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For 2026 our Plan G Medigap premiums increased about 14% to $311.03 and $324.86. Our Part D premiums increased from $18.00 to $72.30 per month. And, the standard Part B premiums increased to $202.90.
These premiums total $1,186.29 per month for both of us, $14,235 a year. IRMAA adds several hundred dollars more per person, per month.
Even ignoring IRMAA, the basic premiums – unrelated to income – can be a hefty hit to income for retirees, especially for anyone living only on Social Security or even close to it. Of course Medigap premiums vary considerably, including by location and MA is an option, but then out of pocket costs can be a concern.
The median 65+ household income is about $55,000. So, basic premiums are around 25% of income and more for retiree couples below the 50th percentile.
Even the Affordable Care Act has some premium cost share limits.
Among large employers, coverage is considered affordable if the employee’s required contribution for the lowest-cost employee-only plan that meets minimum value does not exceed a specified percentage of the employee’s household income.
This percentage is indexed annually by the IRS and set at 9.96% for plan years beginning in 2026 (up from 9.02% in 2025 and the original statutory 9.5% baseline).
So, it seems retirees may not have the best deal when it comes to paying health insurance premiums – even with heavy taxpayer subsidies – 75% of Part B costs.
Everyone’s numbers are all over the board…as are the feelings regarding how good seniors have it.
Both my wife and I take a prescription drug that has an exorbitant cost. Hers was $1,400 a month, and mine was $1400 per 3 months in 2025…I don’t have the price yet for 2026. I sincerely hope President Trump’s efforts to bring down drug prices in the US are successful, but either way, we will both Max Out our Plan D Maximum OOP before mid-year.
For my wife and I we have the following costs:
Medicare Part B Kevin (2026) $202.90 $2,434.80
Medicare Part B Kim (2026) $202.90 $2,434.80
Med Sup – Kevin Plan G. (Annual) $1,516.44
Med Sup – Kim Plan G (Annual) $1,154.88
Medicare Part D Premium Kevin – $43.20
Medicare Part D Premium Kim – $43.20
Medicare Part D Deductible Kevin – $615.00
Medicare Part D Deductible Kim – $615.00
Deductibles Part B Deductibles – $283 ea. -$566.00
Maximum Out Of Pocke7 $4,200.00
Total Cost for Medicare in 2026 will be approixmately $13,623.32, assuming no hospitalizations.
We do not have IRMAA issues due to proper lifetime income planning.
Gross Income for 2025 was @133,000. Taxable income for 2025 was $5,320. Inocme Tax due for 2025: $368 Federal, $107 State. We will actual recieve a refund of $3791, because in 2025 I had dollars voluntarily withheld for the first 6 months of the year, from our social security benefits.
No Pension…Social Security, Annuity Income (72% Inocme Tax Free), and 4% Withdrawals from a brokerage account. (Zero Capital Gains). We will enjoy basically no income taxes due for 2026-2029.
Our Medicare, including MA and drug plans is less. My monthly is $228 or $2,736 per year. My spouse’s is similar and her drug supplemental insurance is $20 per year. Our total is about $5,500 per year.
I was under extreme care for cancer in 2023 & 2024. My out-of-pocket was less than 1% of the total of the medical bills.
Our current insurance is a bargain compared to what we were paying for my spouse’s “Affordable Care Act” (Obamacare) mandated insurance. Her insurance was about $10,000 per year and there was a $3600 deductible, as I recall. We had reviewed all plan options. This was the best price we could get for her. “Wealth Transfer”.
More like a 60+ Million person risk pool and general taxpayer subsidies plus your FICA taxes.
Medicare+Medigap plan—you’ve got the BEST coverage even though the premiums are relatively high.
I definitely plan for Medicare costs. I am looking forward to being on Medicare! Currently I am on ACA medical insurance. My monthly premiums are expected to drop once I move to Medicare. Once on Medicare, I plan to reimburse myself for my Medicare, including IRMAA, with my Health Saving Account. I will have more than enough in my Health Savings account to pay for a life time of Medicare for both myself and my husband.
Keep in mind you can’t use your HSA for Medigap.
Yup! That’s correct. 🙂
I’m a young Medicare recipient compared to many of you, but in my few years in the program, I found I have to shop Part D every year. There are multiple changes in program co-pays, deductibles and eligible drugs that have a huge financial impact. You can’t just look at the premium. You have to model out your actual drug usage and compare the total cost every year.
My Medigap plan (Plan G) has followed the Medicare program changes and “normal” inflation changes. Not cheap, but less drama.
Medigap plans have no choice except to follow Medicare changes. If Medicare raises the deductible, Medigap pays the new amount- if the plan covers the deductible.
