Medicare Cost Increases Could Squeeze Seniors Already Displeased With Coverage

KEY TAKEAWAYS

• Many retirees who are already unhappy with Medicare costs should brace for higher bills next year.
• A federal subsidy that lowered stand-alone drug-plan premiums by an average of $16 a month is set to end this year.

Retirees who are already frustrated by Medicare expenses may need to prepare for more cost pressure next year.

In a recent survey by eHealth, an online health insurance marketplace, 42% of Medicare beneficiaries said they were dissatisfied with at least one part of their coverage. High premiums topped the list, followed by high out-of-pocket costs.

Many retirees are also facing bills they did not expect. About one-third of beneficiaries—Americans age 65 and older, along with younger people with disabilities—told eHealth their out-of-pocket spending is higher than they anticipated.

Why This Matters

Most retirees rely on fixed incomes, usually a combination of Social Security benefits and withdrawals from retirement savings. Social Security payments will rise 3.6% in 2027, but Medicare costs are increasing faster than the benefits they receive.

Rising Medicare Part B premiums have made the situation worse. In 2026, the standard premium increased by $17.90 to $202.90, marking the second-largest dollar increase in the program’s history. The 2027 premium has not been announced, though Medicare trustees project it at $209.50.

At one point, the Trump administration issued one-time $90 payments to about 20.8 million Original Medicare enrollees to help offset Part B premiums. People enrolled in Medicare Advantage, beneficiaries whose premiums are covered by Medicaid, and higher earners who pay income-related surcharges were not eligible.

Complaints about Medicare’s cost have climbed along with the bills. The 2026 survey from The Senior Citizens League, a nonpartisan advocacy group for older Americans, found that 41% of seniors were dissatisfied with what Medicare costs them, up 10 percentage points from the prior year.

Self-reported spending, however, has declined. In the 2025 survey, the median senior said they spent $401 to $600 a month on health expenses in the previous year; in this year’s survey, that figure fell to $201 to $400.

Still, the survey was conducted early in the year, and TSCL said the lower spending—and improved satisfaction—may reflect the reduced cap on out-of-pocket prescription drug costs. Medicare Part D got its first hard limit on such costs, set at $2,000 in 2025, increased to $2,100 in 2026, and scheduled to reach $2,400 in 2027.

Another factor may also be playing a role: In February, TSCL reported that 58% of seniors said they skipped care to save money, including dental, vision, and hearing services.

The Trump administration is ending a subsidy that had reduced stand-alone Part D premiums by an average of $16 a month. Broad premium jumps did not materialize: CMS projects the average stand-alone premium will rise by less than $1, to $36 a month. But no zero-premium stand-alone plans will be available in 2027, affecting about 4 million enrollees who paid nothing in 2026. Some plans, including UnitedHealth’s AARP-branded plans, could increase by $50 or more a month for people who do not switch.

In addition, the out-of-pocket cap for Part D is rising by $300 to $2,400, and the maximum deductible is increasing by $85 to $700. The 56% of Part D enrollees who receive drug coverage through Medicare Advantage are not affected by the subsidy’s end, and their average drug premium is projected to fall to $7.

Medicare Part D premiums are set to rise as the government phases out premium-stabilization subsidies. Beneficiaries will likely pay about $16 more each month, or nearly $200 more per year, for drug coverage.

“In general, any increase in out-of-pocket costs could lower satisfaction levels, regardless of what type of Medicare coverage a person has,” Whitney Stidom, vice president of consumer enablement at eHealth, said in an email.

She advised Medicare Advantage and Part D enrollees to review the annual notice of change letters they received and compare plans available in their area before open enrollment ends.