Published on 27 Dec 2025

Why Medicare Premiums May Change in 2026

When I first started digging into Medicare numbers for a family member a few years ago, I assumed premiums only moved a few dollars here and there. Th...

Why Medicare Premiums May Change in 2026

en I watched a single policy decision ripple through the system and push costs up for millions of people. That’s when I really understood: Medicare premiums don’t drift—they react.

2026 is shaping up to be one of those reaction years.

In my experience helping readers walk through their Medicare decisions, the years that look quiet on the surface are often the ones where the math quietly shifts in the background—income brackets, trust fund rules, drug pricing reforms—and then premiums suddenly jump (or, occasionally, surprise us in a good way).

Let’s unpack why 2026 could be a pivot point.

Quick refresher: Which Medicare premiums are we talking about?

When people say “Medicare premiums,” they usually mean one (or more) of these:

Part A (Hospital Insurance) – Usually no premium if you or a spouse worked enough years and paid Medicare taxes.
Part B (Medical Insurance) – Standard monthly premium everyone on traditional Medicare pays, with higher costs if your income is above certain thresholds.
Part D (Drug Coverage) – Premiums set by private insurers, plus an extra income-based surcharge for higher earners.
Medicare Advantage (Part C) – Optional private plans; often low or even $0 premiums, but that doesn’t mean the underlying costs aren’t shifting.

When I tested different scenarios with clients back in 2023–24, the biggest "premium pain points" almost always came from Part B and Part D, especially for people hit by IRMAA (Income-Related Monthly Adjustment Amount). That’s exactly where a lot of the 2026 action may be.

Why Medicare Premiums May Change in 2026

1. Social Security COLA and the “hold harmless” twist

One of the sneakiest forces behind Medicare premiums is the Social Security cost-of-living adjustment (COLA). The Social Security Administration announced a 3.2% COLA for 2024, and future COLAs for 2025 and 2026 will influence how much flexibility Medicare has to raise Part B premiums.

Here’s the key rule I recently rediscovered while helping a neighbor decode their check:

> For most people, your net Social Security benefit can’t go down just because Part B premiums went up. This is called the hold harmless provision.

But there’s a catch: if COLA is small, Medicare has less room to raise premiums without violating that rule. Then, when we finally do get a bigger COLA, Part B premiums can play catch-up.

In my experience watching 2016 and 2017 premium patterns, that “catch-up” effect can be brutal. A few years of holding premiums back can turn into a sudden jump once the math resets. By 2026, we could easily be in another reset phase depending on inflation and COLA numbers over 2024–2025.

Why this matters for 2026:

If COLAs in 2024–2025 are modest and health costs rise faster, 2026 could see a bigger Part B premium adjustment.
People not protected by hold harmless—like new enrollees or higher-income beneficiaries—tend to feel the full force first.

2. The Medicare Hospital Insurance Trust Fund is on the clock

Whenever I speak with retirees, someone eventually asks, “Is Medicare going broke?” The short answer: no, not exactly—but parts of it are under real financial pressure.

Medicare is funded through several trust funds. The one I keep an especially close eye on is the Hospital Insurance (HI) Trust Fund, which pays for Part A.

According to the 2024 Medicare Trustees Report, the HI Trust Fund is projected to be depleted in the mid‑2030s if nothing changes. That doesn’t mean Part A disappears; it means incoming payroll taxes would only cover a share of promised benefits, forcing Congress to either:

Cut spending,
Raise taxes,
Shift money from elsewhere,
Or adjust premiums and benefit design.

Now, Part A premiums don’t affect most people (since many qualify for premium-free Part A), but pressure on the Part A trust fund tends to create broader reform conversations. And historically, big Medicare financing debates very often spill into:

Part B premium formulas
Cost-sharing structures
Incentives for Medicare Advantage

I’ve watched several budget cycles where lawmakers floated ideas like raising the share of Part B costs that beneficiaries pay (it’s currently about 25%, with the rest covered by general revenues). If anything like that gains traction around 2025 budget negotiations, we could feel the impact in 2026 Part B premiums.

3. Drug pricing reforms from the Inflation Reduction Act hit the system

When I first read the Inflation Reduction Act (IRA) of 2022, I remember thinking: this is the sleeper story for Medicare. Not just politically, but mathematically.

The IRA did a few big things that start to matter more as we move toward 2026:

Medicare can negotiate prices for certain high-cost drugs under Part D and, eventually, some Part B drugs.
It caps out-of-pocket drug spending for beneficiaries, with a $2,000 cap fully kicking in by 2025.
It limits how fast Part D premiums can grow for a period.

Here’s the twist I didn’t fully appreciate until I walked through the numbers with a pharmacist friend:

Lower drug prices and capped out-of-pocket spending don’t just help patients; they shift where the costs land—between Medicare, drug manufacturers, and private insurers.

For example:

If Medicare pays more of the tab to protect patients from high out-of-pocket costs, that can put upward pressure on Part B and Part D premiums.
If negotiations really drive down pricing on blockbuster drugs, that could slow premium growth.

By 2026, more negotiated prices will be in effect, and the Part D redesign will be in full swing. The Congressional Budget Office has estimated major federal savings from these provisions, but how those savings translate into your actual premium is not perfectly linear.