Absolutely, and the Medicare website makes it easy. I am currently in remission from rheumatoid arthritis. The very expensive drug I was on was not covered by the cheap Part D plan I had last year – only expensive United Health plans covered it at all. This year the plan costs slightly more ($3.50/month instead of no premium), and does cover the drug. Go figure.
I am 81 and have a number of chronic conditions that require periodic visits as well as things that flare up from time to time. I have consumed a lot of health care since retirement at age 66. I have yet to encounter a doctor or medical practice that does not accept Medicare.
Only about 1/3 of psychiatrists accept Medicare.
Dentists. Many podiatrists. There are lots of boutique MD practices that don’t accept Medicare.
And even more medical practices that won’t accept new Medicare patients.
Original Medicare doesn’t cover dentistry, although some Medicare Advantage plans do have some coverage. The dental insurance available to seniors is worthless. Dentists in my area offer their own version of insurance – pay them so much a year/month for defined treatments.
But you are right about doctors not accepting new Medicare patients – or in some cases any new patients. Some practices will keep you if you transition to Medicare, while not accepting new Medicare patients.
As I understand it, if you are really poor, you don’t have to pay part B premiums.
On the other hand, if you are really well-off like me and Quinn, you will pay quite a lot. We have the income to pay it – it’s easier for me to pay $600 a month then for a moderate-income retiree to pay the $203.
Everyone enrolled in Part B must pay the premium. However, the poor like those on Medicaid have the premium paid by someone else. There are other programs that pay the premium for the very low income or poor.
Pre retirees need to be honest with themselves about all of their future costs, not just healthcare expenses. It doesn’t matter if the planning is on the dreaded spreadsheet or the back of a napkin, if they sugarcoat those numbers, they’re setting themselves up for failure.
I know many people around the median income. Many have jumped on MA plans in order to keep costs at bay.
My wife and I have been on Aetna MA since we retired in 2019 because it is covered by her retirement benefit program as a former City of NY employee (she was a professor at CUNY). We have never had a problem finding high quality health care providers but I suspect that the large number of retirees in this plan gives the City of NY bargaining power that individual MA participants lack.
They might keep “costs at bay”, but only until they get seriously sick, then deductibles and copays kick in which is usually thousands of dollars. When we were on an ACA plan when we retired before we were eligible for Medicare we had bronze plans and paid essentially no premiums for four years. One of those years however I had an ER visit which cost me 5K in deductible. But overall we made out like bandits. For Medicare we went with plan G which was more expensive but after paying the federal part B deductible we have no other bills. We are lucky to be able to afford the higher premiums, but it also helps with budgeting by knowing at the beginning of the year what our healthcare costs are.
Right. My insurance agent won’t even write MA plans. I also have Plan G; it is the best insurance I’ve had, maybe ever.
Like you, I made use of the ACA prior to marrying Chris and getting on her group policy. I had huge deductibles but extremely low premiums, due to paltry income while building my business from scratch. I maxed out my HSA each year, investing in some Vanguard index funds, and had a nice chunk of money available when I turned 65.
I learned how to play the ACA game. We were retired and living off our investments. From the second year on we never paid a premium. First I would withdraw from our traditional until the limit for the full subsidy, then withdraw from an inherited Roth. A lot of people do not know that insurance companies are required per the ACA law to spend at least 80% of their premium payments on actual medical reimbursement. Any amount, below this must be returned to the policy holders on an equal basis whether or not they paid any premiums. Thus annually we were paid hundreds of dollars to have health insurance, this despite the fact that we are in the top decile for investment savings for retirees. My ability to manipulate the system proves that the ACA can be improved, I just don’t know how they could confirm assets without significant security risks.
Before I switched to Original Medicare when my MA plan was discontinued, I was driven crazy by frequent calls asking me to have an RN visit my home to review my medications. I’m a retired RN, currently of sound mind, and on four Tier One meds. Check out my refills, guys, and you will see that I’m taking exactly what I should! The other thing they did, to get to the required 80%, rather than reduce the capitation rate they were charging Medicare, was to send unordered, unwanted boxes of medical supplies, like Band Aids and OTC lozenges, occasionally. The one time I accepted a home visit, just to see if it was a job that I would like to do, the person was an NP. Can you imagine what that home visit was billed at? I know I’ve ranted about this before but five years later, it still bugs me. A money grab.
The one year I was on an MA plan I always said “no”. Eventually I blocked the number. I figured it was a way to come up with more treatments they could charge for. It also felt like it would be letting a medical spy into the house. (Of course, when I was a child doctors still made house calls, but this felt different.)
Why was I on an MA plan to begin with, you might ask? Doug was on expensive meds that were covered but without him, I switched to a cheaper plan and then, eventually, to Original Medicare.
