Medicare Part B in 2026: Coverage, Costs, IRMAA, and What Most People Miss

Medicare Part B is straightforward for most people — until you factor in IRMAA surcharges, the 20% coinsurance with no out-of-pocket ceiling, and permanent late enrollment penalties. Here's the complete picture for retirees with meaningful income.

What Medicare Part B covers

Part B is Medicare's outpatient insurance — the half of Original Medicare that covers you outside of a hospital inpatient stay. (Part A covers inpatient hospitalization, skilled nursing facility care, and hospice.)

Medically necessary services Part B covers:

• Doctor visits (primary care and specialists who accept Medicare)
• Outpatient hospital services and same-day surgery
• Diagnostic tests: lab work, X-rays, MRIs, CT scans, EKGs
• Ambulance transportation when medically necessary
• Durable medical equipment (DME): wheelchairs, walkers, CPAP machines, blood glucose monitors
• Mental health services: outpatient therapy, psychiatry visits (same 20% coinsurance as medical)
• Outpatient physical therapy, occupational therapy, and speech-language pathology
• Chemo and radiation for cancer treatment (when administered outpatient)
• Dialysis for kidney failure
• Certain home health services (when preceded by a qualifying hospital or SNF stay)
• Second surgical opinions

Preventive services covered at 100% (no deductible, no coinsurance when you see a Medicare-participating provider):

• Annual Wellness Visit (AWV) — distinct from a routine physical; focuses on functional assessment and care planning
• "Welcome to Medicare" preventive visit (one-time, within first 12 months of Part B enrollment)
• Flu, COVID-19, and pneumococcal vaccines
• Mammograms, colonoscopies, Pap tests, PSA tests, bone density scans
• Cardiovascular disease screening, diabetes screening
• Depression screening, alcohol misuse screening, HIV screening
• Advance care planning discussions (when you initiate)

2026 Medicare Part B costs

Standard premium: $202.90/month

The standard Medicare Part B premium for 2026 is $202.90 per month, up from $185.00 in 2025.¹ This applies to most enrollees — roughly 70% of Medicare beneficiaries pay the standard rate. The remainder pay a lower "hold harmless" amount (if their Social Security COLA doesn't cover the increase) or higher IRMAA-adjusted amounts based on income.

If you receive Social Security benefits, your Part B premium is automatically deducted from your monthly check. If you don't receive SS yet (because you've delayed claiming), Medicare bills you quarterly.

Annual deductible: $283

The 2026 Part B annual deductible is $283, up from $257 in 2025.¹ You pay the first $283 of covered Part B services each calendar year, then 20% coinsurance applies.

Most preventive services are exempt from the deductible entirely — you pay nothing for them regardless of whether you've met your $283 deductible for the year.

20% coinsurance — with no out-of-pocket cap

After meeting the $283 deductible, you pay 20% of Medicare's approved amount for every covered service for the rest of the year. There is no annual out-of-pocket maximum in Original Medicare.

This is the most underappreciated feature of Original Medicare. A $200,000 cancer treatment course under Part B means $40,000 in coinsurance with no ceiling. A year of outpatient chemotherapy, dialysis, or complex cardiovascular procedures can generate coinsurance that dwarfs the annual premium.

This is precisely why most enrollees in Original Medicare add a Medigap supplement — Plan G or Plan N — to cap their coinsurance exposure. Medicare Advantage plans include their own OOP maximums (federally capped at $9,350 in-network for 2026) but trade network freedom for cost certainty. See our full Medicare Advantage vs. Medigap comparison for the tradeoff analysis.

2026 Part B IRMAA surcharges by income

If your 2024 MAGI (adjusted gross income plus tax-exempt interest) exceeded $109,000 single or $218,000 married filing jointly, Medicare adds an Income-Related Monthly Adjustment Amount (IRMAA) to your Part B premium. The surcharge is billed separately by Social Security — it's not included in your plan premium, and many people discover it only when their first Medicare bill arrives.

Both spouses pay the surcharge independently, on the same joint MAGI. A married couple with $320,000 MAGI is each paying Tier 2 Part B premiums — $406.10/month each, or $812.20/month total, before any medical costs.

The two-year look-back: Your 2026 surcharge is based on your 2024 tax return — specifically your MAGI (AGI plus tax-exempt municipal bond interest). Social Security uses the IRS data it receives, which typically reflects the 2024 return filed in 2025. If SSA doesn't have your 2024 data yet, it uses the most recent year available.

This creates a common trap for people who retire mid-year: your final working-year income (2024) is high, so 2026 premiums reflect that high MAGI — even if your retirement income in 2026 is much lower. If this applies to you, an IRMAA appeal using Form SSA-44 lets you substitute current-year income when a qualifying life event (like retirement) caused the reduction.

Use our IRMAA bracket calculator to see exactly which tier your MAGI lands in and your projected 2026 Part B and Part D costs combined.

What counts as MAGI for IRMAA

Several income sources surprise people because they're added back to AGI:

• Tax-exempt municipal bond interest — fully counts toward IRMAA MAGI even though it's not taxable income
• Roth IRA conversions — the converted amount is ordinary income and counts fully
• Capital gains — including long-term gains taxed at 0% still count as MAGI
• Required minimum distributions (RMDs) — count as ordinary income; growing balances can push you up tiers over time
• Social Security benefits — up to 85% of your SS benefit counts toward MAGI if combined income exceeds thresholds

See the full breakdown in our IRMAA MAGI explainer with interactive income calculator.

