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Anticipations for Medicare Part B premiums and deductibles are set to rise significantly next year.
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This sharp increase can be attributed to multiple factors, such as a rise in the usage of Part B services.
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There are strategies some retirees can employ to potentially reduce their Medicare Part B premiums.
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The $23,760 Social Security bonus most retirees completely overlook ›
Is it too early to think about the upcoming year? I don’t believe so. There are just 87 days left in 2025, and it will pass quickly.
As one year concludes and another begins, there is typically much enthusiasm and optimism. This will likely be true again as we near the end of 2025. However, retirees should prepare for a concerning Medicare shock in 2026.
Medicare Part B is designed to cover visits to doctors, outpatient services (including certain prescription medications), ambulance fees, and additional services. As of now, the standard monthly premium for Medicare Part B is set at $185, which reflects a rise of about 5.9% from last year’s premium of $174.70 in 2024. Nonetheless, retirees should prepare for a significantly higher cost next year.
A report released in July by Medicare trustees predicted that the premium for Medicare Part B will jump by 11.6% in 2026, reaching $206.50. This increase is nearly double the percentage jump seen in 2025.
This won’t represent the highest increase in Medicare Part B history. In 2022, premiums surged by 14.5%. This dramatic rise was partially due to the Centers for Medicare and Medicaid Services (CMS) expecting significantly increased costs linked to a new Alzheimer’s treatment, Aduhelm. However, those anticipated costs did not come to fruition, resulting in lower premiums the subsequent year.
The expected increase for Medicare Part B next year equates to $21.50, approaching the $21.60 rise in 2022. This significant hike will substantially affect the projected Social Security cost-of-living adjustment (COLA) of 2.7% expected for next year for those receiving benefits close to the average retirement payment.
Unfortunately, more negative news awaits. The Medicare Part B annual deductible is also anticipated to increase by 12%, reaching $288 in the upcoming year. While some retirees may not hit this higher deductible, a significant number will.
A primary factor behind the steep rise in Medicare Part B premiums is the sharp increase in the use of Part B services. A brief examination of stock trends for Medicare Advantage insurers illustrates this concern. While Medicare Advantage differs from Medicare Part B, the hurdles both programs are encountering are akin. Companies like UnitedHealth Group (NYSE: UNH) saw their stock values plummet earlier this year, largely due to the health insurance behemoth’s profits falling below expectations caused by increased service demand.