We had MA for our first year because we were healthy and to take “advantage” of all the perks including in network pricing for a partial. There were no premiums and it had an excellent reputation (they pulled out of NH this year). We did this knowing full wee that we would switch to a traditional G plan going forward.
Yes they do, even if they are devoted to spreadsheets and budgets it is up to the individual to make prudent decisions.
All the variables make it difficult to plan for many years in the future. That is why I just can’t comprehend retirement replacing 80%, 70% or sometimes even less of pre-retirement income if a person has a choice.
It just seems to me there is not enough room to deal with the what ifs. It works until it doesn’t.
I can offer an example. During the early 2000s, the automakers were offering buyouts of $70k to $77K to many of their employees. Most of the production people had been earning around $110k/year due to massive amounts of overtime. I can understand their desire to retire from the factory jobs that consumed so much of their lives. So they looked at the buyout, and the pension (far less than 100% income replacement) and said, yea, I can live on that. Due to 30 and out, employees taking the buyout were as young as 48. A further enhancement to encourage takers, the company supplemented the pension with an amount equal to anticipated Social Security at age 62. (That enhancement stopped at age 62).
Employees taking the buyout for $77k, gave up a job that paid over $100k/year, missed years of additional pension credits, and had their SS benefit reduced by the years of missed payroll taxes.
Instead of being realistic about retirement income and expenses, they made their assumptions fit their desire to retire. Many are working at low pay jobs today to make the ends meet.
Personally, I thought that $77k was more of a trick than a buyout.
I put several similar programs together myself, including the SS temporary supplement. The number of takers always exceeded our assumptions as did the number who wanted their job back after retiring.
Forgetting that early retirement reduces ultimate SS benefits is a common thing.
I think this was a helpful post, Dick. People need to know what you wrote. When my mom was around your and Connie’s age, she switched to a MA plan because her costs were getting unaffordable. My sister, who handles her finances, started setting aside what she was paying in her Medigap policy to help pay for the deductibles and co-pays. So far Mom has come out ahead and it has been 5 years now. I check every year to see if another plan would be better, but hers has been good, financially. We have had some struggles with it when she has needed PT, though. Chris
Wait, let me get this straight, are you seriously suggesting that people should actually plan ahead and budget for their Medicare premiums? You know, like… responsible adults?
Is that what’s happening here? A budget suggestion, from RDQ?😉
Ah, planning to have sufficient income to cover expenses all expenses. No B word required.
😂
Same here. We’re about $1100/mo w two Medicare premiums and a BC/BS supplemental. No IRMAA yet but that’s coming when RMDs start but that’s down the road a bit. On the bright side, there is very little out of pocket exposure after the two plans cover their portions. We are running into some issues w Medicare w docs that won’t participate (sorry, you’re a “cash only” patient now) and some procedures where Medicare dictates they must be performed in a hospital vs an outpatient surgery center. Not sure I understand why since I’m sure a hospital is much more expensive and complicated. Maybe one of many reasons that healthcare is $$$$.
Interesting, with the scores of doctors we have seen and the many hundreds of thousands of dollars in claims, have never run into an issue. Very few doctors don’t participate. Frankly, i would not use one who didn’t no matter what. To me it says they are putting money ahead of patients even given Medicare fees allowed are too low.
I saw a non Medicare participating MD for a short while as I felt he was the most qualified. I saw him for only three visits and used my HSA for payment. It was worth every penny as I am pretty sure he was so competent that I saw him less than I would have if I had seen a Medicare participating MD. In many of the cases where MDs are not participating they have such an excellent reputation that they don’t have to settle for Medicare’s low reimbursements. Either way I was extremely satisfied with his services and informed him so.
Generally agree. Unfortunately it’s a specialty and hard to find top notch practitioners so we’re gonna eat it for now since it’s generally only twice a year. We’ve talked to some friends in the medical field about the Medicare refusal and their response has been “good luck finding someone” who is as good as your current doc.
Well, best of luck. You should verify the doctor has opted out of Medicare before you pay anything because that is rare. If you actually mean he will not accept Medicare assignment as payment in full, keep in mind the law limits the amount he can balance bill.
Less than 2% of doctors have opted out of Medicare.
I spent decades dealing with doctors, insurance and billing and I’m convinced there is no relationship between high costs and high quality care.
Thank you for making the distinction between not accepting assignment and opting out.
Thanks. It’s prob something we’ll re-visit at some point. Just hasn’t graduated from mildly annoying to full blown “This is BS!” yet. We’ll eventually get there. 🙂
The one exception is psychiatrists–only about 1/3 accept Medicare.
When I needed a hand surgeon some time ago I checked out the Hospital for Special Surgery (HSS) because of its reputation and found that a few surgeons didn’t take any insurance and that several were non-PAR providers. But overall I haven’t had problems finding excellent physicians who take Medicare.