Medicare Costs Rising Significantly in 2026

December 3, 2025

The Centers for Medicare & Medicaid Services (CMS) announced November 14 that Medicare Part B monthly premiums would rise $17.90 or 9.6 percent to $202.90 per month from $185 in 2025 for roughly 92 percent of beneficiaries, with the remaining eight percent seeing hikes in their income-related monthly adjustments (IRMAAs) as well.. Furthermore, the annual deductible for all Medicare Part B beneficiaries will also increase in 2026. As for Medicare Part A, approximately 99 percent of Medicare beneficiaries do not have a Part A premium, but the Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital will increase. On the other hand, the Medicare Part D stand-alone premium for 2026 is projected to be about $34.50 per month, which is a decrease from approximately $38 in 2025. However, IRMAAs for Medicare Part D, with those for Part B, are increasing significantly. As a result, overall Medicare premiums and out-of-pocket expenses are projected to rise sharply in 2026. Whether or not an NCTR system member administers healthcare benefits for its participants, this can affect the retirement security of millions of Americans, including many retired public employees.

Medicare Part B

Medicare Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A. While the 2025 Medicare Trustees report released earlier this year projected that the standard monthly Medicare Part B premium could rise even more, to $206.50, the actual increase ($202.90), amounting to 9.6 percent in just one year, can still be difficult for many, according to TheStreet, a financial news and financial literacy website.

For example, it is more than three times the 2.8 percent increase in Social Security’s cost-of-living adjustment for 2026, as pointed out by Rhian Horgan, the CEO of Silvur Technology Services, a retirement platform dedicated to helping people over the age of 50 and the parent company of Silvur Insurance. She is quoted in TheStreet as saying that this means “32 percent of the average American’s annual cost of living adjustment for Social Security will be eaten up by an increase in health care costs.”

[According to the Social Security Administration, the average retired worker will see their monthly benefit rise from $2,015 to $2,071 starting in January of 2026, an increase of $56 per month. Given the $17.90 monthly increase in Part B premiums, which is automatically deducted from a beneficiary’s Social Security check, the net increase in a Social Security beneficiary’s monthly check will be $38.10, and the before-tax check for the average retired worker will be $2,053.10, according to TheStreet.]

However, any dollar increase in the Part B premium is limited by law to the COLA dollar increase in an individual’s Social Security benefit. Thus, eligible recipients whose monthly Social Security benefit is $639 or less will be protected from the full Part B premium increase by the hold-harmless rule since the Part B premium increase is $17.90 and the cost-of-living allowance is 2.8 percent , and $17.90 is 2.8 percent of $639. This will mean that about four million Social Security beneficiaries will have their Part B increase capped because of this “hold harmless” provision.

Marcia Mantell, founder of Mantell Retirement Consulting, is also quoted as noting that this much of an increase in just one year, “especially in a year riddled with higher prices due to tariffs and stubborn inflation – is a tough pill to swallow (no pun intended!).” Mantell warned that “[s]eniors with more modest incomes are going to have a tough time absorbing this increase,” based on TheStreet’s reporting.

AARP agrees, saying that because both the Part B premium and deductible increases are “far higher than inflation overall in the past year, they will further squeeze the finances of older Americans who struggle with food, housing and energy costs.” Also, Shannon Benton, executive director of The Senior Citizens League, warns that “Medicare Part B premiums consistently overtaking Social Security COLAs degrades American seniors’ quality of life over time.” This is particularly true for the estimated 12 percent of men and 15 percent of women who rely on their Social Security check for virtually all of their income in retirement, AARP stresses.

Furthermore, as noted above, Part B total premiums for high-income beneficiaries with full Part B coverage are also subject to an additional IRMAA, meaning that these individuals will pay a larger percentage of the total cost of Part B based on income reported on their annual tax return from two years ago. As Kiplinger explains, for 2026, if 2024 modified adjusted gross income (MAGI) is above $109,000 if single or $218,000 if married and filing jointly, an extra amount in addition to the plan premium is charged, ranging from $81.10 to $486.50 monthly. (For most people, the MAGI for IRMAA is the sum of their Adjusted Gross Income from their tax return plus any tax-exempt interest income.)

Turning to the annual deductible for all Medicare Part B beneficiaries, it is also increasing in 2026 to $283, an increase of $26 from the annual deductible of $257 in 2025, or about a 10 percent hike. [The Part B deductible is the amount the beneficiary pays before Medicare’s cost-sharing begins, where Medicare pays 80 percent and the patient pays 20 percent. However, beneficiaries on Medicare Advantage plans do not pay the $283 deductible. Instead, these plans have their own copays, coinsurance, and their own annual limit for medical bills. On the other hand, beneficiaries with a stand-alone Part D plan, often referred to as Medigap coverage, do pay the annual deductible, but once it is reached, they usually pay nothing more in a normal year and their insurance picks up the 20 percent that is not covered by Medicare.]

