Medicare Part B Costs Explained: What You Will Actually Pay in 2026

Most people know that Medicare Part B has a monthly premium. What many do not realize is that the amount you pay can vary significantly based on your income. Some people pay the standard premium. Others pay two, three, or even four times that amount because of an income-based surcharge most people have never heard of until they see it on their first bill.

Understanding how Part B costs work, especially the IRMAA adjustment, can help you plan ahead and potentially reduce what you owe.

The standard Part B premium

In 2026, the standard monthly premium for Medicare Part B is deducted from your Social Security check. This is the base amount that most Medicare beneficiaries pay. However, "most" does not mean "all." If your income exceeds certain thresholds, you will pay more.

In addition to the monthly premium, Part B has an annual deductible. Once you have met the deductible, Medicare typically covers 80% of approved services, and you are responsible for the remaining 20% (unless you have supplemental coverage that picks up this cost).

What is IRMAA?

IRMAA stands for Income-Related Monthly Adjustment Amount. It is an additional charge added to your Part B (and Part D) premiums if your income is above a certain level. Think of it as a surcharge for higher-income beneficiaries.

Here is what makes IRMAA confusing for most people: it is based on your tax return from two years ago. In 2026, Medicare looks at your 2024 modified adjusted gross income (MAGI) to determine whether you owe an IRMAA surcharge. This is called the two-year lookback rule.

The 2-year lookback: why it matters

The two-year lookback catches people in several common situations:

• You sold a home in 2024. The capital gain from the sale may have pushed your income above an IRMAA threshold, resulting in higher premiums starting in 2026.
• You took a large retirement account distribution in 2024. Whether it was a required minimum distribution or an early withdrawal, that income counts toward your MAGI.
• You converted a traditional IRA to a Roth IRA in 2024. The conversion amount is taxable income and can trigger IRMAA.
• You had a one-time income event. Severance packages, stock option exercises, or business sale proceeds can all create an income spike that triggers IRMAA.

The frustrating part is that many of these are one-time events. You may have retired in 2025 and now earn far less than you did in 2024, but your 2026 premiums are still based on that higher 2024 income.

How to appeal IRMAA with a life-changing event

The good news is that Social Security allows you to request a new initial determination if you have experienced a qualifying life-changing event. These events include:

• Marriage, divorce, or annulment
• Death of a spouse
• Work stoppage or reduction
• Loss of income-producing property
• Loss of or reduction in pension income

To request the adjustment, you file Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount, Life-Changing Event) with your local Social Security office. You will need to provide documentation of the event and your current or expected income.

Many people do not know they can appeal IRMAA. If you recently retired or experienced a significant income change, this one form could save you hundreds or even thousands of dollars per year in Medicare premiums.

Part B costs beyond the premium

Beyond the monthly premium, Part B costs include:

• Annual deductible: A set amount you pay out of pocket before Medicare starts covering its share.
• 20% coinsurance: After the deductible, you typically pay 20% of the Medicare-approved amount for services. There is no cap on this 20% under Original Medicare, which is one reason many people choose a Medigap plan for cost predictability.
• Excess charges: Some doctors who accept Medicare do not accept assignment, meaning they can charge up to 15% above the Medicare-approved amount. Medigap Plan G covers excess charges; most other plans and Medicare Advantage plans do not.

Planning ahead for Part B costs

If you are approaching 65 and have not yet enrolled in Medicare, here is what I recommend:

1. Review your tax return from two years ago to estimate whether you will owe IRMAA.
2. If you are retiring soon, plan the timing of large income events (like Roth conversions or property sales) to minimize their IRMAA impact.
3. If you have already experienced a life-changing event, talk to a dedicated agent about filing Form SSA-44.
4. Consider whether a Medigap plan makes sense for your situation, especially if the 20% coinsurance on Part B services concerns you.

Medicare costs do not have to be a surprise. With the right information and a little planning, you can anticipate your costs and make decisions that keep more money in your pocket.