Medicare costs are indeed expected to rise in 2026 and likely beyond, with several key components of the program showing noticeable increases. The standard Part B premium, which covers outpatient services like doctor visits and preventive care, is projected to increase by about 11.6%, rising from roughly $185 per month in 2025 to approximately $206.50 in 2026. Alongside this, the Part B annual deductible is expected to go up by around 12%, from $257 to $288. These increases reflect broader trends in healthcare costs and inflation pressures affecting the Medicare program.
Prescription drug costs under Medicare Part D are also set to rise, though at a somewhat lower rate. The base beneficiary premium for Part D is projected to increase by about 6%, from approximately $36.78 to $38.99 per month. The Part D deductible will climb by $25, reaching $615, and the catastrophic out-of-pocket spending threshold—the point at which Medicare covers most drug costs—will increase by $100 to $2,100. These changes mean that beneficiaries may face higher upfront and ongoing costs for their medications.
The reasons behind these cost increases are multifaceted. Rising healthcare expenses overall, including more expensive treatments, new technologies, and inflation in medical services, contribute significantly. Additionally, demographic shifts such as an aging population increase demand for Medicare services, putting further financial pressure on the program. The Medicare Trustees’ reports and CMS projections consistently highlight these factors as drivers of cost growth.
For many beneficiaries, the increase in Part B premiums may be partially offset by Social Security cost-of-living adjustments (COLA), which typically rise in response to inflation. However, not all beneficiaries benefit equally from this offset. The “hold-harmless” provision protects some Social Security recipients from seeing a net decrease in their monthly benefits due to premium hikes, but this protection does not apply to everyone, especially new enrollees or those not receiving Social Security benefits.
Higher-income Medicare beneficiaries will also face increased costs through Income-Related Monthly Adjustment Amounts (IRMAA), which add surcharges to premiums based on income levels. The income thresholds for these surcharges are adjusted annually for inflation, and projections suggest these brackets will rise modestly in 2026 and beyond, potentially affecting more beneficiaries as incomes and inflation change.
Looking beyond 2026, the trend of rising Medicare costs is expected to continue due to ongoing healthcare inflation, advances in medical technology, and demographic factors