Medicare Part A

Medicare Part A covers inpatient hospital, skilled nursing facility, hospice, inpatient rehabilitation, and some home health care services. As CMS explains, approximately 99 percent of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment, as determined by the Social Security Administration.

As for the Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital, it increases by $60 in 2026, totaling $1,736 – up from $1,676 in 2025, representing about a 3.7 percent hike. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.

In 2026, beneficiaries must then pay a coinsurance amount of $434 per day for the 61st through 90th day of a hospitalization (up from $419 in 2025) in a benefit period and $868 per day for lifetime reserve days ($838 in 2025). For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $217.00 in 2026 ($209.50 in 2025).

Medicare Part D

Medicare drug coverage (Medicare Part D) helps pay for brand‑name and generic prescription drugs. It is optional and available to anyone enrolled in Medicare Part A and/or Part B. Coverage is provided through private companies approved by Medicare, either as stand‑alone Part D plans or as part of Medicare Advantage plans that include prescription drug coverage (MA‑PDs).

Each drug coverage plan can vary in cost and specific drugs covered. Accordingly, a beneficiary’s Part D monthly premium varies. According to CMS, the average stand-alone Part D plan total premium is projected to decrease from $38.31 in 2025 to $34.50 in 2026 (a decrease of $3.81). After the application of Medicare Advantage (MA) rebates, which CMS explains reflect what people in MA-PDs will pay, the average Part D total premium for MA plans with prescription drug coverage is projected to decrease from $13.32 in 2025 to $11.50 in 2026 (a decrease of $1.82). It is important to underscore that this is an average, and the actual premium depends on the plan and where the beneficiary lives.

Furthermore, as with Part B, approximately eight percent of people with Medicare Part D will pay an additional IRMAA if their income is above certain thresholds. This is typically deducted from Social Security benefit checks or paid directly to Medicare when the beneficiary does not receive Social Security, as is the case for some public employees.

For example, in 2026, if beneficiaries’ income in 2024 is over $109,000 for an individual taxpayer or over $218,000 for a married couple filing jointly, they are subject to this surcharge in addition to their plan’s premium, starting at $14.50 per month, whereas people with high incomes (over $500,000 for an individual/$750,000 for a married couple filing jointly) would pay an extra $91.00 per month on top of their plan premium. Comparable surcharges for 2025 were from $13.70 for 2023 income over $106,000 (for an individual taxpayer) or over $212,000 (for a married couple filing jointly), up to $85.80 for individual incomes over $500,000/$750,000 for a married couple filing jointly.

Medicare Part D plans may also have an annual deductible, which is the amount a beneficiary must pay out-of-pocket for covered prescription drugs before the plan begins to share costs. The deductible amount depends on the specific plan chosen, and CMS notes that some Medicare Part D plans may have no annual deductible. In any case, the annual deductible cannot be more than $615 in 2026, a $25 increase from 2025, and does not apply to spending on Medicare Part B drugs, which are usually vaccinations or injections that a doctor administers as well as some outpatient prescription drugs.

Once the full Medicare Part D deductible is met, if the plan has one, the beneficiary then pays the plan’s copayments (fixed amounts for prescriptions paid at the pharmacy) or coinsurance (a percentage of drug costs, paid at the pharmacy) for covered generic and brand‑name drugs. These amounts will vary by plan and drug tier. This out‑of‑pocket spending on covered Part D drugs is capped at $2,100 in 2026 –up $100 from 2025. Furthermore, after reaching this limit, beneficiaries pay $0 for covered prescriptions for the rest of the calendar year.

Overall, experts see Medicare prices for 2026 as a “mixed bag.” On the one hand, Kiplinger warns that retirees should brace for higher overall Medicare costs in 2026, especially with Part B premiums rising nearly 10 percent, and these higher Part B premiums and deductibles will strain budgets. But, on the other hand, the 2026 $2,100 Part D cap has the potential for predictability and relief for those with expensive prescriptions.

As TheStreet summarizes the situation, “the sting is a bit less than estimated,” but “it’s a substantial sting nonetheless.” Will The Senior Citizens League’s warning that Medicare Part B premiums consistently overtaking Social Security COLAs “degrades American seniors’ quality of life over time” translate into pressure for increased COLAS and/or enhanced benefits for not only Social Security but public pension plans as well?