For Dripping Springs retirees and pre-retirees, Medicare is one of the most important recurring expenses to include in a retirement budget. In 2026, the standard Medicare Part B premium increased by 9.7%: from $185.00 to $202.90 per month.
That is an increase of $17.90 per month, or $214.80 per year for one person. For a married couple where both spouses pay the standard premium, the increase is approximately $429.60 per year before considering other Medicare-related costs.
The change may not seem overwhelming on its own. But when combined with prescription coverage, supplemental insurance, home maintenance, utilities, travel, and the everyday cost of enjoying the Texas Hill Country, small increases can add up quickly.
Here is what Dripping Springs retirees should know about the 2026 Medicare Part B increase: and several practical ways to account for it.
What Changed in Medicare Part B for 2026?
According to the Centers for Medicare & Medicaid Services (CMS), the standard monthly Part B premium is now $202.90, compared with $185.00 in 2025.
The annual Part B deductible also increased:
- 2025 deductible: $257
- 2026 deductible: $283
- Increase: $26
Medicare Part B generally helps cover physician services, outpatient care, certain home health services, durable medical equipment, and other medically necessary services. After meeting the deductible, Original Medicare generally pays 80% of the Medicare-approved amount for covered services, while the beneficiary is responsible for the remaining portion unless another form of coverage helps pay it.
The standard premium and deductible do not represent every healthcare expense in retirement. Prescription drug coverage, Medigap or Medicare Advantage premiums, dental and vision care, and out-of-pocket expenses may be separate.
CMS explained that the increase is “mainly due to projected price changes and assumed utilization increases that are consistent with historical experience.”
The agency also noted that policy changes affecting spending on skin substitutes helped reduce what the increase otherwise would have been. Regardless of the policy details, the practical takeaway for retirees is straightforward: the monthly healthcare line item is higher in 2026.
How Much More Could a Dripping Springs Retiree Pay?
For someone paying the standard Part B premium, the change looks like this:
| 2025 | 2026 | |
|---|---|---|
| Monthly Part B premium | $185.00 | $202.90 |
| Annual Part B premium | $2,220.00 | $2,434.80 |
| Annual deductible | $257 | $283 |
For two spouses paying the standard premium, the annual Part B cost rises from approximately $4,440 to $4,869.60.
That additional $429.60 may need to compete with other priorities, including:
- Maintaining a larger home or acreage property
- Homeowners, auto, or supplemental insurance
- Travel to visit children and grandchildren
- Dining, wineries, and local entertainment
- Fitness, wellness, and preventive care
- Emergency reserves and major home repairs
- Support for family members or charitable giving
For many affluent retirees, the issue is not whether they can absorb the increase. It is whether their retirement income plan reflects the increase accurately and continues to support the lifestyle they want.
Higher-Income Retirees May Pay More
The $202.90 figure applies to most Part B beneficiaries. However, higher-income beneficiaries may pay an additional amount called an Income-Related Monthly Adjustment Amount, or IRMAA.
For 2026, Medicare generally uses modified adjusted gross income from 2024 to determine whether a beneficiary pays more. CMS reports that roughly 8% of people with Medicare Part B are subject to these income-related adjustments.
For beneficiaries with full Part B coverage, the 2026 monthly premiums are:
| 2024 modified adjusted gross income | Individual filer | Joint filer | 2026 monthly Part B premium |
|---|---|---|---|
| Standard tier | $109,000 or less | $218,000 or less | $202.90 |
| Tier 1 | Over $109,000 to $137,000 | Over $218,000 to $274,000 | $284.10 |
| Tier 2 | Over $137,000 to $171,000 | Over $274,000 to $342,000 | $405.80 |
| Tier 3 | Over $171,000 to $205,000 | Over $342,000 to $410,000 | $527.50 |
| Tier 4 | Over $205,000 to under $500,000 | Over $410,000 to under $750,000 | $649.20 |
| Tier 5 | $500,000 or more | $750,000 or more | $689.90 |
These thresholds are not a substitute for reviewing your own Medicare notice. The Social Security Administration will tell you the exact amount you owe, and individual circumstances can affect the final figure.
A one-time event: such as the sale of a business, a large capital gain, or a significant distribution from a retirement account: may affect the income used to calculate a future IRMAA determination. That makes coordination between your retirement income strategy and your Medicare costs especially important.
