Understanding Medicare Cost Changes for 2026

Medicare beneficiaries will see changes to their premiums and deductibles in 2026. Costs for Medicare Parts A, B, and D are projected to increase. Understanding these upcoming adjustments to your premiums, deductibles, and other out-of-pocket expenses is essential for managing your healthcare budget effectively. The exact amounts you pay will depend on your specific plan choices and income level.

It’s also important to be aware of the Income-Related Monthly Adjustment Amount (IRMAA), a surcharge applied to Part B and Part D premiums for individuals with higher incomes. For high earners, this can add a significant amount to monthly costs, with Part B surcharges ranging from $81.20 to $487.00 and Part D surcharges from $14.50 to $91.00.

Each year, Medicare’s open enrollment period runs from October 15 to December 7. This is your annual opportunity to review your coverage. During this time, you can move from Original Medicare to a Medicare Advantage plan, or switch back. You can also select a different Medicare Advantage plan or a new Part D prescription drug plan for the upcoming year.

Part A: Hospital Insurance Costs

The Medicare Part A deductible for inpatient hospital stays is set to rise to $1,736 in 2026, an increase of $60 from the 2025 figure of $1,676. This deductible covers the beneficiary’s share of costs for the first 60 days of an inpatient hospital admission within a benefit period.

A new benefit period begins each time you are admitted to a hospital and haven’t received any inpatient hospital care for 60 consecutive days. Because there is no cap on the number of benefit periods you can have in a year, it’s possible to pay the Part A deductible multiple times annually.

For hospital stays that extend beyond 60 days, daily coinsurance payments apply. In 2026, the coinsurance for days 61 through 90 will be $434 per day, which is up $15 from $419 in 2025. For lifetime reserve days (days 91 and beyond), the daily cost increases to $868, a $30 jump from the 2025 amount of $838.

If you require care in a skilled nursing facility, the daily coinsurance for days 21 through 100 of extended care will be $217.00 in 2026. This is a $7.50 increase from the 2025 rate of $209.50. It is crucial to remember that Part A does not cover long-term custodial care, which includes assistance with daily activities like bathing and eating.

Part B: Medical Insurance Premiums

For 2026, the standard monthly premium for Medicare Part B will be $202.90. This represents a nearly 10% increase, or $17.90 more than the $185 premium in 2025. Additionally, the annual deductible for Part B beneficiaries will rise to $283 in 2026, a $26 increase from the 2025 deductible of $257.

Part B coverage includes doctor’s appointments, outpatient care, durable medical equipment, home health services, and various preventive services. After you have met your annual deductible, you are typically responsible for 20% of the Medicare-approved amount for most services. This 20% share is known as your coinsurance.

Higher Premiums for High Earners (IRMAA)

Individuals with higher incomes pay an additional amount for their Part B coverage through the IRMAA surcharge. This amount is determined annually based on your income reported to the IRS. If your income fluctuates from year to year, your IRMAA status could also change. The Social Security Administration (SSA) will notify you if you are required to pay an IRMAA, explaining the new premium amount.

This surcharge means that higher-income beneficiaries cover a larger portion of their Part B costs. For 2026, if your 2024 adjusted gross income (AGI) was over $109,000 (for single filers) or $218,000 (for married couples filing jointly), you will pay a surcharge between $81.10 and $486.50 on top of the standard premium.

Part D: Prescription Drug Plans

If you have a standalone Part D prescription drug plan, you’ll need to check your monthly premium and drug formularies. The same applies if you’re enrolled in a Medicare Advantage plan that includes drug coverage.

The maximum annual deductible for Part D plans will be $615 in 2026, which is $25 more than the 2025 deductible of $590. The cap on out-of-pocket drug costs, will be $2,100 in 2026, up slightly from $2,000 in 2025. This cap applies only to medications covered by your specific Part D plan and does not include spending on drugs covered under Part B, such as certain injections administered by a physician.

Payment Plan Option

Part D enrollees have the option to spread their out-of-pocket costs throughout the year. The Medicare Prescription Payment Plan allows you to pay a set monthly amount instead of facing large, one-time costs at the pharmacy. If you opt into this program through your Part D plan provider, you will be billed monthly for your share of prescription costs. This bill is separate from your regular plan premium. You can directly opt in to the Medicare Prescription Payment Plan through your Part D plan sponsor.

IRMAA for Part D

Similar to Part B, a surcharge for high earners applies to Part D coverage. If your 2024 AGI exceeds the thresholds of $109,000 (single) or $218,000 (married filing jointly), you will pay an additional amount for your prescription drug plan. This surcharge ranges from $14.50 to $91.00 per month and applies even if your drug coverage is part of a Medicare Advantage plan.

Covering the Gaps: Medigap and Medicare Advantage

Original Medicare does not cover all healthcare expenses. Part B, for instance, only covers 80% of outpatient services, leaving a 20% gap. Furthermore, services like routine dental, vision, and hearing care are not covered. You have two main options to address these gaps: purchase a Medigap policy or enroll in a Medicare Advantage plan.

Medigap (Medicare Supplement Insurance)

Private insurance companies sell Medigap policies to help cover out-of-pocket costs like deductibles and copayments that come with Original Medicare. These plans are standardized and labeled with letters A through N. A plan with a specific letter offers the same basic benefits regardless of the insurance company selling it.

Medicare Advantage (Part C)

A Medicare Advantage plan is an all-in-one alternative to Original Medicare. These plans, sometimes called Part C, are offered by private companies approved by Medicare. If you join an MA plan, you get your Part A and Part B benefits through the plan, and most also include Part D prescription drug coverage. You cannot have both a Medigap policy and a Medicare Advantage plan.

MA plans often have lower premiums than Medigap policies but may come with higher deductibles and copayments. They also typically have provider networks, which may limit your choice of doctors and hospitals. Unlike Original Medicare, MA plans have an annual maximum out-of-pocket limit. For 2026, this limit is $9,250 for in-network services and $13,900 for out-of-network services.

It’s important to check your plan’s Annual Notice of Change, as some major insurers are reducing their plan offerings in 2026, which could affect your coverage.

If you are feeling uncertain about how these changes could impact your coverage or need assistance in choosing the right plan for your needs, Health Options NY is here to help. We can provide personalized guidance and ensure you make informed decisions about your healthcare coverage.

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