Why 2028 Could Bring Unexpected Medicare Cost Jumps: A Two-Year Lag You Can't Ignore

Think your Medicare costs today will look the same in two years? Think again. If your income rises significantly this year, you’re potentially setting yourself up for a nasty financial surprise when 2028 rolls around. This counterintuitive timing issue affects millions of retirees and those approaching retirement age, yet most people have no idea it’s coming.

The Hidden 2028 Connection: How 2026 Income Triggers Future Premiums

Here’s the mechanics behind this timing trap: Medicare premiums aren’t determined by your current year income. Instead, your premiums are calculated based on earnings from two years prior. This means that any income spike you experience in 2026 will directly determine what you pay for Medicare coverage starting in 2028.

So if you’re planning a career change, expecting a substantial bonus, collecting Social Security benefits for the first time, or facing your first required minimum distribution (RMD) from retirement accounts, your 2026 numbers matter tremendously—but not for 2026 taxes. They matter for 2028 Medicare costs. This two-year lag creates a planning challenge that catches many retirees off-guard because they’re focused on managing current-year taxes, not future healthcare expenses.

Breaking Down IRMAAs: The Income-Based Surcharges Reshaping Medicare Costs

While most Medicare enrollees think of coverage as relatively affordable, the reality is more complex. Medicare Part B, which covers outpatient care, carries a standard monthly premium (currently around $202.90). However, higher-income beneficiaries face additional charges on top of this base premium.

These extra charges are called Income-Related Monthly Adjustment Amounts, or IRMAAs. Once your income crosses certain thresholds, IRMAAs kick in for both Part B coverage and Part D prescription drug plans. The surcharges aren’t small adjustments either—they can add hundreds of dollars per month to your total Medicare bill.

The IRMAA calculation is straightforward in concept but devastating in practice: the IRS looks at your Modified Adjusted Gross Income (MAGI) from two years back and applies the IRMAA brackets that were in effect. Your 2026 income determines your 2028 IRMAA levels. This structure creates a unique planning opportunity for those willing to get proactive.

Why This Matters: Real Dollar Amounts and Planning Opportunities

You might dismiss IRMAAs as a minor issue, but they represent substantial money. A high earner triggering IRMAA surcharges could see their monthly Medicare premiums jump by $300, $400, or even more—translating to thousands of dollars annually between now and 2028.

For this reason, understanding how these brackets work isn’t just academic—it’s essential financial planning. If you anticipate significant income growth in 2026, consulting with a tax professional now could reveal strategies to manage your 2026 income down, potentially allowing you to avoid IRMAA territory altogether in 2028.

Some tactics include delaying Social Security benefits if you’re eligible, strategically timing retirement account withdrawals, or directing required minimum distributions directly to qualified charities rather than taking them as taxable income. Each option has different implications, but the key is recognizing the 2028 risk early enough to act on it.

Protecting Your 2028 Budget: Strategic Steps to Take Now

The window for 2028 planning is now. If you’re expecting a significant income event in 2026—whether that’s a promotion, business income spike, or benefit commencement—start conversations with your financial and tax team immediately. The two-year gap between income and Medicare impact might seem abstract now, but it’s very real in 2028.

Understanding the mechanics of how income from 2026 flows into your 2028 Medicare costs empowers you to make informed decisions today. Whether it’s restructuring your income sources, timing major financial events strategically, or simply planning for higher healthcare expenses, having a clear picture now prevents painful surprises down the road. Your 2028 Medicare bill is being shaped by decisions you make right now in 2026.