Key takeaways
- Medicare costs are changing in 2026. Premiums, deductibles, and prescription drug limits may affect your monthly cash flow and annual retirement budget.
- Your income can influence what you pay. Higher-income Medicare beneficiaries may pay additional surcharges, making tax-aware retirement income planning especially important.
- Annual reviews matter. Medicare coverage, drug formularies, provider networks, and personal health needs can change from year to year.
If you have Medicare, here are five updates in 2026 that may affect your planning decisions:
Medicare Part B Premiums and Deductibles Are Higher
For many retirees, Medicare Part B is one of the most visible health care costs because the premium is often deducted directly from Social Security benefits. In 2026, the standard Part B monthly premium is $202.90, up from $185 in 2025. The annual Part B deductible is $283, up from $257. Part B generally covers doctor visits, outpatient care, durable medical equipment, and many preventive services.
While an increase of less than $20 per month may seem manageable in isolation, health care costs tend to be one of the more persistent expenses in retirement. When premiums, deductibles, prescriptions, dental care, vision care, and long-term care considerations are viewed together, Medicare becomes an important part of a broader retirement income plan.
Higher-income Retirees May Pay More Through IRMAA
Some Medicare beneficiaries pay an additional amount on top of their Part B and Part D premiums. This surcharge is known as the Income-Related Monthly Adjustment Amount, or IRMAA. For 2026, IRMAA is generally based on income reported on your 2024 tax return.
Beneficiaries with income above certain thresholds may pay additional monthly surcharges for both Part B and Part D coverage.
This is especially important for retirees whose taxable income may fluctuate from year to year. Required minimum distributions, Roth conversions, portfolio gains, business income, deferred compensation, or the sale of a property may increase modified adjusted gross income and potentially affect Medicare premiums two years later.
That does not mean these strategies should be avoided. Rather, it means Medicare costs should be considered alongside tax planning, investment income, charitable giving, and retirement withdrawal decisions.
Prescription Drug Costs Remain Important to Review
Medicare Part D continues to evolve. In 2026, the maximum Part D deductible is $615, and the annual out-of-pocket cap for covered Part D prescription drugs is $2,100, excluding premiums and costs for drugs not covered by the plan.
The out-of-pocket cap may help limit certain prescription drug costs for retirees with higher prescription expenses. However, the cap does not mean every drug will be covered the same way by every plan. Formularies, preferred pharmacies, tiers, prior authorization rules, and plan-specific costs can vary.
That makes it important to review your Part D plan each year, especially if your prescriptions have changed, your preferred pharmacy is no longer preferred, or your current plan has adjusted its formulary.
Medicare Advantage and Medigap Choices Deserve Fresh Look
Medicare beneficiaries generally choose between Original Medicare, often paired with a Medigap policy and a Part D prescription drug plan, or a Medicare Advantage plan offered by a private insurer. Each approach has trade-offs.
Original Medicare may offer broader provider flexibility, but it does not include an annual out-of-pocket maximum for Part A and Part B services. Many beneficiaries purchase Medigap coverage to help manage deductibles, copays, and coinsurance. Medicare Advantage plans, by contrast, often include provider networks, may bundle prescription drug coverage, and may offer additional benefits, but plan rules and networks can change.
In 2026, it remains important to look beyond the monthly premium. Consider your doctors, hospitals, prescriptions, travel patterns, chronic conditions, and comfort with network-based care before making a decision.
Annual Enrollment Is a Planning Opportunity—Not Just an Insurance Deadline
Medicare Open Enrollment generally runs from October 15 through December 7 each year. During this period, beneficiaries can review and make certain changes to Medicare Advantage and Part D prescription drug coverage for the following year.
Even if you are satisfied with your current coverage, reviewing your plan annually can help identify changes that may affect you. Your health needs may be different. A medication may move to a different tier. A provider may leave a network. A plan may change its premium, deductible, copays, or pharmacy arrangements.
A yearly Medicare review can also be an opportunity to revisit your broader retirement plan. Health care expenses can influence how much income you need, how you draw from taxable and tax-advantaged accounts, and how much flexibility you may want to maintain for unexpected costs.
What to discuss with your Financial Advisor
While Medicare plan selection should be reviewed with appropriate health insurance resources, your advisor can help you consider planning questions such as:
- How should health care costs be reflected in your retirement income needs?
- Could income-based Medicare surcharges affect your cash flow?
- How might Roth conversions, required minimum distributions, or charitable giving affect taxable income?
- Do you have sufficient liquidity for deductibles, premiums, and unexpected medical expenses?
- Are Medicare decisions coordinated with your Social Security, tax, estate, and long-term care planning?
If you need assistance reviewing Medicare plans, Janney has partnered with a Medicare resource that can help. Ask your Financial Advisor for more information.
Working With Janney
Depending on your financial needs and personal preferences, you may opt to engage in a brokerage relationship, an advisory relationship or a combination of both. Each time you open an account, we will make recommendations on which type of relationship is in your best interest based on the information you provide when you complete or update your client profile.
If you engage in a brokerage relationship, you will buy and sell securities on a transaction basis and pay a commission for these services. Our recommendations for the purchase and sale of securities will be based on what is in your best interest and reflect reasonably available alternatives at that time.
If you engage in an advisory relationship, you will pay an asset-based fee which encompasses, among other things, a defined investment strategy, ongoing monitoring, and performance reporting. Your Financial Advisor will serve in a fiduciary capacity for your advisory accounts.
For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.
By establishing a relationship with a Janney Financial Advisor, we can build a tailored financial plan and make recommendations about solutions that are aligned with your best interest and unique needs, goals, and preferences.
Contact us today to discuss how we can put a plan in place designed to help you reach your financial goals.
Neither Janney Montgomery Scott LLC nor its Financial Advisors give tax advice. Please consult with the appropriate professional for advice concerning your particular circumstances.
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