So the honest answer? 2026 premiums may either cool off or bump up depending on how insurers and CMS (Centers for Medicare & Medicaid Services) respond to the new cost-sharing dynamics. I’ve seen insurers react conservatively in the first few years of big reforms and then readjust once they have clearer data.

4. IRMAA brackets and the stealth tax on “higher-income” retirees

The first time a reader emailed me a screenshot of their Medicare bill with IRMAA charges, they wrote, “I thought I was middle class… why is Medicare treating me like a billionaire?”

IRMAA—Income-Related Monthly Adjustment Amount—kicks in for:

Part B and
Part D

if your modified adjusted gross income (MAGI) is above certain thresholds. For 2024, the first IRMAA bracket starts at $103,000 for single filers and $206,000 for married filing jointly.

Two key things to know about IRMAA heading into 2026:

Brackets are adjusted over time, but not always generously. If bracket thresholds don’t keep pace with wage growth, more people get pulled into IRMAA even when they don’t feel “high income.”
IRMAA is based on your tax return from two years prior. So your 2024 income can affect your 2026 Medicare premiums.

In my experience, this time lag blindsides a lot of new retirees. They have one big Roth conversion year or capital gain, then two years later their Medicare bill spikes.

If inflation, wage growth, or tax policy changes cause more people to cross IRMAA thresholds in 2024–2025, the 2026 premium picture could look surprisingly expensive for upper-middle-income retirees.

5. Medicare Advantage and the quiet cost shifting

I’ve sat at more than one kitchen table looking at a $0-premium Medicare Advantage brochure while the person across from me says, “How is this free? What’s the catch?”

Medicare Advantage (Part C) plans are funded partly by payments from Medicare to private insurers. Those payments are based on complex benchmarks, risk scores, and star ratings.

Recently, the Biden administration and CMS have been tightening some of those rules:

Scrutinizing risk-score inflation (where plans make enrollees look sicker on paper to get higher payments)
Tweaking benchmarks and quality bonus payments

If those payment reforms reduce how much insurers get per enrollee, insurers may respond in 2026 by:

Trimming extra benefits (dental, vision, OTC allowances)
Raising premiums for certain plans
Increasing copays or narrowing provider networks

I’ve already seen this cycle play out at the local level: a plan that was $0 premium one year suddenly adds a monthly charge the next, or drops a popular hospital from its network.

So even if your Part B premium looks stable on paper, your all‑in monthly cost for Medicare Advantage in 2026 may change.

6. What you can do now to prepare for 2026

I don’t love doom-and-gloom forecasting, and I try hard not to scare people about retirement. But I also don’t like surprises—especially expensive ones.

Here’s what I’ve found actually helps real people get ahead of Medicare premium changes:

1. Stress-test your budget

When I model Medicare costs with readers, I usually assume Part B and D premiums rise faster than general inflation—something like 4–6% per year. You don’t have to be that precise. Just:

Build in a cushion for higher premiums in 2026 and beyond.
Ask: “If my Medicare costs went up $40–$80/month in 2026, would I be okay?”

2. Watch your 2024–2025 taxable income

Because of the two-year lookback:

Big Roth conversions
One-time asset sales
Large IRA withdrawals

in 2024–2025 can show up as IRMAA surcharges in 2026.

I’m not saying don’t do them—sometimes the tax savings are worth it. But at least run the numbers with a tax professional or use the IRMAA tables on Medicare.gov so you’re not blindsided.

3. Compare plans every year, not just once

One mistake I’ve seen repeatedly: people pick a Part D or Medicare Advantage plan at 65 and never look again. By the time a reader emails me at 72, they’ve overpaid for years.

Before 2026 rolls around:

Use the Medicare Plan Finder tool during Open Enrollment.
Check whether another plan could offset any premium increase with lower drug or copay costs.

4. Follow trusted, non-hype sources

There’s a lot of noise around Medicare changes, and some of it is driven by aggressive marketing. Personally, I stick to:

Medicare.gov and the Medicare Trustees Report
Nonprofit groups like KFF (Kaiser Family Foundation)
Major outlets with solid data desks (NYTimes, Washington Post, etc.)

I’ve found these sources are much better at separating “this might happen” from “this is becoming law.”

The honest bottom line for 2026

If I strip away the jargon and the politics, here’s how I’d frame it to a friend over coffee:

Yes, Medicare premiums may change in 2026, and there are real forces pushing in both directions.
Drug pricing reforms could ease some pressure, but trust fund and budget realities, IRMAA creep, and plan-level adjustments may push costs up.
The people most at risk of a painful surprise in 2026 are:
New retirees who don’t understand IRMAA
Folks who had a high-income year in 2024 or 2025
Medicare Advantage enrollees who assume their plan will always stay $0 premium with the same benefits

In my experience, the people who do best with Medicare aren’t the ones who obsess over every rumor; they’re the ones who:

Build a bit of margin into their retirement budget
Check their plan options every year
Keep one eye on credible policy updates instead of the loudest headline

2026 isn’t guaranteed to be a crisis year for Medicare premiums. But it is a year where several slow-moving policy gears line up. Paying attention now gives you more options later—and fewer “why is my bill so high?” moments when the letter from Social Security lands in your mailbox.