Retirees, Get Ready for This Unpleasant Medicare Surprise in 2026

Is it too soon to begin looking forward to the new year? I don’t think so. Only 87 days remain in 2025. The time will fly by quickly.

There’s usually plenty of eager anticipation and hopefulness as one year ends and the next year begins. That’s likely to be the case again as 2025 draws to a close. But retirees should get ready for an unpleasant Medicare surprise in 2026.

Medicare Part B covers doctors’ visits, outpatient care (including some prescription drugs), ambulance services, and more. The standard monthly Medicare Part B premium currently stands at $185. This amount rose roughly 5.9% from the standard premium of $174.70 in 2024. However, retirees should brace to pay much more next year.

In July, the Medicare trustees released a report that projected the Medicare Part B premium in 2026 would soar 11.6% higher to $206.50. That’s almost twice the percentage premium increase for 2025.

This won’t be the highest percentage increase for Medicare Part B. In 2022, the program’s premium skyrocketed 14.5%. This jaw-dropping jump stemmed in part from the Centers for Medicare and Medicaid Services (CMS) anticipating significantly higher costs from a new Alzheimer’s disease drug, Aduhelm. Those higher costs didn’t materialize, so Medicare Part B premiums were actually lowered the following year.

But the dollar increase expected for Medicare Part B premiums is $21.50. That’s almost as high as the $21.60 increase in 2022. And it will significantly offset the anticipated Social Security cost-of-living adjustment (COLA) of 2.7% next year for anyone receiving close to the average retirement benefit.

Unfortunately, there’s more bad news. The Medicare Part B annual deductible will also likely increase by 12% to $288 next year. While some retirees may not reach this higher deductible, many will.

One key reason why Medicare Part B premiums are likely to jump so much in 2026 is a surge in utilization of Part B services. A quick look at the stock charts for Medicare Advantage providers underscores this issue. While Medicare Advantage is different from Medicare Part B, the challenges the programs face are similar. Shares of companies such as UnitedHealth Group (NYSE: UNH) plunged earlier this year in large part because the health insurance giant’s profits were much lower than expected due to increased utilization of services.