Medicare Costs Going Up in 2026: What Seniors Need to Know

Additional Coverage:

10 Medicare Changes for 2026 That Will Impact All Retirees (financebuzz.com)

Medicare Makeover: What 69 Million Americans Need to Know for 2026

Get ready, Medicare beneficiaries! Big changes are on the horizon for the approximately 69 million Americans relying on Medicare coverage, especially the 91% enrolled in both Part A and Part B. Policy experts are forecasting a series of significant cost and coverage adjustments for 2026, with major shifts expected in deductible amounts, prescription drug costs, and even eligibility requirements.

Staying informed is key to navigating these updates and avoiding financial surprises in retirement. Here’s a detailed look at what we know so far about the most impactful changes ahead.

1. Brace for a Significant Increase in Medicare Part B Premiums

Get ready for your Medicare Part B premium to climb. The standard monthly premium is projected to jump from $185 in 2025 to $206.50 in 2026.

That’s an 11.6% increase, more than double last year’s bump. The annual Part B deductible is also expected to rise, moving from $257 to $288 – a 12% increase.

2. Prepare for Higher Prescription Drug Costs Before Coverage Kicks In

Changes are coming to prescription drug costs under Medicare Part D. The federal cap on the standard Part D deductible is set to increase to $615, up from $590 in 2025.

While some plans may still offer lower deductibles or even $0 premiums, it’s crucial to remember that drug costs and coverage details vary widely by plan. Enrollees should anticipate different out-of-pocket amounts depending on their chosen coverage.

3. Expect a Higher Catastrophic Threshold Under Part D

Medicare Part D’s catastrophic spending limit – the point where your out-of-pocket drug costs are capped – will increase from $2,000 to $2,100 in 2026. Once you reach this threshold, Medicare will cover 100% of your covered prescription costs. Despite this slight increase, the Inflation Reduction Act continues to provide substantial protections for seniors with chronic or high-cost medication needs.

4. The “Hold-Harmless” Rule May Not Protect Everyone

Medicare’s “hold-harmless” provision typically shields many beneficiaries from seeing their Social Security checks decrease when Medicare Part B premiums go up. This rule prevents a beneficiary’s Social Security payment from dropping if the dollar amount of their Part B premium increase is larger than their annual Social Security cost-of-living adjustment (COLA).

However, because this protection is tied to the size of a person’s COLA, it primarily benefits those with smaller Social Security payments. Beneficiaries receiving larger monthly benefits often experience the full Part B premium increases.

5. Your IRMAA Could See an Increase

Higher-income seniors might also face an increase in their Income-Related Monthly Adjustment Amount (IRMAA). This surcharge applies to both Part B and Part D for participants whose modified adjusted gross income (MAGI) exceeds IRS thresholds.

IRMAA amounts are calculated on a sliding scale across five income brackets, updated annually for inflation with a two-year lag. While no firm figures are available yet, many policy insiders anticipate an increase in 2026 IRMAA amounts.

6. Auto-Renewal is Coming for the MPPP

The Medicare Prescription Payment Plan (MPPP), which allows enrollees to spread out their prescription drug costs throughout the year, is getting an update. In 2026, a new rule will make participation easier by automatically re-enrolling you in future years unless you choose to opt out. You’ll receive an annual notice of updated terms, and providers are required to process your request to exit the program within a specified timeframe.

7. Supplemental Benefits Are Being Curtailed

Medicare Advantage plans have increasingly offered “extras” such as meal deliveries, over-the-counter benefits, transportation, and non-medical support for chronic illnesses. However, new rules starting in 2026 will restrict some previously covered services.

Plans will no longer be allowed to offer non-healthy foods, alcohol, tobacco, or life insurance. While these changes don’t overhaul Medicare Advantage, they do trim the perks, potentially shifting seniors’ focus back to core benefits like networks and drug coverage.

8. Prior Authorization Requirements Are Expanding

Historically, Original Medicare has required prior authorization for only a small number of services. That’s about to change.

In 2026, Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington will pilot a new model expanding prior authorization requirements for several outpatient procedures. These include skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy for osteoarthritis.

Emergency and inpatient services remain excluded. While prior authorization is common in Medicare Advantage, this marks the first significant test of its expansion under Original Medicare.

9. Some Dual-Eligible Seniors Could Lose Medicaid Coverage

Medicaid requires states to regularly verify enrollees’ eligibility, including reconfirming income and financial resources. These checks can pose administrative challenges, particularly for individuals with complex health needs. For Medicare-Medicaid “dual eligibles,” losing Medicaid coverage can be especially detrimental, as Medicaid covers critical services like long-term care and certain home- and community-based supports.

10. Some Prescription Drugs Will See Lower Prices

For the first time, Medicare will enforce negotiated prices on a select group of high-cost, single-source drugs starting in 2026. The initial list includes well-known medications such as Eliquis, Enbrel, Entresto, Farxiga, Imbruvica, Januvia, Jardiance, Fiasp/NovoLog, Stelara, and Xarelto. While initial savings may be modest due to the short list, more drugs will be added in subsequent years, including Ozempic, Rybelsus, and Wegovy in 2027.

The Bottom Line

Medicare beneficiaries should prepare for rising costs in 2026, particularly under Part B. While Medicare trustees’ projections are not always exact, the overall trend is clear: healthcare costs are increasing, and retirees will need to budget for greater out-of-pocket expenses to avoid medical debt. If you rely on Medicare, 2026 is the year to carefully review your situation, assess any IRMAA exposure, and proactively plan for these changes to maintain a stress-free retirement.