Before Medicare Enrollment Opens This Month, a 65-Year-Old Should Price These 3 Costs
Three costs will shape every Medicare bill a new enrollee receives in 2026, and most 65-year-olds budget for only one of them before open enrollment closes.
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All figures below come from the CMS fact sheet 2026 Medicare Parts A & B Premiums and Deductibles, released Nov. 14, 2025, and apply to calendar year 2026. They stay in force until CMS publishes the 2027 figures.
If you’re 65 and your Part B coverage starts this fall, your choices lock in during Medicare Open Enrollment, which runs Oct. 15 to Dec. 7. Before insurers fill your mailbox with offers, put a dollar figure on these three costs.
Cost 1: A Premium Set by Your 2025 Tax Return
CMS set the standard Part B premium at $202.90 a month for 2026, up from $185 in 2025. Income surcharges affect only about 8% of Part B enrollees. If your modified adjusted gross income (MAGI) is at or below $109,000 as a single filer or $218,000 filing jointly, the standard premium is what you owe.
Above those lines, Social Security uses your most recent tax return. For 2027 premiums, that means your 2025 tax return. MAGI is your adjusted gross income plus tax-exempt interest, so municipal bond income counts.
| Single MAGI | Joint MAGI | Part B total monthly premium (per person) | Part D surcharge (per person, each month) |
|---|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 | $0.00 |
| Up to $137,000 | Up to $274,000 | $284.10 | $14.50 |
| Up to $171,000 | Up to $342,000 | $405.80 | $37.50 |
| Up to $205,000 | Up to $410,000 | $527.50 | $60.40 |
| Under $500,000 | Under $750,000 | $649.20 | $83.30 |
| $500,000 or more | $750,000 or more | $689.90 | $91.00 |
Each tier is a drop. A couple with MAGI of $274,000 pays $284.10 each. One more dollar of income moves both spouses to $405.80.
New retirees take the hardest hit because the lookback year usually includes a full salary. Retiring counts as a “work stoppage” on Form SSA-44, which lets Social Security use your lower current income instead. A Roth conversion or home sale never qualifies.
Cost 2: Deductibles That Reset More Often Than You Expect
The Part B deductible is $283 in 2026, up from $257 in 2025. It applies to doctor visits, outpatient hospital care, and durable medical equipment. After you meet it, Original Medicare still bills you a share of every claim with no annual ceiling.
Part A deductibles reset by benefit period, which can happen more than once a year. The inpatient deductible is $1,736 and covers the first 60 days of a stay. Days 61 through 90 cost $434 per day. Two hospital stays in one year can mean two deductibles.
Cost 3: Drug Coverage Priced One Prescription at a Time
CMS notes that Part D premiums vary by plan. High earners also owe the surcharge in the table, and Social Security takes it out of their benefit checks (IRMAA is one of several surcharges we listed, here). Federal law now caps yearly out-of-pocket spending on covered drugs, but the cap only protects drugs on your plan’s formulary. A cheap plan that leaves off your medicine costs more than a costlier plan that covers it. Early reporting suggests Part D premiums will stay stable next year.
Medigap or Medicare Advantage: Your Window to Switch Closes Fast
Original Medicare with a Medigap policy and a separate Part D plan lets you see any provider who accepts Medicare. Medicare Advantage bundles everything, often for a lower premium, and CMS projects Advantage premiums will drop in 2027. In exchange, Advantage plans limit you to a network and require prior authorization. Their out-of-pocket cap covers only in-network medical care, so out-of-network bills and drug costs don’t count toward it.
Your federal Medigap Open Enrollment lasts six months, starting the first month you have Part B and are 65 or older. During that window, insurers must sell you a policy regardless of health. Once it closes, insurers in most states can review your medical history and raise rates or deny coverage. One federal exception applies to people who join Advantage when first eligible: they can switch back within 12 months. A few states, including New York and Connecticut, offer broader rights.
If you’re 65 with a chronic condition or a specialist you want to keep, buy Medigap inside that window. Part of what the premium pays for is the freedom to keep your doctors later.
3 Things to Look Up Before Oct. 15
- Your 2025 Form 1040: Add line 11 (AGI) and line 2a (interest exempt from tax). If above the first threshold and you’ve stopped working, file SSA-44 with your retirement letter.
- Your prescription list: Enter every drug, dose, and pharmacy into Medicare Plan Finder to price each plan against your actual medicine.
- Your doctors’ networks: Ask each billing office if they accept Original Medicare assignment, and which Advantage plans will be in-network with for 2027.
Of the three, the premium surprises people most. New retirees budget for $202.90, then get a letter billing $284.10 or more, based on a salary they no longer make. Form SSA-44 can fix it, but only if you file it.
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Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
