By Christian Dekker, CFP®

Medicare can look like a one-price program until you start filling out the forms. The premium you pay depends on things like your income, and the date you enroll can add a penalty that generally lasts as long as you have coverage. For families with significant savings, Medicare decisions are often closely tied to retirement and tax planning. 

Every fall, television commercials compete to promote the “best” Medicare plan, but what is “best” is not the same for everyone. Before choosing a plan, it’s a good idea to consider your specific timeline, including when your employer health coverage ends and the income you reported two years ago. 

What Does Medicare Cost in 2026 and 2027?

Each part of Medicare has its own price, based on 2026 figures from CMS and confirmed 2027 drug plan changes:

• Part A (hospital): Generally premium-free after 10 years of Medicare-taxed work by you or your spouse. The 2026 hospital deductible is $1,736 and can apply more than once a year.
• Part B (doctors and outpatient care): $202.90 per month in 2026, with a $283 deductible. The 2026 Medicare Trustees Report projects $209.50 for 2027, and CMS typically confirms the figure in November.
• Part D (prescriptions): Premiums vary by plan. In 2027, the yearly cap on what you pay for covered drugs rises from $2,100 to $2,400. Covered insulin stays capped at $35 per month.
• Medigap or Medicare Advantage: Many retirees add a Medicare Supplement (Medigap) policy or choose a Medicare Advantage plan instead. Pricing differs widely by plan and county.

Why Higher Earners Often Pay More

Medicare adds a surcharge, called IRMAA, to Part B and Part D premiums once income crosses certain limits. In 2026, it begins when modified adjusted gross income, a figure from your tax return, tops $109,000 for single filers or $218,000 for joint filers. At the highest tier, Part B reaches $689.90 per month, and married couples pay it per spouse.

The surcharge generally looks back two years, so 2027 premiums in most cases will be based off 2025 income. A final bonus, a stock option exercise, a Roth conversion, or a home sale near retirement can push income into a higher tier. 

When we review a household’s plan, we typically look at which tax years those events fall into as part of our tax planning process. If income drops after retirement, divorce, reduced work hours, or a spouse’s death, you may ask Social Security to use a more recent year with Form SSA-44.

When You Can Sign Up for Medicare

Your first opportunity is a seven-month Initial Enrollment Period that opens three months before the month you turn 65. Signing up early in that window generally lets coverage begin the month you turn 65. If you already collect Social Security, enrollment in Parts A and B typically happens automatically.

If You’re Working Past 65

If you have coverage through your job or your spouse’s job at an employer with 20 or more employees, you can generally delay Part B without a penalty. You then have eight months after the job or coverage ends to sign up. COBRA (continued coverage from a former employer) and retiree coverage don’t extend that window. 

Health savings accounts (HSAs) introduce another layer of complexity. You can’t contribute once Medicare begins, and Part A can be backdated up to six months when you enroll after 65, so many people stop HSA contributions six months before applying. 

Reviewing these rules alongside your executive benefits before your last day may help guard against a coverage gap.

If a Spouse Is Younger

Because each spouse qualifies for Medicare separately, a younger spouse may lose health coverage when the older spouse retires. Many couples budget for COBRA or an individual market plan to cover that gap. 

Open Enrollment for Current Enrollees

Once you’re enrolled, Open Enrollment runs October 15 through December 7 each year. During these windows, you can switch between Original Medicare and Medicare Advantage or change drug plans. 

With a temporary federal subsidy for standalone drug plans ending after 2026, comparing plans against the Annual Notice of Change your insurer sends each September may be especially helpful this year.

We Can Help

At Thrive Wealth Management, LLC, we work with families nearing retirement to strategize ways to fit Medicare timing into their retirement income plan, and we can coordinate with their CPAs on the tax side. Medicare.gov also offers a helpful sign-up timing tool. 

If you think we might be a good fit, contact us online, call (215) 376-5530 or email contactus@thrivewealth.com, and let’s find out.

Frequently Asked Questions

How much does Medicare cost per month in 2026?

The standard Part B premium is $202.90 per month in 2026, and Part A is generally premium-free after 10 years of Medicare-taxed work. 

If elected, you’d also pay a Part D plan premium, which varies by plan, plus a Medigap or Medicare Advantage premium. Higher earners pay an income-based surcharge under Original Medicare Parts B and D.

Can I delay Medicare if I’m working past 65?

Yes, in many cases, if you have group health coverage through your own or your spouse’s current employer with 20 or more employees, you can generally delay Part B without a penalty and enroll within eight months after the job or coverage ends. For these purposes, COBRA and retiree coverage don’t count as current employer coverage.

What happens if I miss my Medicare enrollment deadline?

You may face a premium penalty and a gap in coverage. The Part B penalty adds 10% for each full 12-month period you could have enrolled but didn’t, and it generally lasts as long as you have Part B. You may also need to wait for the General Enrollment Period, January 1 through March 31.

How is IRMAA calculated for Medicare premiums?

IRMAA is generally based on modified adjusted gross income from your tax return two years earlier. In 2026, surcharges begin above $109,000 for single filers and $218,000 for joint filers. At Thrive Wealth Management, our advisors can review the timing of Roth conversions and large stock sales in the years before Medicare with this lookback in mind.

About Christian

Christian Dekker, CFP®, is a Relationship Manager and fiduciary at Thrive Wealth Management, where he provides personalized, comprehensive planning to support clients in pursuing major milestones and remaining disciplined toward their long-term goals. Based in Philadelphia, Christian is an avid runner and Eagles fan who honors his grandfather’s team legacy while enjoying life with his girlfriend and three dogs.

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