Medicare in 2026: What Just Got More Expensive (and What Didn't)

A couple from Westport came to a Retirement 101 seminar last winter. Both 66, both newly on Medicare, both staring at the letter that came in the mail in November telling them what their 2026 Part B premium would be. He looked at me at the break and said, "Matt, this is one hundred and eighty-five dollars a month per person last year. Now it's two hundred six dollars and fifty cents. Did I miss a memo?" You didn't, sir. The whole country missed it. The 2026 Part B premium hike is one of the biggest year-over-year jumps in a decade, and most retirees found out the hard way — by opening the envelope. So let's walk through what actually changed in 2026, what stayed the same, and what to do about it. Plain English. Current numbers. No insurance-broker spin.

I am going to keep this article focused on the things that changed for 2026 and the things you can actually act on. There is a lot more to know about Medicare than what fits on this page, and we cover the rest at the Retirement 101 seminar. But the four big shifts this year — the Part B jump, the new Part D cap, the IRMAA bracket move, and the continued Massachusetts safe-harbor on Medigap — are the four every Medicare-eligible person in southeastern Mass should understand.

The 2026 numbers worth memorizing

The Part B number is the one that hurts. $206.50 a month, twice — for a couple — is $4,956 a year just for Part B coverage. That is before any deductibles, any Part D plan, any Medigap or Medicare Advantage premium, any of the actual care. It is the cover charge. And it is going up faster than a lot of pre-retirees built into their budgets.

The good news, if you can call it that: the Part D cap is doing exactly what it was designed to do. The $2,100 ceiling means that if you have an expensive specialty drug — a cancer therapy, a biologic, the kind of medication that used to send retirees into "donut hole" misery — your annual out-of-pocket on prescriptions stops at $2,100. That is a structural improvement no retiree has had before 2025. It is permanent. It will index up modestly each year. And it caps a real source of catastrophe for people on fixed incomes, right?

The IRMAA cliff — and why one extra dollar can cost you thousands

Here is the part of Medicare that almost nobody plans for and almost everybody hits: the income-related premium surcharge, called IRMAA. It stands for Income-Related Monthly Adjustment Amount, and what it really means is this — if your modified adjusted gross income is above certain thresholds, you pay extra for Part B and Part D. The surcharge is not optional. It is calculated automatically by Social Security based on the tax return you filed two years ago. So your 2026 IRMAA is based on your 2024 income.

The 2026 brackets, simplified to the joint-filer numbers:

• 2024 MAGI under $218,000 (joint): standard $206.50 Part B premium per person. No surcharge.
• $218,000 to $274,000: Part B becomes $289.10/person. Part D adds about $14/month.
• $274,000 to $342,000: Part B is $412.90. Part D adds $35.
• $342,000 to $410,000: Part B is $536.80. Part D adds $57.
• $410,000 to $750,000: Part B is $660.70. Part D adds $79.
• Above $750,000: Part B is $701.90. Part D adds $86.

And here is the brutal part — IRMAA is a cliff, not a slope. One dollar over a bracket means you pay the full surcharge for that whole tier for the entire year. Both spouses. So a couple whose 2024 income lands at $218,001 instead of $217,999 pays roughly $1,983 extra in 2026 Medicare premiums for that one dollar. Each spouse. Almost four thousand dollars in surcharges from a single dollar. Wild, right?

The reason this matters most for people in their early sixties is the look-back. If you take a big capital gain in 2024 — sell a house, do a Roth conversion, take an unusual distribution — that two-year-later 2026 Medicare bill is the one that catches the bullet. This is one of the planning conversations that actually has to happen before you do the transaction, not after. Once the tax return is filed, IRMAA is baked in.

Medicare Advantage hit 54% — and started losing plans

For the first time, more than half of Medicare-eligible Americans are now in a Medicare Advantage plan rather than Original Medicare with a Medigap supplement. The latest count puts MA enrollment at roughly 54% of the eligible population. That is up from 19% in 2007 — nearly tripled in two decades.

And yet — 2025 and 2026 have been the messiest years for Medicare Advantage in the program's history. Humana exited 13 markets for 2025, displacing roughly 560,000 enrollees. UnitedHealth and CVS/Aetna trimmed plan offerings. Plans changed networks mid-year. People got non-renewal letters in October and were defaulted into different plans with different formularies and different doctor networks. The "$0 premium" Medicare Advantage that was supposed to be simple turned out, for a meaningful number of retirees, to be a moving target.

I am not anti-MA. The plans work for some people, and for some retirees the lower out-of-pocket costs are a real benefit. But there is a structural fact that gets buried in the marketing: Medicare Advantage plans deny prior authorization requests for services that would have been covered under Original Medicare at meaningful rates. The HHS Office of Inspector General studied this in detail and found that roughly 13% of MA prior-authorization denials were for services that met Medicare's coverage rules — services Original Medicare would have paid for without a fight. About 81% of those denials are overturned when appealed — but only about 10% of denials are ever appealed. Most people just accept the no.

