If you’ve been on Medicare for any length of time, you know that Part B premiums have risen dramatically in recent years. Between 2016 and 2026, standard premiums for coverage under Part B rose about 66 percent, and that trend line shows no signs of slowing down.
Quite the opposite is true, in fact, according to this recent article from Kiplinger. Financial reporter Donna LeValley tells us that Medicare beneficiaries will face higher Part B premiums, deductibles and surcharges starting in 2027 and continuing over the next decade.
LeValley’s article contains far more specific details than we have space for here, so we’ve done our best to summarize the high points. The bottom line is crystal clear, however: as retirees (and those soon to retire) budget for future living costs, they’ll need to build some pretty aggressive Medicare cost hikes into their financial plans.
Like Social Security, Medicare Faces Major Fiscal Problems
“Similar to Social Security,” LeValley begins, “Medicare is facing funding issues.”
She quotes another of her Kiplinger reports, this one published last month, warning that the Hospital Insurance fund for Medicare Part A will not have enough money to fully pay scheduled benefits starting in the second quarter of 2033. That’s one quarter sooner than last year’s projection, she notes.
“However,” LeValley goes on, “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 2027 and continuing over the next decade.”
Beneficiaries at All Income Levels Will See a Steady Increase in Premiums
According to LeValley’s Kiplinger article, the 2026 Medicare Trustees Report shows premiums for Medicare Part B and Part D rising steadily over the coming nine years. Those in higher income households facing IRMAA surcharges (income-related monthly adjustment amount) will see those extra costs rise dramatically during the same time period.
“The projections are based on expected rises in healthcare costs, particularly for outpatient hospital services and physician-administered drugs,” LeValley explains. “It’s crucial for retirees and those approaching retirement to understand these projections for proper financial planning.”
She does note that the current increases are projections which, as always, are subject to change. The Centers for Medicare and Medicaid Services (CMS) is planning to release the official numbers this fall. Still, unless Congress acts, it’s hard to see how seniors will be able to dodge the bullet of steadily rising Part B premiums.
Soaring Part B Premiums in Coming Decade: Some Specifics
As we noted above, LeValley’s Kiplinger article includes detailed tables of projected premiums and deductibles which we lack the space to include here. But despite the details, the trajectory is clear: Part B premiums will rise dramatically.
According to LeValley’s article, Part B premiums, currently at about $203 per month, will rise by an eye-popping 77 percent by 2035, costing the average beneficiary over $360 per month by then. Part B deductibles will rise by the same percentage, from $283 today to $503 in 2035.
Part D premiums are projected to rise more slowly for now, Kiplinger notes, but retirees can expect big jumps in prescription coverage premiums starting in 2030. In the coming nine years, the Part D base premium – the figure Social Security uses to calculate penalties for late enrollment and IRMAA-related surcharges – will double, from $39 per month today to $78 (projected) in 2035.
Higher-Income Households Will See Larger IRMAA Surcharges
For beneficiaries with higher incomes, IRMAA is an acronym they would rather not hear. As noted, it stands for income-related monthly adjustment amount – a monthly surcharge added to the standard Part B and Part D premiums.
As LeValley explains, “The SSA uses the most recent complete federal tax return data that the IRS provides to assess your liability for the IRMAA, generally, two years prior. For 2027, the SSA will look at your 2025 tax return to calculate the surcharge you owe, if any.”
(We wrote about IRMAA here on the Blog early last year. The figures may reflect 2025 costs but the general information is still relevant.)
Here, too, expect higher premiums. IRMAA surcharges, which affect high-income beneficiaries, are expected to grow significantly over the next nine years, LeValley warns.
IRMAA Surcharges are Based on Modified Adjusted Gross Income
Again, LeValley’s Kiplinger article includes a detailed table of IRMAA surcharges which we can’t include here. Instead, we took a look at current rules to see when IRMAA kicks in and – generally speaking – how much affected beneficiaries will pay in increased premiums.
In 2026, extra IRMAA-related costs are applied when a single tax filer had modified adjusted gross income (MAGI) of more than $109,000 in 2024. For couples filing jointly, the threshold is $218,000 in MAGI. These so-called Tier 1 beneficiaries will pay an extra $95.70 per person per month in combined Part B and Part D surcharges in 2026.
But remember that IRMAA’s pain increases with income, through Tiers 2 through 5. For those in the top tier, with 2024 MAGI exceeding $500,000 for a single or $750,000 for a couple, IRMAA surcharges will add $578 to combined Part B and Part D premiums per enrollee this year.
Now, fast forward to 2035: for Tier 1 beneficiaries, the IRMAA Part B/Part D surcharge will more than double, to about $202 (projected). Tier 5 enrollees are expected to be hit with a combined IRMAA surcharge of nearly $840!
Preparing for Uncertainty with a Financial Dashboard
Our takeaway from the Kiplinger article was that rising costs will be a fact of life in retirement, necessitating a careful and proactive approach to budgeting and spending. One of the chief planning tools Rajiv Nagaich recommends is a financial dashboard.
“Change is a fact of life,” Rajiv notes, “especially when it comes to paying for retirement. There are so many things we can’t predict: inflation, tax hikes, health setbacks, family members who need our help – the list of variables is endless!”
Rajiv continues, “So, years ago we saw the need for a tool that allows people to monitor their financial health just like gauges on your dashboard. That’s just what a financial dashboard is. You can run all sorts of ‘what-if’ scenarios to see what the effect would be tomorrow of the financial decisions we make today. Then you can make a confident and well-informed decision.”
He adds, “In the example of Medicare premiums from this article, we can plug in various numbers so you can see in advance when you need to make adjustments and what those should be. A financial dashboard is absolutely indispensable in times of financial uncertainty like we’re experiencing today.”
Intrigued? Contact us and we’ll gladly answer any questions you may have.
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