Medicare Part B premiums could rise to about $5,000 annually per beneficiary in 2035, according to a recent report from the Joint Economic Committee of the United States Congress.
The base annual Part B premium is $2,434 in 2026 ($202.90 per month). Some beneficiaries pay higher premiums because they have higher incomes, making them subject to the Medicare premium surtax also known as IRMAA or the income-related monthly adjustment amount.
Medicare premiums increase with estimates of the cost of the Medicare Part B program. Premiums are designed to pay 25% of the costs.
Each year the Centers for Medicare and Medicaid Services estimate the cost of covered medical care that will be received by beneficiaries the next year. The base Part B premium is set at a level that will amount to 25% of the estimate costs.
The surtax imposed on higher-income beneficiaries is set to have those beneficiaries pay a higher percentage of the estimated expenses, with the percentage rising as income increases.
General price inflation and medical services inflation are two reasons premiums increase.
Other factors are greater use of medical services as people age and the availability of new treatments and medications covered by the program.
Some analysts estimate that a large portion of the increase in medical spending is the result of treatments and medications that were not available in the past.
The report states that another portion of the premium increases will be caused by overpayments due to fraud and similar acts.
In 2025, about $212 of the average annual premium was to pay for fraud-related overpayments. The report estimates the overpayments for fraud and related acts will rise to $450 in 2035.
For individual beneficiaries, increases in Social Security benefits will not be enough to cover the higher Medicare premiums.
In most years, the Part B premium increases at a greater rate than Social Security benefits, because inflation for medical services is higher than general consumer inflation.
For 2026, Social Security benefits increased 2.8% while the base part B premium rose 9.7%.
The Part B premium does not increase at a faster rate than Social Security benefits each year. In some years, there are favorable factors that keep the Part B increase low.
In other years, political factors cause the CMS to limit the premium increase. Often, that causes a higher percentage increase in Part B premiums the following year.
Current estimates are that the Part B premium for 2027 will increase at a lower rate than it did from 2025 to 2026.
A solid retirement plan assumes that the cost of almost everything will increase in retirement and that some key expenses, such as premiums for Medicare and other medical insurance, will increase faster than the general inflation rate.
The plan also should assume some spending will decline during retirement, especially as a retiree becomes older and less active. For example, travel and recreation expenses might decline after age 75 or so.
A retirement plan needs flexibility so it can adjust for changes in costs and spending, such as increases in Part B premiums that exceed the general consumer inflation rate.
