Key Points
Medicare provides critical insurance coverage for retirees, but many are surprised when they find out some of the details of the program. That’s because there are many misunderstandings about how much Medicare costs and what it covers.
To make sure they aren’t caught off guard with an unpleasant financial surprise, there’s a key question retirees will want answered every year when it comes to Medicare coverage. Here’s what it is.
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This Medicare question has a big impact on a retiree’s finances
The key question seniors need to ask each year is just how much Medicare premiums are slated to increase. New retirees sometimes don’t realize they have to pay for Medicare, since it’s government-sponsored insurance. But you do owe premiums — which total $202.90 in 2026 for most retirees, up from $185.00 last year.
These premiums cover only traditional Medicare Part B. If you want a Medigap plan to fill any coverage gaps or co-pays you might otherwise be responsible for, you would have to buy a Medigap policy separately. Or you could look into a Medicare Advantage plan, which works a little differently in terms of coverage and how you get care.
Unfortunately, Medicare premiums don’t stay the same each year. They increase due to added healthcare costs, and sometimes rapidly. Seniors need to plan and prepare for these rising costs, especially if they were not aware they would have to pay for Medicare and any supplementary coverage out of pocket.
This is the key Medicare question to ask
Since premiums do increase in most years, the key question seniors need to ask annually is just how much the costs are going up. Typically, the Centers for Medicare and Medicaid Services (CMS) announces the premium changes in mid-November. That’s shortly before the end of the Medicare open enrollment period.
Finding out how much premiums will rise each year will help you determine how much of your Social Security cost-of-living adjustment (COLA) you get to keep. Most people have premiums deducted directly from their Social Security benefits, so they don’t see the full amount of their COLA in their checks.
The good news is that hold-harmless provisions prevent many retirees from seeing their benefits decline if Medicare premiums rise by more than the annual COLA retirees receive. Of course, once a bigger raise happens, their premiums will see a big jump as they catch back up.
Asking how much Medicare premiums will rise is something you should do annually, so you’ll know how much take-home pay you’ll have from each Social Security benefit. This can make retirement planning a whole lot easier.
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