A new report highlights the long-term impact of retirement healthcare cost inflation across Medicare Part B, Part D, Medigap, Medicare Advantage and related out-of-pocket expenses, showing that healthcare inflation is not going away anytime soon and will eat into retirement budgets.
HealthView Services’ 2026 Retirement Healthcare Costs Data Report and Supplemental Data Fact Sheet show that despite legislative efforts to address rising expenses, health-related cost inflation is expected to remain stubbornly high with a projected long-term inflation rate of 5.8%, while Social Security COLAs for 2027 are currently projected to rise at only 2.4%.
“The report serves as a somewhat chilling reminder of the limited impact of legislative changes to reduce the burden of these costs, and that retirees will need a growing portion of future Social Security benefits to cover their expenses.”
HealthView Services CEO Ron Mastrogiovanni
Underscoring the challenge facing retirees, the report details that in 2026 Medicare Part B and Medicare Advantage premiums directly deducted from Social Security increased by 9.7% (from $185 in 2025 to $202.90 in 2026), and the Social Security COLA went from 2.5% in 2025 to 2.8% in 2026. It also notes that the national average Medicare Advantage inflation rate was 6.6%—reflecting the combined impact of higher Part B premiums deducted from benefits and additional Medicare Advantage premiums to cover drugs and other services.
“After a decade of publishing these data reports, the cost of health-related care in retirement still comes with sticker shock,” said Ron Mastrogiovanni, CEO of HealthView Services. “The report serves as a somewhat chilling reminder of the limited impact of legislative changes to reduce the burden of these costs, and that retirees will need a growing portion of future Social Security benefits to cover their expenses.”
Underscoring these trends, the report notes that since the passage of the Inflation Reduction Act in 2022, which reduced the cap on catastrophic prescription drug costs, Part D drug-related premiums have increased by 50%, and the decades-long trend of healthcare costs increasing at a rate of 1.5-2 times the consumer price index used to calculate COLAs remains in place.
HealthView Services’ national actuarial data show that for an average healthy 65-year-old couple, total annual healthcare costs for traditional Medicare programs commonly selected by advised clients, which includes Parts B, D, Medigap (Plan G), dental premiums, and all out of pocket expenses, will rise from $17,003 in the first year of retirement to $55,513 at 85 years old, assuming average longevity of 88 (male) and 90 (female). Over their lifetimes, total expected healthcare costs will amount to $661,812 in today’s dollars, or $955,411 (future value).
The report goes on to detail the importance of planning for expenses at an individual level to ensure key variables including health condition, income, state of residence and gender are accounted for. Lifetime costs for the same couple project to be as high as $1,053,252 living in Missouri, or as low as $878,565 in Washington State. The projected costs for an individual or couple with Type 2 diabetes would be significantly lower due to shorter life expectancy. Notably, these projections exclude long-term care costs, which the supplemental data details.
HealthView Services’ Retirement Healthcare Cost Index launched in 2017 in an effort to compare healthcare expenses to Social Security benefits. An average 65-year-old couple can expect to receive lifetime Social Security benefits of $802,233, based on a combined PIA of $3,183. As the Supplemental Data Fact Sheet outlines, 84% of these benefits will be required to address their projected total lifetime healthcare costs. A similar 55-year-old couple will need 104% of Social Security to cover these expenses, and a 45-year-old couple 20 years from retirement will need 129% of their benefits.
The report highlights specific challenges facing women who on average receive around 75% of the Social Security retirement benefits of men; will live on average at least 2 years longer; and will incur around 15% higher retirement healthcare costs largely because of their extra longevity. When a partner passes away, women from more affluent households potentially face the dual challenges of lower retirement income and higher Medicare premium surcharges based on MAGI.
“Given the complexity of retirement healthcare choices, Americans planning for retirement need expert help from advisors,” said Michael Daley, HealthView Services’ Head of Research and Marketing. “The actuarial cost projections HealthView Services provides for individuals and couples are the starting point for building retirement plans that account for healthcare needs in retirement.”
The report also includes a special mention that on Jan. 26, 2026, the Centers for Medicare & Medicaid Services (CMS) released 2027 payment proposals affecting Medicare Part D and Medicare Advantage insurers. This included a plan to increase payments to insurers by 0.09%, well below analyst expectations of around 5%. Should this take effect without adjustment, insurers may pull back offerings, reduce benefits, or include more restrictions within their offered plans.
HealthView Services draws on 530 million healthcare cases, as well as government data, to actuarially project retirement healthcare costs for the clients of financial services institutions. The firm provides an array of planning apps, from 401(k) participant-focused to advisor-facing with the goal of creating funding solutions to cover future in-retirement health care expenses.
SEE ALSO:
• 2026 Medicare Part B Increase to Eat Up Much of Social Security COLA Raise
• Healthcare Costs in Retirement Continue Upward Trajectory in 2025