Medicare premiums will rise sharply in 2026, creating new financial pressure for millions of older Americans. Medicare Part B premiums will increase to $202.90 per month, up $17.90 from $185 in 2025. This 9.7% jump is one of the largest increases in recent years.
For many retirees, this higher cost will reduce most of the 2.8% Social Security cost-of-living adjustment (COLA), which adds about $56 per month.
The Centers for Medicare & Medicaid Services (CMS) attributes the rise to higher medical prices, greater service use, and a growing shift from hospital care to outpatient care.
More procedures, including many physician-administered drugs, are now performed outside hospitals. Rachel Schmidt of Georgetown University notes that aging baby boomers are also increasing demand for surgeries and complex treatments in outpatient settings.
CMS highlighted one major cost driver: skin substitute treatments, which exceeded $10 billion last year. Without new cuts in the 2026 Physician Fee Schedule, Part B premiums would have risen an additional $11 per month. The new policy reduces spending on these products by 90%. National health spending also grew 8% in 2024, rising faster than the overall economy.
Medicare Advantage (MA), which covers more than half of all beneficiaries, is shrinking for the second year in a row. Health plans face costs that are rising faster than federal payments. Consulting firm Oliver Wyman predicts a 10% drop in MA plan availability nationwide, leaving about 2 million seniors with fewer choices.
Six Medicare Advantage organizations will exit completely, affecting about 100,000 people. Large insurers—including CVS Aetna, Humana, UnitedHealthcare, and Elevance—plan to leave more than 100 counties. In Vermont, some counties will have no MA plans at all after exits by Blue Cross and UnitedHealthcare.
Supplemental benefits are also declining. Many seniors will see reduced dental, vision, and over-the-counter allowances. In-network out-of-pocket limits will rise about 10%, even though federal rules slightly lowered the maximum limit to $9,250.
Special Needs Plans (SNPs), which serve people with chronic conditions or low incomes, will expand and make up about one-third of all MA offerings. Meanwhile, MA-only plans will fall by 13%.
Medicare Part D prescription drug plans will see mixed premium changes. Some plans will increase premiums by as much as $50 per month, even with subsidies created under the Biden administration. Standalone Part D options continue to decline and have dropped by half since 2024. According to KFF, beneficiaries will have an average of 32 MA-PD choices, slightly fewer than last year’s total of 5,633 plans nationwide.
CMS Administrator Dr. Mehmet Oz says seniors will still have many “broad and affordable options.” But analysts caution that older adults now face rising medical expenses across the entire system—employer plans, Affordable Care Act plans, and essential goods all cost more. The “hold harmless” rule will protect Social Security recipients with low monthly benefits (about $640 or less) from the full Part B increase. However, this protection shifts the cost onto other Medicare participants.
These increases reflect wider trends seen in private insurance and add to the financial strain many retirees already feel. Experts encourage seniors to compare their coverage carefully during open enrollment from October 15 to December 7. Core Special Needs Plan benefits remain strong, but extra benefits such as grocery cards may be reduced.
As more than 80 million Americans prepare for these changes, the growing gap between rising premiums and modest COLA increases raises deeper concerns about the future of federal programs. Social Security is projected to face solvency issues by 2035, and Medicare by 2036, if healthcare costs continue to rise unchecked.
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