Anticipated Increase in Healthcare Expenses in 2026: Predicted Medicare Part B and Part D Contributions
Medicare Premiums Set for Significant Increases in 2026
Medicare beneficiaries in the UK are set to face a rise in their monthly premiums next year, with the Medicare Part B premium projected to increase by 11.6%. This will see the monthly cost rise from the current £185 to approximately £206.50.
The increase in the Part B premium is not just a one-off rise. The Part B deductible is also expected to increase, from £257 in 2025 to about £288 in 2026. This represents the largest dollar increase in the Part B premium since 2022.
For Medicare Part D, the base premium is projected to rise by about 6% to £38.99 in 2026. However, it's important to note that actual Part D premiums will vary by plan because they are offered by private insurers. The increase is moderated by the Inflation Reduction Act’s provisions that cap how much premiums for Part D plans can be raised.
The standard Part D deductible is projected to increase to £615 in 2026, up from £590 in 2025. On a positive note, the out-of-pocket drug cost cap will rise to £2,100, which means once beneficiaries hit this cap, they pay no further copays for covered prescriptions that year.
Factors Contributing to the Premium Increases
The rising healthcare costs overall impact Medicare spending, leading to the projected increases. The Part B increases reflect higher program expenses and are guided by the Social Security and Medicare Trustees report. The Part D premium increase is partially limited by the Inflation Reduction Act's premium stabilization provisions but is also influenced by insurer bids for prescription drug plans, which increased substantially.
What does this mean for beneficiaries?
The changes signal significant increases in healthcare costs for Medicare beneficiaries in 2026. Part B premiums are rising sharply, while Part D premiums are rising moderately but still increasing overall. It's important to note that Part D premiums vary according to the plan a beneficiary enrolls in.
During Medicare open enrolment, which runs from October 15 to December 7 annually, beneficiaries can switch from original Medicare to a Medicare Advantage plan, or vice versa. They can also choose a new Advantage plan or Medicare Part D prescription drug coverage during this period.
If the projected Social Security COLA rises between 2.6% and 2.7% in 2026, it would translate into an increase of £54.14 per month or £649.68 per year for the average Social Security check. In a scenario where the 2026 COLA raise is implemented, the Part B increase would effectively reduce the increase to the average Social Security check from £54.14 to £32.66, after subtracting the projected Part B increase (£21.50) from the projected COLA raise (£54.14).
In conclusion, while the increases may be challenging for some beneficiaries, it's crucial to take advantage of the open enrolment period to review and adjust plans to minimise the impact of these increases.
- The rise in Medicare Part B premiums, anticipated to be 11.6%, coupled with an increase in the deductible, may necessitate reevaluating one's personal-finance and health-and-wellness plans to prepare for the increased medical-conditions expenses.
- The projected increase in Medicare Part D premiums, moderated by the Inflation Reduction Act, and the variation in premiums based on the selected plan, emphasize the importance of understanding finance aspects when choosing a Medicare Part D prescription drug coverage during the open-enrolment period.
- A significant increase in Medicare premiums, along with the possible Social Security COLA raise in 2026, can affect one's personal-finance situation. It is essential to review and optimize plans, for instance, switching to a Medicare Advantage plan or adjusting Medicare Part D coverage, during the open-enrolment period to reduce the overall impact on one's health-and-wellness and finance.
