Most Americans receive a valuable present for their 65th birthday—Medicare eligibility. But some are surprised to learn that this present comes with a price tag. “When they first come in, they’re shocked to find out that Medicare isn’t free,” Medicare expert Lauren Bigham Steele tells Bottom Line Personal. “They’ve been paying for Medicare with their taxes for their entire careers and think they won’t have to pay more when it is time to enroll.” But that is just not the case.
How Much Does Medicare Cost?
The premiums for 2026 weren’t revealed until mid-November—delayed by the government shutdown—but some Medicare premiums will climb by nearly 10% in 2026.
Bottom Line Personal asked Bigham Steele to discuss what Medicare recipients need to know about the program’s 2026 costs—and situations where Medicare recipients might be able to take steps to lower their premiums.
Medicare Part B helps cover outpatient care, doctors’ appointments, home health care, and certain other services and medical equipment. Part B premiums will be $202.90 per month in 2026 for most Medicare recipients, a sharp increase of nearly 10% from 2025’s monthly premium of $185. Meanwhile, the Part B deductible will jump from $257 in 2025 to $283 in 2026, an increase of more than 10%.
High-earners pay even larger Part B premiums, due to Medicare’s “income-related monthly adjustment amount” (IRMAA). If a Medicare recipient’s adjusted gross income (AGI) tops $109,000 in 2026 ($218,000 if married and filing a joint tax return), he/she will face surcharges of $81.20 to $487 per month, increasing total monthly Part B premiums to between $284.10 and $689.90.
Perhaps you’re thinking, My income’s high now, but it will be below those IRMAA thresholds once I retire. But there’s a detail worth noting—“They actually look at your income from two years prior,” says Bigham Steele. Example: If you were still working and had a six-figure income in 2024, you could face IRMAA surcharges in 2026 even if you retired in 2025 and your modified adjusted gross income now is below IRMAA thresholds.
Helpful: Fortunately, there might be something you can do to lower IRMAA surcharges or avoid them entirely if your income is lower now than it was two years ago, says Bigham Steele—file Form SSA-44, Medicare Income-Related Monthly Adjustment Amount—Life-Changing Event with the Social Security Administration. As long as your income decline is the result of one of eight approved “life-changing events”—a work stoppage…work reduction…marriage…divorce/annulment…death of a spouse…loss of pension income…employer settlement payment…or loss of income-producing property—there’s a good chance your appeal will be successful and your Medicare premiums will be lowered. Recipients can appeal the IRMAA surcharges—you have 60 days after you receive the notice to appeal the IRMAA or higher premium.
Also: While IRMAA pushes some Part B recipients’ premiums above the standard levels, a rule called the “hold harmless provision” will allow a small percentage of Medicare beneficiaries to avoid a portion of 2026’s steep premium increase. Under this rule, a Medicare recipient’s Part B premiums cannot be increased by more than the amount that his/her Social Security benefits increased that year due to Social Security’s cost of living adjustment (COLA), assuming this Medicare recipient has his Medicare premiums deducted from his Social Security benefits, as is common. But this rule will affect only the premiums of people whose monthly Social Security benefits are relatively low.
Medicare Part A helps cover the cost of hospital care, plus skilled nursing facility and hospice care. The vast majority of Medicare recipients pay no premiums at all for Medicare Part A. The exception is Medicare recipients who have fewer than 40 quarters of work history in the US—that’s just 10 working years over the course of their lifetime—and who also don’t have a spouse or ex-spouse who meets that 40-quarter threshold. “This is mostly people who have no US work history because they’re new to the US,” says Bigham Steele. These Medicare recipients are required to pay hefty premiums—$311 to $565 per month—to obtain Part A because they paid little or nothing into the Medicare system in the form of Medicare taxes during their working lives.
Helpful: If you fall just short of the 40-quarter work history threshold, consider taking a part-time job in retirement to earn the final few quarters you need. In 2026, paying Medicare taxes on just $1,890 in income will earn you one quarter of work history, and earning as little as $7,560 will earn you four quarters, the most you can add to your tally in any single year.
Medicare recipients do face a Part A inpatient hospital deductible whether or not they’re required to pay Part A premiums. This deductible is increasing to $1,736 in 2026, up $60 from 2025’s $1,676. The Part A deductible isn’t annual like most insurance deductibles, adds Bigham Steele—it resets once someone is out of the hospital for 60 consecutive days. “If you break your hip and end up in the hospital for a week, then 30 days later break another bone and end up back in the hospital, you’ll only have to pay it once,” says Bigham Steele. “But if you break those same bones 90 days apart, you’ll have to pay it twice.”
Medicare Part D helps cover the cost of prescription drugs. Part D premiums vary by the plan selected and region. Bigham Steele has seen monthly premiums ranging from $0 to around $150 per month for 2026. But on average, Part D premiums are expected to decrease slightly in 2026, from $38.31 to $34.50, according to the US government’s Centers for Medicare & Medicaid Services. Bigham Steele warns that the IRMAA income surcharges described above, boost high earners’ Part D premiums, too, by anywhere from $14.50 to $91 per month in 2026.
Part D’s annual cap on out-of-pocket costs for covered prescription drugs is increasing in 2026, from $2,000 to $2,100.
