
That trial program, the Part D premium demonstration subsidy, was cut by 30% by the Trump administration in July, which helps account for some of the projected premium hikes.
Other Part D Costs Will Go Up
It’s not just Part D premiums that will be higher in 2026. Part D deductibles are expected to increase, from $590 to $615. Once you hit that, you’ll pay a coinsurance of 25% for covered medications until you hit the catastrophic coverage threshold—the amount Part D enrollees must pay out of pocket for prescription drugs before their coinsurance costs are reduced from 25% to $0. That threshold is increasing from $2,000 to $2,100, forcing enrollees to pay a little more out-of-pocket to reach this stage of coverage.
In 2025, Part D beneficiaries who pay the IRMAA must pay between $13.70 and $85.80 more each month (depending on their household income) in addition to their plan premiums. In 2026, the IRMAA will increase to $14.50 for the lowest income tier and to $91 for the highest income tier.
What You Can Do Now
Because the cost increases don’t hit until next year, there’s a lot you can do now to prepare. We’ll go through some options below.
Prepare Your Budget for an Increase in Premiums
Your health is important, and it may be worthwhile to pull back on spending on more discretionary purchases in order to account for the Medicare premium increases. While an extra $21.50 per month for Part B premiums might seem small, it can add up quickly for someone living on a fixed income.
Consider a Medicare Advantage Plan
Medicare open enrollment runs from October 15 through December 7. You’ll have the option to switch to a Medicare Advantage (Part C) plan, which roughly half of Medicare beneficiaries are enrolled in. Medicare Advantage offers the same Parts A and B coverage that Original Medicare does, but its services are administered by a private insurance company. As a result, there’s a wide variation in costs between plans, with many enrollees paying reduced monthly Part B premiums and no premiums for prescription drug coverage.
“A licensed agent can help people review plans from various insurance companies in their areas, based on their unique personal needs, while providing expert advice,” said eHealth’s Stidom.
Note that while Medicare Advantage could be more affordable out of pocket, it comes with some limitations. For example, you may be required to use only in-network providers, depending on your plan, and your care may be delayed or denied because of your insurer’s prior authorization rules.
“While Medicare Advantage plans advertise all these really great benefits, and some of them probably are really great, it’s worth reading the benefit guides and understanding what those benefits actually provide for you,” said David Meyers, associate professor of health services policy and practice at Brown University School of Public Health.
Meyers recommends talking to your state health insurance assistance program (SHIP) for clear information on your Medicare options. Switching plans is “a difficult decision and there’s not a lot of really great unbiased information out there,” Meyers said.
Lower Your IRMAA
Your IRMAA costs for next year are based on your prior year’s modified adjusted gross income (MAGI), as listed on your tax return. That means if your MAGI in 2024—which you reported on the tax return you filed this year—exceeds the IRMAA threshold, you’ll pay the extra costs in 2026.
To plan for future years now, you may be able to lower your taxable income and thus reduce your IRMAA liability. One way is to move your traditional IRA funds to a Roth IRA (known as a Roth conversion). Traditional IRA distributions are included in your taxable income, but Roth distributions are not, as long as you keep the funds in the Roth for at least five years.
Taxpayers over 70.5 years of age can also make contributions to charity directly from their traditional IRA to avoid having distributions count toward their taxable income.
If you had a life-changing event that causes your income to decrease, you may be able to contact the Social Security Administration (SAA) to request a reduction in your IRMAA costs. The SSA defines life-changing events as marriage, divorce, the death of a spouse, job loss or reduction, and loss of income.
Apply for Extra Help
Extra Help is a CMS program to subsidize the prescription drug costs of beneficiaries with limited income and resources. You may receive Extra Help automatically if you receive Medicaid, state-sponsored help for your Part B premiums, or Supplemental Security Income.
With Extra Help, you’ll pay no premiums or deductibles, and your out-of-pocket costs for prescriptions are capped at a low, predefined dollar amount. In 2025, you pay just $4.90 for generic drugs and $12.15 for brand-name ones.
Buy a Medigap policy
Medicare Supplement Insurance, or Medigap, is a separate policy sold by private companies for Original Medicare enrollees. Medigap can pay up to 100% of your Part A coinsurance, hospital costs, and deductible, and up to 100% of your Part B coinsurance, copay, and deductible. Exactly how much your Medigap policy will pay depends on the plan you choose.
Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.