Medicare Part B Premiums 2026: What You Will Pay and How to Pay Less

Every October, Medicare announces next year's Part B premiums. For 2026, the standard monthly premium rose to $185.00 — up from $174.70 in 2025. That's the number most people see in headlines. It sounds manageable — less than a cell phone bill and a streaming subscription combined.

But $185 per month is just the starting point. Depending on your income, you could pay anywhere from $185 to over $600 per person, per month. For a married couple, that's potentially $1,200 per month — $14,400 per year — just for Part B, before you see a doctor, fill a prescription, or pay a copay.

Gary and Diane discovered this the hard way. Both 66, they'd retired in 2025 after selling a rental property that generated a $180,000 capital gain. They expected the standard Part B premium. Instead, they opened their Medicare statement and found they each owed $504.90 per month. That one-time capital gain, reported on their 2024 tax return, triggered an income-related surcharge that would cost them an extra $7,677 for the year.

"Nobody told us the sale would affect our Medicare premiums two years later," Diane said. "We would have timed things differently."

Understanding how Part B premiums work — and what levers you have to reduce them — is one of the most actionable pieces of financial planning for anyone approaching or in retirement.

What Part B covers and why everyone needs it

Medicare Part B is the medical insurance component of Original Medicare. It covers doctor visits, outpatient care, preventive services (annual wellness visits, cancer screenings, flu shots, and more), durable medical equipment like wheelchairs and oxygen, mental health services, and ambulance services.

Part A (hospital insurance) is premium-free for most people. Part B is not. You pay a monthly premium for Part B, and if you don't enroll when you're first eligible, you'll face penalties that last the rest of your life.

Unlike employer insurance, Part B doesn't cover everything at 100%. After the annual deductible ($257 in 2026), Medicare pays 80% of approved charges. You pay 20% — with no annual out-of-pocket cap. That's why most retirees also carry supplemental coverage, either through a Medigap policy or a Medicare Advantage plan.

But the premium itself is the focus here, because it's the cost you'll pay every single month for the rest of your retirement — and it varies dramatically based on income.

The 2026 premium tiers: what you'll actually pay

Most Medicare beneficiaries pay the standard premium: $185.00 per month in 2026. But if your modified adjusted gross income (MAGI) exceeds certain thresholds, you'll pay an Income-Related Monthly Adjustment Amount — IRMAA — on top of the standard premium.

IRMAA is based on your tax return from two years prior. In 2026, Medicare uses your 2024 tax return. Here's the full breakdown:

Look at the jump from the first tier to the last: $185 to $629 per person, per month. For a married couple both on Medicare, the difference between the lowest and highest tiers is $10,656 per year — just in Part B premiums.

Gary and Diane's rental property sale pushed their 2024 MAGI to roughly $320,000 for the year — landing them in the fourth tier at $480.90 per person per month. That's $5,771 each for the year, compared to the $2,220 they would have paid at the standard rate. One transaction, one year, created a $7,102 premium increase.

What counts as income — and what doesn't

Understanding what feeds into your MAGI is critical for managing Part B premiums. Here's what counts:

Counts toward MAGI: Wages and self-employment income, taxable Social Security benefits, traditional IRA and 401(k) withdrawals, pension income, rental income, capital gains (including from home or investment sales), Roth IRA conversions (the conversion amount is taxable income in that year), interest and dividends, and tax-exempt municipal bond interest (yes, even tax-exempt interest is added back for IRMAA purposes).

Does not count toward MAGI: Roth IRA withdrawals (qualified distributions are not included in AGI), Health Savings Account withdrawals for medical expenses, return of basis from non-deductible IRA contributions, loans against life insurance or 401(k) plans, and reverse mortgage proceeds.

This distinction matters enormously. A retiree living off Roth IRA withdrawals can have substantial spending power while reporting minimal MAGI. A retiree with the same lifestyle funded by traditional IRA withdrawals will report higher income and potentially pay thousands more in Medicare premiums.

The late enrollment penalty: don't make this mistake

If you don't sign up for Part B during your Initial Enrollment Period — the seven-month window around your 65th birthday — and you don't qualify for a Special Enrollment Period (typically because you're still covered by an employer plan), you'll face a penalty.

The penalty is steep and permanent: your Part B premium increases by 10% for every 12-month period you could have had Part B but didn't. And you'll pay this penalty for as long as you have Part B — meaning the rest of your life.

If you delayed enrollment by three years, your premium would be 30% higher than the standard rate — permanently. On the 2026 standard premium, that's an extra $55.50 per month, or $666 per year, every year, forever.

The only common exception: if you're actively employed (or your spouse is) and covered by an employer group health plan, you can delay Part B without penalty. But the moment that coverage ends, the clock starts. You have eight months to enroll.

