Your Medicare Costs Are Set to Soar: What to Expect Over the Next Decade
Similar to Social Security, Medicare is facing funding issues. You may have heard that the Hospital Insurance fund for Medicare Part A is expected to be able to fully pay scheduled benefits only until 2033, three years sooner than last year’s projection. However, it’s not as if the cost of Medicare will stay steady and suddenly increase in 2033. Instead, Medicare beneficiaries have a more immediate problem in the form of rising premiums and surcharges starting in 2026 and continuing over the next decade.
The 2025 Medicare Trustees Report projects a steady increase in Medicare Part B premiums and IRMAA surcharges over the next nine years. The projections are based on expected rises in healthcare costs, particularly for outpatient hospital services and physician-administered drugs. It’s crucial for retirees and those approaching retirement to understand these projections for proper financial planning.
It’s essential to note that these projections are subject to change, and the official figures may vary. The Centers for Medicare and Medicaid Services (CMS) will release the official numbers this fall.
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Projected Medicare Part B Premium
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The projections in the 2025 report show a significant increase compared to last year’s report. The largest year-over-year jump is expected between 2025 and 2026, with a projected increase of $21.50, setting the 2026 Part B premium at $206.50, up from $185.00. The 2024 report projected a 1% increase from 2025 to 2026, with premiums rising to $186.90, only $1.90 more.
The report estimates that the standard monthly premium for Medicare Part B will potentially reach almost $350 by 2034. If the estimates are accurate, the Part B premium is expected to increase by 188% by 2034.
Here is a table with the projected standard monthly premiums:
|
Year |
Projected standard monthly premium |
Projected Part B deductible |
|---|---|---|
|
2026 |
$206.50 |
$288 |
|
2027 |
$218.60 |
$305 |
|
2028 |
$231.30 |
$323 |
|
2029 |
$247.40 |
$346 |
|
2030 |
$264.70 |
$370 |
|
2031 |
$281.60 |
$394 |
|
2032 |
$300.80 |
$421 |
|
2033 |
$325.90 |
$456 |
|
2034 |
$347.50 |
$486 |
Projected Medicare Part B IRMMA surcharges
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The IRMAA is a monthly surcharge added to the standard Part B premium. The SSA uses the most recent complete federal tax return data to assess your liability for the IRMAA. For 2026, the SSA will look at your 2024 tax return to calculate the surcharge you owe, if any.
These surcharges, which affect high-income beneficiaries, are expected to grow significantly over the next nine years.
Essentially, those who pay the IRMAA are paying a greater share of their actual Medicare Part B and D premiums. As it stands, the government pays a substantial portion — about 75% — of the Part B premium for most beneficiaries who pay, on average, the remaining 25%. For 2024, premiums from Parts B and D covered 23% of Medicare program costs, according to the 2025 Trustees’ Report.
If you are a higher-income beneficiary, you will pay a larger percentage of the total cost of Part B based on income reported on your annual tax return. You’ll pay monthly Part B premiums equal to 35%, 50%, 65%, 80%, or 85% of the total cost, depending on your income and subsequent surcharge amount. For 2025, the IRMAA Part B surcharge ranged from $185.00 to $443.90 per month, or $2,220 to $5,326.80 annually, on top of the base premium of $185.00.
For 2026, the standard Part B premium is projected to be $206.50, and monthly Part B surcharges will range from $82.60 to $495.60.
Here is a table with the projected Part B IRMAA surcharges:
| Header Cell – Column 0 |
2026 |
2027 |
2028 |
2029 |
2030 |
|---|---|---|---|---|---|
|
Tier 1- 35% |
$82.60 |
$87.40 |
$92.50 |
$99.00 |
$105.80 |
|
Tier 1- 50% |
$206.50 |
$218.60 |
$231.20 |
$247.40 |
$264.60 |
|
Tier 1- 60% |
$330.40 |
$349.80 |
$370.00 |
$395.80 |
$423.40 |
|
Tier 1- 80% |
$454.30 |
$480.90 |
$508.70 |
$544.30 |
$582.20 |
|
Tier 1- 85% |
$495.60 |
$524.60 |
$555.00 |
$593.80 |
$635.10 |
| Header Cell – Column 0 |
2031 |
2032 |
2033 |
2034 |
|---|---|---|---|---|
|
Tier 1- 35% |
$112.60 |
$120.30 |
$130.30 |
$139.00 |
|
Tier 1- 50% |
$281.50 |
$300.70 |
$325.80 |
$347.50 |
|
Tier 1- 60% |
$450.40 |
$481.20 |
$521.30 |
$556.00 |
|
Tier 1- 80% |
$619.40 |
$661.60 |
$716.80 |
$764.50 |
|
Tier 1- 85% |
$675.70 |
$721.80 |
$782.00 |
$782.00 |
Other factors that contribute to IRMMA surcharges
As I explained above, the IRMAA surcharge shifts responsibility for a greater portion of Part B premiums from the Medicare trust fund directly to high earners. However, politics also plays a role in determining how many people pay the IRMAA by adjusting thresholds, freezing inflation adjustments and changing methodologies.
Effective in 2018, the Medicare Access and CHIP Reauthorization Act of 2015 lowered certain income thresholds used to determine the IRMAA amounts that beneficiaries must pay, resulting in a greater number of beneficiaries paying the higher amounts. Moreover, beginning in 2020, the legislation adjusted the methodology used to index the thresholds, and accordingly, more beneficiaries will be subject to the income-related premiums.
Lastly, the Bipartisan Budget Act of 2018 established an additional premium level that took effect in 2019 for individuals with incomes at or above $500,000 (and couples with incomes at or above $750,000), who pay a premium covering 85% of the average program cost. These thresholds will not be indexed until 2028 at the earliest.
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