This is not a reason to avoid legitimate financial decisions. It is a reason to understand how different sources of income may affect your overall retirement cash flow.
Four Practical Steps to Take Now
1. Update your monthly retirement budget
Start with the amount that applies to your situation. If you and your spouse both pay the standard Part B premium, add approximately $35.80 per month to the household budget.
Then look beyond Part B. Review your current premiums for:
- Prescription drug coverage
- Medicare Advantage or supplemental coverage
- Dental and vision plans
- Long-term care insurance
- Out-of-pocket medical expenses
A retirement budget should reflect the life you actually live: not an outdated estimate created several years ago.
If your Dripping Springs lifestyle includes frequent travel, restaurants, winery visits, or significant property upkeep, healthcare costs should be incorporated alongside those priorities rather than treated as an afterthought.
2. Check your Social Security and Medicare notices
Do not assume that everyone pays $202.90. Your amount may be higher because of IRMAA, a late-enrollment penalty, or another individual factor.
Review your Social Security notice and Medicare materials carefully. The official Medicare cost guide for 2026 provides a helpful summary of premiums and deductibles.
If your income has fallen because of a life-changing event: such as retirement, divorce, the death of a spouse, or the loss of a pension: you may be able to ask Social Security to reconsider an income-related adjustment. Contact Social Security directly or speak with a qualified Medicare professional about the appropriate process.
3. Keep healthcare reserves liquid
Healthcare expenses are not always predictable. A planned premium increase is one thing; an unexpected procedure, extended recovery, or new medication can have a larger effect on cash flow.
For that reason, many retirees value having a portion of their portfolio and savings in accessible, transparent investments rather than relying entirely on assets with long lockups or complicated withdrawal rules.
A thoughtful retirement portfolio may use a combination of publicly traded investments, traditional fixed income, and long-term equity ownership. The appropriate mix depends on your goals, time horizon, spending needs, and ability to tolerate market changes.
The central idea is simple: your healthcare reserve should be available when you need it.
4. Review income sources before taking large distributions
Retirees often draw income from several places, including Social Security, pensions, taxable investment accounts, IRAs, and business interests. The timing and size of withdrawals can affect both spending cash flow and the income used for future Medicare calculations.
This does not mean every retiree should use one account before another. It means withdrawals should be considered as part of a broader plan.
A fiduciary financial advisor can help you evaluate questions such as:
- How much income do you need each month?
- Which accounts are best suited for near-term spending?
- How much should remain invested for long-term needs?
- Could a large distribution create an unexpected premium surcharge?
- Does your portfolio provide enough liquidity for healthcare and lifestyle expenses?
Medicare Planning Is Part of Lifestyle Planning
Moving to Dripping Springs is about more than choosing a home. It is about shaping a retirement lifestyle around nature, community, wellness, and the freedom to spend your time differently.
As we have explored in our article on wellness resources for Dripping Springs retirees, staying active and connected can be an important part of enjoying life in the Hill Country. Our discussion of slow living and mental well-being also reflects a broader truth: financial decisions should support the way you want to live.
Medicare premiums are only one part of that picture, but they are a recurring expense that deserves attention. A $17.90 monthly increase may be manageable. The bigger risk is allowing a series of small cost increases to quietly erode the margin you intended for travel, hobbies, family, and everyday enjoyment.
The best next step is not to panic or make a rushed investment decision. It is to update your numbers, confirm your actual Medicare costs, and make sure your retirement income strategy still matches your priorities.
Schedule a private meeting with a fiduciary financial advisor today by calling (512) 593-8380 or by visiting: https://calendly.com/portafoliocapital/15min
Portafolio Capital Management dba Mau Sanchez Capital is a Registered Investment Adviser. This content is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any security. Advisory services are provided only pursuant to a written advisory agreement.
To learn more about Portafolio Capital Management dba Mau Sanchez Capital, visit https://portafoliocapital.com/ or call (512) 593-8380.
This article may include stories, scenarios, and perspectives created or assisted by artificial intelligence. Although the individuals and circumstances described may be fictional, the topics are intended to reflect real financial, personal, and lifestyle issues that retirees and individuals commonly face.
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