If you are healthy now, this may not feel like a big deal. If you become sick later, it can feel enormous. That is the trade-off built into MA. Lower premiums today, higher friction at the moment you most need the coverage. Tools, jobs, right tool for the right job — same principle as everything else in retirement planning.

The Massachusetts safe-harbor on Medigap (still your structural advantage)

Here is the rule that almost every Medicare-eligible person in Massachusetts should understand, because it is one of only four states that has it. Most states have medical underwriting on Medigap policies after your initial six-month enrollment window plus the twelve-month MA "trial right" expires. That means once you've been on Medicare Advantage for more than a year, in most states, you cannot freely switch to a Medigap plan — the insurance company can deny you, charge you more, or impose a pre-existing condition waiting period based on your health.

Massachusetts does not allow that. Neither do Maine, New York, or Connecticut. Those four states require community-rated, year-round guaranteed-issue Medigap. What that means in practice:

• You can switch from Medicare Advantage to a Medigap supplement at any time, without medical underwriting.
• Your premium cannot vary based on your age, gender, or health condition.
• Massachusetts also has an annual open-enrollment window — February 1 through March 31 — where you can switch supplement plans freely.

If you are reading this in Massachusetts and you are on Medicare Advantage, this rule is the reason your situation is different from your friend in Florida. In Florida, switching to Medigap after a cancer diagnosis can become impossible. In Massachusetts, it doesn't. That is a structural safety net most pre-retirees in MA do not realize they have.

One wrinkle on the Massachusetts side: MA uses its own standardized supplement plans called Core, Supplement 1, and Supplement 1A — not the federally lettered Plan G or Plan N you see in other states. Supplement 1A is the closest analog to Plan G nationally. Premiums in MA tend to run roughly $180 to $280 a month for Supplement 1A, community-rated. Higher than a $0-premium MA plan, lower than the surprise bills you can get from MA when a service gets denied.

The HSA-and-Medicare gotcha (this one's important)

A trap that catches a lot of people working past 65: if you collect Social Security at any point past your 65th birthday, you are automatically enrolled in Medicare Part A. Social Security and Medicare Part A are linked. Some people don't realize this until after the fact.

The problem: once you are enrolled in any part of Medicare, you can no longer contribute to a Health Savings Account. And here's the worse part — Part A has a six-month retroactive enrollment when you sign up for Social Security past 65. So if you contributed to an HSA in those six months, you've now made an excess contribution and owe a 6% excise tax on it.

If you are working past 65 with employer coverage, plan to keep contributing to an HSA, and intend to delay Medicare until you actually retire, you need to also delay Social Security past 65. The two have to be coordinated. Most pre-retirees don't know this and find out at tax time. Brutal.

What this looks like in practice

Here is how I'd prioritize these changes if you and I were sitting across from each other at the lab portion of a seminar:

• Plan for the 2026 Part B jump in your budget. $4,956/year for a couple is the new floor. If your 2026 cash-flow plan was built on 2025's $4,440, fix it.
• Watch your 2024 income carefully — the IRMAA cliff is real. If you sold a house, did a Roth conversion, or took a big distribution in 2024, your 2026 Medicare bill is going to surprise you. Some of these surcharges can be appealed if you've had a "life-changing event" like retirement; a Form SSA-44 is the path. Don't miss the window.
• If you're considering Medicare Advantage, run the math both ways. What does the worst case look like — denied prior auths, network exclusions, plan non-renewal? Massachusetts gives you the off-ramp; not every state does.
• If you're on Medicare Advantage and your health has changed, use Massachusetts's annual open enrollment window. Feb 1 through March 31 — guaranteed-issue switch to Supplement 1A or another supplement plan, no underwriting. Most pre-retirees don't know this exists.
• If you're working past 65 with HSA contributions, delay Social Security. The two are linked. Get this wrong and the IRS charges you the excise tax.

The point of all of this — the budget planning, the IRMAA timing, the Medigap-versus-Advantage decision — is the same as everything else in retirement. You want to know what your costs are, what your coverage actually covers, what happens if you get sick, and what your fallback is if your plan changes its mind. Get those four answered and you can typically sleep at night. Not knowing any of them is what gets people in trouble.

The bottom line

Medicare in 2026 got more expensive in some ways — the Part B jump is real, the IRMAA cliff is unforgiving — and structurally better in others, with the Part D cap doing exactly what it was meant to do. The bigger picture, though, is that Medicare is one of six interconnected pieces of a retirement plan, and the right Medicare decision depends on what your income looks like, where you live, and what your tolerance is for friction at the moment you actually need care. Get those answered and the rest gets easier. Get them wrong and you'll find out the same way the gentleman from Westport did — when you open the envelope.