Part B late enrollment penalty

If you don't enroll in Part B when first eligible and don't have a valid exception, Medicare imposes a permanent late enrollment penalty of 10% per 12-month period you delayed.² Unlike Part D's penalty (which uses a base amount), the Part B penalty is applied to the standard premium and compounds permanently.

When you can delay Part B without penalty

You can defer Part B enrollment penalty-free if you are covered by an employer group health plan (GHP) based on your own or your spouse's active employment. Key conditions:

• The employer must have 20 or more employees (for your own coverage) or 100+ employees (for a spouse's plan covering you, under EGHP rules)
• The coverage must be active employment — not COBRA or retiree coverage
• When that employer coverage ends, you have an 8-month Special Enrollment Period to enroll in Part B without penalty

COBRA and retiree group coverage do not qualify for the penalty exception. If you retire and take COBRA at 65, you must still enroll in Medicare Part B within your Initial Enrollment Period or face the permanent penalty. See our full guide on Medicare at 65 while still working for the employer-size rules and SEP timing details.

Assignment and Part B excess charges

Medicare Part B works on an "assignment" system. Doctors who accept assignment agree to accept Medicare's approved amount as payment in full. Doctors who don't accept assignment can charge up to 15% above Medicare's approved amount — called an "excess charge" — and you pay the difference.

Most providers accept assignment. But specialist practices, concierge medicine practices, and some surgical groups may not. If you see a non-participating provider, you may owe the 20% coinsurance plus the 15% excess charge — up to 35% of the approved amount out of pocket.

A very small number of doctors "opt out" of Medicare entirely. They can charge any amount and Medicare pays nothing. Ask your doctor's billing office before scheduling whether they participate in Medicare and whether they accept assignment.

How Medigap handles excess charges: Medigap Plan G covers Part B excess charges (the 15% above Medicare's approved amount). Plan N does not — a meaningful distinction if you see specialists or live in a market with many non-participating providers.

Enrollment windows

Initial Enrollment Period (IEP)

A 7-month window: the 3 months before your 65th birthday month, your birthday month, and 3 months after. Enrolling during the first 3 months of your IEP means Part B starts the first of your birthday month. Enrolling during or after your birthday month delays the start date by 1-3 months.

Special Enrollment Period (SEP)

Available if you're covered by an employer GHP based on active employment. You have an 8-month window starting when either the employment ends or the coverage ends, whichever comes first. Waiting until the last month of your SEP risks a coverage gap — enroll early in the window.

General Enrollment Period (GEP)

January 1 through March 31 each year, with coverage starting July 1. The fallback if you missed your IEP and don't qualify for an SEP — but you'll pay the late enrollment penalty, and coverage doesn't start until July 1.

See our detailed Medicare enrollment timeline with IEP date calculator for your specific situation.

Part B and HSA contributions

Enrolling in Medicare Part B disqualifies you from contributing to a Health Savings Account. If you're still working past 65 with an HSA-eligible HDHP through your employer, you must defer Part B enrollment (and all of Medicare) until you leave that coverage. Critically, Medicare Part A — which many people enroll in at 65 even while working — can be backdated up to 6 months, which can retroactively disqualify past HSA contributions. See the Medicare and HSA guide for the full interaction.

When to involve a Medicare-specialist advisor

For most people, Part B is straightforward. For retirees with meaningful income, it becomes a planning variable:

• IRMAA bracket management: Roth conversions, capital gain timing, and QCDs all affect MAGI and can move you between Part B tiers — potentially saving or costing $1,000–$5,800/year per person. See IRMAA reduction strategies.
• Two-year look-back planning: Pre-retirement income in 2024 determines 2026 Part B premiums. Income management in 2025 determines 2027 premiums. The optimal Roth conversion strategy requires modeling forward two years.
• RMD growth: As IRA balances grow, required minimum distributions increase MAGI year over year, potentially pushing you into higher IRMAA tiers well into your 80s. RMD and IRMAA projection calculator.
• First-year retirement IRMAA spike: Your final working year produces high MAGI that hits your first two years of Medicare premiums. The SSA-44 appeal can substitute projected retirement income if you have a qualifying event.

1. CMS, "2026 Medicare Parts A & B Premiums and Deductibles," cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles — 2026 Part B standard premium $202.90/month, annual deductible $283. Published November 2025.
2. Medicare.gov, "Avoid late enrollment penalties" — Part B late enrollment penalty: 10% of standard premium per 12-month period delayed, permanent surcharge. cms.gov/medicare/enrollment/late-enrollment-penalties.
3. CMS, "2026 IRMAA Part B premium tiers," confirmed via Kiplinger and IRMAA Group — 2026 Part B premiums: $202.90 / $284.10 / $406.10 / $527.90 / $609.50 / $689.90 per month based on 2024 MAGI. Thresholds: $109K / $137K / $171K / $205K / $500K (single); $218K / $274K / $342K / $410K / $750K (married).
4. Medicare.gov, "What Part B covers" — outpatient services, preventive services at 100%, Annual Wellness Visit, durable medical equipment, mental health, chemo, dialysis, and home health criteria.

Values verified against CMS and Medicare.gov as of May 2026.