As you investigate how much money you'll need in retirement, don't forget to factor in medical expenses. It's easy to believe that seniors receiving Medicare pay little to nothing toward their healthcare in retirement, but nothing could be further from the truth. While out-of-pocket Medicare expenses may not seem like a big deal to someone who's still working, they can put the pinch on a person with a fixed income.
Times have been especially tough lately, and next year is shaping up to be a tough one for Medicare participants. Here are five facts you may not want to know about Medicare in 2026:
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1. Part A premiums and deductibles are on the rise
Medicare Part A covers inpatient hospital, skilled nursing facilities (with limitations), hospice care, inpatient rehabilitation, and some home healthcare services, and 99% of beneficiaries don't pay a Part A premium since they have at least 40 quarters of Medicare-covered employment.
However, specific uninsured individuals with fewer than 30 quarters of coverage and some with disabilities who have exhausted other entitlements will pay a full monthly premium of $565 (up $47 from 2025).
Here's how much more Medicare recipients will pay for hospitalization in 2026:
| Covered Service |
2025 |
2026 |
|---|---|---|
|
Inpatient hospital deductible |
$1,676 |
$1,736 |
|
Daily hospital coinsurance for the 61st to 90th day |
$419 |
$434 |
|
Daily hospital coinsurance for lifetime reserve days |
$838 |
$868 |
|
Daily coinsurance for a skilled nursing facility, days 21 to 100 |
$209.50 |
$217 |
Source: Centers for Medicare and Medicaid Services.
2. Medicare Part B premiums and deductibles are also increasing
Medicare Part B covers doctors' visits, outpatient hospital services, some home healthcare services, required durable medical equipment, and certain other medical and health services not covered by Medicare Part A. Here's how Part B prices are set to change and may impact your healthcare expenses in retirement:
- The standard monthly premium will be $202.90, up from $185 in 2025.
- The Part B deductible will be $283 in 2026, up from $257 in 2025.
Part B coinsurance -- the amount you must pay as a beneficiary for each Medicare-approved service before Medicare pays its portion -- is 20% of the cost of the service. For example, if a service costs $1,000, you are responsible for the first $200, and Medicare covers the remaining $800.
While 20% may sound like a pretty sweet deal (and it is, compared to many health policies), it's an expense you'll want to include in your retirement plans.
3. Not all services are covered
Aside from out-of-pocket expenses that are higher than expected, one thing that often surprises people about Medicare is how many services are not covered. For example, original Medicare doesn't cover benefits like dental, vision, hearing aids, or long-term care.
You'll need to pull funds from savings (or another source) to purchase separate coverage for those services. And if you want prescription drug coverage, you'll have to pay for a Part D plan or a Medicare Advantage plan that includes drug coverage.
4. Medicare is not accepted everywhere
You'll find that some healthcare providers don't accept Medicare patients, and hospital networks may be limited. This is particularly true if you live in a rural area. It's a good idea to learn who and what provides coverage in your corner of the world before you need services.
5. Your doctor could opt out
According to the health policy research group KFF, physician groups and policymakers have raised concerns that doctors would opt out of Medicare due to reductions in Medicare payments. On average, Medicare payments are lower than payments received from private insurers.
While the majority of doctors and medical facilities continue to accept Medicare, each is entitled to opt out. For example, about 1% of U.S. non-pediatric physicians opted out in 2024. That doesn't put a huge dent in the number of physicians participating, but it may be a good idea to have a plan in your back pocket just in case: another doctor you choose to visit if yours decides Medicare is not working out.
Most people are grateful to have Medicare coverage as they enter their later years, and no system is perfect. But understanding the not-quite-perfect portions of the program can help you budget and plan, ultimately making your retirement a little easier.
