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AUTHOR: R Quinn on 1/14/2026
For 2026 our Plan G Medigap premiums increased about 14% to $311.03 and $324.86. Our Part D premiums increased from $18.00 to $72.30 per month. And, the standard Part B premiums increased to $202.90.
These premiums total $1,186.29 per month for both of us, $14,235 a year. IRMAA may add several hundred dollars more per person, per month.
Even ignoring IRMAA, the basic premiums – unrelated to income – can be a hefty hit to income for retirees, especially for anyone living only on Social Security or even close to it. Of course Medigap premiums vary considerably, including by location and MA is an option, but then out of pocket costs can be a concern.
The median 65+ household income is about $55,000. So, basic premiums are around 25% of income and more for retiree couples below the 50th percentile.
Even the Affordable Care Act has some premium cost share limits.
Among large employers, coverage is considered affordable if the employee’s required contribution for the lowest-cost employee-only plan that meets minimum value does not exceed a specified percentage of the employee’s household income.
This percentage is indexed annually by the IRS and set at 9.96% for plan years beginning in 2026 (up from 9.02% in 2025 and the original statutory 9.5% baseline).
So, it seems retirees may not have the best deal when it comes to paying health insurance premiums – even with heavy taxpayer subsidies – 75% of Part B costs.
QUINNSCOMMENTARY 
Taxpayers pay 75% of Part B, and 75% of Part D (standard plan), and, while you were working those 50 or so years, you were paying 2.9% of your wages (Medicare rates started at 0.35% in 1966 and rose to 1.35% by 1985 before hitting 1.45% – with no cap after 1993, and a .9% surcharge on high earners after Health Reform) for Part A.
The 2026 Part A premium for those who did not pay in for 40 quarters is $565 or ANOTHER $6,780 a year.
So, while you paid $14,235 in premiums, the estimated cost of coverage was something closer to:
Part A: $6,780 * 2 = $13,560
Part B: $202.90 * 4 * 12 * 2 – $19,478
Part D: ($34.50 (standard plan premium) * 3 (75% of the cost of a standard plan * 12 * 2) + ($72.30 * 12 * 2) = $4,219
Medigap: ($311.03 + $324.86) * 12 = $7,631
So the total cost of your (very good) coverage is estimated to be $44,888 of which you paid (directly ($14,235) or indirectly ($13,560), $27,795 (ignoring the time value of money from paying FICA-Med throughout your working career).
How far off do you think I am? Given that Milliman estimated the 2025 cost of an “average” employer-sponsored plan (who knows what point of purchase cost sharing they used, likely a deductible in excess of $3,000) for a family of four to be $35,119, the above expense estimate of $45,000 for two individuals, with Medicare Supplement, age 65+ seems about right.
Even if you decide I am not all that accurate and instead use a 20% range, 10% high or 10% low, ($35,000 – $55,000), few Americans understand the actual cost of coverage for older Americans.
Am I far off? What do you think?
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