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The 2026 Medicare Cost Components
Medicare costs come from four main sources: Part B premiums (the main monthly charge), IRMAA surcharges for higher incomes, supplemental coverage (Medigap or Medicare Advantage), and Part D drug coverage. Understanding each component lets you accurately budget for healthcare in retirement.
Part B Premium: $202.90/Month Standard
The standard 2026 Part B premium is $202.90/month ($2,434.80/year) per person, and the annual Part B deductible is $283. This covers doctor visits, outpatient services, and preventive care. It's automatically deducted from your Social Security check if you receive benefits; otherwise paid directly to Medicare. This is the baseline everyone starts from — but higher incomes pay more through IRMAA.
IRMAA: When Income Raises Your Premium
Medicare uses your income from two years prior to determine if you owe IRMAA surcharges. In 2026, surcharges begin above $109,000 MAGI (single) or $218,000 (married filing jointly), measured on 2024 income. The income brackets and total monthly Part B premium per person:
| Single Income | Married Income | Part B/mo | Annual / Person |
|---|---|---|---|
| ≤$109,000 | ≤$218,000 | $202.90 | $2,435 |
| $109K–$137K | $218K–$274K | $284.10 | $3,409 |
| $137K–$171K | $274K–$342K | $405.80 | $4,870 |
| $171K–$205K | $342K–$410K | $527.50 | $6,330 |
| $205K–$500K | $410K–$750K | $649.20 | $7,790 |
| $500K or more | $750K or more | $689.90 | $8,279 |
The top tier starts at exactly $500,000 (single) or $750,000 (joint); the tier below it runs up to just under those amounts. IRMAA also applies to Part D premiums, adding $14.50–$91.00/month depending on income tier. For a couple where both are in the first IRMAA tier ($284.10/month Part B each), they pay $6,818.40/year in Part B alone — vs. $4,869.60 for the same couple without IRMAA.
Medigap: Filling the Gaps in Original Medicare
Original Medicare pays 80% of approved costs after deductibles. The 20% coinsurance has no annual cap — a $200,000 medical event could leave you with $40,000 in bills. Medigap closes most of these gaps. The two most popular plans in 2026:
- Plan G: Covers everything except the Part B annual deductible ($283 in 2026). Monthly premiums range from $130 (age 65) to $250+ (age 75+) depending on insurer and state. Total annual cost at 65: approximately $1,800–$2,500/year in premiums + the $283 deductible = ~$2,100–$2,800/year for essentially unlimited coverage.
- Plan N: Similar to Plan G but you pay $20 copay for doctor visits and $50 for ER visits. Lower premium — roughly $100–$180/month. Better value if you have few doctor visits; similar to Plan G if you use it frequently.
Medigap premiums increase with age. A Plan G that costs $160/month at 65 may cost $240/month at 75 with the same insurer. Shopping plans annually (after the guaranteed issue period) can save money.
Part D: Drug Coverage
CMS projects the average stand-alone Part D plan premium at $34.50/month for 2026 (down from $38.31 in 2025), though individual plans vary widely. The standard Part D deductible is $615 in 2026, and out-of-pocket drug costs are capped at $2,100 for the year — the Inflation Reduction Act cap that started at $2,000 in 2025 and is now indexed. Higher-income beneficiaries pay IRMAA surcharges on Part D as well (adding $14.50–$91.00/month).
Total Annual Medicare Costs: Real Examples
| Scenario | Annual Premium Cost |
|---|---|
| Standard income, Medicare Advantage with drug coverage ($0–$30/mo premium) | $2,435–$2,800 |
| Standard income, Original Medicare + Medigap Plan N ($100–$180/mo) + Part D ($15–$60/mo) | $3,800–$5,300 |
| Standard income, Original Medicare + Medigap Plan G ($130–$250/mo) + Part D ($15–$60/mo) | $4,200–$6,200 |
| IRMAA second surcharge tier ($137,001–$171,000 single), Plan G + Part D | $7,100–$9,000 |
| IRMAA fifth surcharge tier ($205,001–$499,999 single), Plan G + Part D | $10,500–$12,500 |
Each row adds the 2026 Part B premium for that income tier ($2,434.80/year at standard income), any Part D IRMAA, and the Medigap and Part D premium ranges shown. Out-of-pocket costs add $1,000–$4,000/year on top of premiums for doctor visits, dental, vision, and prescriptions beyond the formulary. For a couple, multiply individual estimates by two.
To fund these Medicare costs tax-efficiently, your HSA balance can pay Part B, Part D and Medicare Advantage premiums tax-free after age 65 — though not Medigap premiums, which the IRS excludes. See using your HSA as a retirement account for the strategy. For a full Medicare primer, read what is Medicare.
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Frequently Asked Questions
How much does Medicare cost per month in 2026?
Standard Part B: $202.90/month in 2026. Medigap Plan G adds $130–$250+/month. Part D adds $15–$100/month (the 2026 average stand-alone plan is $34.50). Total for a standard-income person on Original Medicare + Plan G + Part D: approximately $350–$555/month in premiums. Medicare Advantage with a $0 premium and built-in drug coverage: just the standard $202.90 Part B premium.
What is IRMAA?
IRMAA adds to standard Part B and Part D premiums for incomes above $109,000 (single) or $218,000 (married filing jointly) in 2026. Based on income from 2 years prior. Ranges from +$81.20/month to +$487.00/month for Part B, plus $14.50–$91.00/month on Part D. Can be appealed if income dropped due to a qualifying life event like retirement.
How much does Medicare cost for a couple per year?
A couple both on standard-income Original Medicare + Medigap Plan N + Part D typically pays $7,600–$10,600/year combined in premiums in 2026. With Plan G: $8,300–$12,300/year. Higher-income couples with IRMAA surcharges can pay $20,000+/year in premiums alone.
How can I reduce my Medicare costs?
Strategies: (1) Keep 2-years-prior income below IRMAA thresholds — use Roth withdrawals (not counted as MAGI) in high-income years. (2) Appeal IRMAA if retired and income dropped (Form SSA-44). (3) Compare Medigap vs. Medicare Advantage based on your expected healthcare use. (4) Use HSA funds for Medicare premiums tax-free. (5) Shop Part D plans annually during open enrollment (Oct 15–Dec 7).
Can HSA funds pay for Medicare?
Mostly. After age 65, HSA withdrawals are tax-free for Medicare Part B, Part D and Medicare Advantage premiums (and Part A if you pay one), plus deductibles and copays. Medigap premiums are the exception — the IRS does not treat them as qualified medical expenses. HSA funds go in pre-tax and come out tax-free for these costs, which makes them one of the most efficient ways to fund Medicare.