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As Medicare enrollees look ahead to 2026, one thing is already clear: Healthcare isn’t getting any cheaper. And, while the 2026 cost-of-living adjustment for Social Security recipients will result in seniors receiving an extra $56 per month on average, this modest raise is about to feel a lot smaller for beneficiaries due, in large part, to those rising healthcare costs. That’s because Medicare Part B premiums are slated to increase to $202.90 per month next year, a nearly 10% increase that will consume almost one-third of that Social Security bump.
Next year’s increases don’t stop at premiums, either. The Medicare Part B deductible is slated to climb from $257 to $283 next year, while the Part A hospital deductible will hit $1,736, a $60 increase compared to this year’s costs. Coinsurance rates for extended hospital stays and skilled nursing facilities are also on the rise. And, all of this is happening while healthcare inflation continues to outpace the modest increases in fixed incomes.
These rising costs have more people asking whether Medicare supplemental insurance, commonly called Medigap, is worth the extra monthly expense. These policies are intended to help fill the gaps in Original Medicare coverage, but they come with their own price tags. So, with healthcare costs climbing, will the cost of Medicare supplemental coverage actually be worth it in 2026? Below, we’ll break down the pros and cons to consider now.
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Is Medicare supplemental insurance worth it as premiums rise?
Choosing Medigap comes with benefits and trade-offs. Here’s a breakdown of the key pros and cons to help clarify whether it aligns with your coverage needs.
Pro: It offers predictable, stable out-of-pocket costs
Unlike private insurance, Original Medicare doesn’t limit your annual out-of-pocket spending. That means a single extended hospital stay or serious health crisis could result in thousands of dollars in costs that Medicare doesn’t cover. With deductibles, coinsurance and copayments adding up quickly, one major medical event could devastate your savings.
Medigap, on the other hand, puts a ceiling on your financial exposure. Medigap plans K and L come with out-of-pocket maximums, and plans like Medigap Plan G and Plan N also cover the bulk of Medicare’s cost-sharing, which shields you from rising per-visit or per-procedure expenses.
Find out more about your Medigap options online now.
Con: It adds another monthly premium during a period of rising healthcare expenses
Medigap premiums have been rising in many states due to inflation, increased claims usage and demographic shifts. For beneficiaries already preparing for higher Part B and Part D premiums in 2026, adding a Medigap premium to the mix, which can range in cost from less than $100 per month to several hundred dollars per month, can further strain seniors’ fixed budgets. As a result, some retirees may find that layering these premiums on top of rising household costs simply isn’t feasible.
Pro: You can see any Medicare-accepting provider nationwide
Several large Medicare Advantage plans are expected to adjust networks and prior authorization rules again in 2026 in response to the higher upcoming costs. Medigap plans, by contrast, let beneficiaries see any doctor or specialist who accepts Medicare, and they do so with no referrals or preapprovals required. This type of unrestricted access is becoming even more valuable for older adults who travel frequently or spend part of the year in different states, in particular.
Con: It doesn’t include prescription, dental, vision or hearing coverage
Prescription drug prices and routine dental and vision visits have risen significantly in recent years. But Medigap doesn’t cover any of these categories, so beneficiaries must purchase standalone Part D coverage, and potentially separate dental or vision plans, adding more monthly premiums to the mix. That means for some retirees, Medicare Advantage’s bundled approach may deliver better value than Medicare supplemental coverage does, even if it means dealing with more restricted provider networks.
Pro: It may deliver better long-term value as health needs grow
While Medigap premiums require an upfront investment, many older adults who take this route end up saving money over time, especially considering that healthcare needs increase with age. And, with Medicare premiums projected to continue rising beyond 2026, locking in your Medigap coverage now may offer long-term financial stability, even if the initial cost feels high.
Con: Premiums vary widely and increase over time
Medigap premiums can vary by hundreds of dollars between insurance companies for identical coverage. You might find Plan G quotes ranging from $150 to $250 per month in the same ZIP code for the exact same benefits. And those premiums don’t stay fixed. They typically increase each year as you age. So, what seems affordable at 65 might strain your budget at 75 or 80, and switching plans later often requires medical underwriting that could result in higher rates or denial.
The bottom line
With Medicare premiums projected to rise in 2026, many older adults are taking a closer look at whether Medigap offers enough value to justify the cost. The benefits, which include nationwide access and strong protection from large medical bills, are significant, but they must be balanced against higher premiums and the need for additional standalone coverage. So, before making a decision, be sure to assess your likely medical use, travel habits and budget needs to determine whether Medigap provides the stability you want heading into 2026.
Matt Richardson