Five strategies to reduce your Part B premiums

The good news is that IRMAA isn't permanent. It resets every year based on your most recent applicable tax return. If your income drops — or if you plan it to drop — your premiums adjust accordingly.

Strategy 1: Manage your MAGI in the two years before Medicare starts. Since 2026 premiums are based on 2024 income, the planning window starts early. If you're turning 65 in 2026, the income you reported in 2024 is what matters. Ideally, you'd begin managing income three to four years before Medicare enrollment. That means timing large capital gains, limiting Roth conversions, and deferring income where possible during those critical years.

Strategy 2: Do your Roth conversions before Medicare age. This is one of the most effective long-term strategies. Roth conversions create taxable income in the year of conversion, which can trigger IRMAA. But once the money is in a Roth, future withdrawals don't count toward MAGI. Converting aggressively in your late 50s and early 60s — before Medicare premiums enter the picture — means lower MAGI (and lower premiums) for every year of retirement afterward.

Strategy 3: Use Qualified Charitable Distributions (QCDs). If you're 70½ or older and make charitable donations, a QCD sends money directly from your IRA to a charity. The distribution satisfies your Required Minimum Distribution but doesn't appear in your adjusted gross income. For a retiree near an IRMAA threshold, a $10,000 QCD could reduce MAGI enough to drop to a lower premium tier — saving $888 to $2,976 per year.

Strategy 4: Appeal with a life-changing event. If your income was unusually high in the look-back year due to a one-time event — you sold a business, lost a spouse, got divorced, retired and stopped working, or received a one-time pension payout — you can file Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event) with Social Security to request that they use a more recent year's income. Gary and Diane, unfortunately, didn't qualify because a property sale isn't on the list of qualifying life-changing events. But retirement itself is. If you retired in 2025 and your 2024 income included a full year of salary, you can ask Medicare to use your lower 2025 retirement income instead.

Strategy 5: Consider Medicare Advantage as an alternative. Medicare Advantage (Part C) plans replace Original Medicare and often include additional benefits like dental, vision, hearing, and fitness programs. Many have $0 premiums beyond the standard Part B premium. For retirees in lower IRMAA tiers who want to minimize total out-of-pocket costs, an Advantage plan can reduce monthly expenses — though the tradeoff is narrower provider networks and prior authorization requirements.

High-income planning: when premiums become a tax

For retirees with MAGI above $200,000 (single) or $400,000 (joint), Part B premiums function less like an insurance premium and more like an additional tax. At the highest tier, a couple pays $15,094 per year in Part B premiums alone — before Part D surcharges, Medigap premiums, or any actual medical costs.

At these income levels, the most powerful strategy is structural: shift as much retirement income as possible into Roth accounts before Medicare enrollment. Every dollar converted to Roth before age 65 is a dollar that won't inflate MAGI during retirement. Yes, you'll pay income tax on the conversion — but you'll avoid IRMAA surcharges, reduce future Social Security taxation, and gain tax-free income for life.

The math is compelling. A couple converting $100,000 per year from traditional to Roth between ages 58 and 64 will pay income tax on those conversions — roughly $22,000 per year at the 22% bracket. But they'll save $5,000 to $10,000 per year in IRMAA surcharges for potentially 20 to 30 years of retirement. The conversion pays for itself and then some.

This is why tax-bracket optimization in the years around retirement is so valuable. The decisions you make at 60 determine the premiums you pay at 70, 80, and beyond.

What Gary and Diane did next

After the sticker shock of their first premium notice, Gary and Diane worked with a financial advisor to restructure their retirement income plan. They couldn't undo the 2024 capital gain, but they could plan forward. They began a series of moderate Roth conversions — just enough to fill the 22% bracket each year without crossing the next IRMAA threshold. They set up QCDs for their charitable giving. They moved their remaining real estate holdings into a strategy that would spread gains over multiple tax years rather than triggering a single large event.

By 2028, their MAGI dropped below the first IRMAA threshold, and their combined Part B premiums fell from $11,542 to $4,440 per year — a savings of $7,102 annually. Over a 25-year retirement, that planning will save them well over $100,000 in premium costs alone.

"The premium table is right there on Medicare's website," Gary says. "It's not hidden. We just didn't know to look at it before we sold the property. That's the lesson — you have to plan your income two years ahead, every year, for the rest of your life."

He's not wrong. Medicare Part B premiums are one of the most predictable and controllable expenses in retirement. The income thresholds are public, the look-back period is known, and the strategies to manage your MAGI are well-established. The retirees who pay the least aren't the ones with the lowest income — they're the ones who plan their income most carefully.

Want to see exactly how your retirement income will affect your Medicare premiums? Talk to a financial advisor who can map your income sources to IRMAA tiers and build a withdrawal strategy that keeps your premiums as low as possible.