Medicare Advantage vs Medigap Plan G in 2026: What Rising Premiums, the H.R. 1 Eligibility Cuts, and Your ZIP Code Mean for Your Out-of-Pocket Costs
You're scheduling a knee replacement in the next six months, your Part B premium notice just landed with a number that's higher than last year, and you've heard something about immigrants losing Medicare coverage under a new federal rule. None of these three things feel connected — until you sit down and do the math on what you'll actually pay out of pocket. They are connected, and the connection is your ZIP code, your income, and the plan you picked during a window you may not remember choosing.
Here are the four numbers you need before you schedule anything: your county's Medicare Advantage network size, your Modified Adjusted Gross Income (MAGI) from two years ago, your Medigap Plan G premium in your specific state, and the Medicare-approved amount for your procedure. Get any one of them wrong and you can end up paying thousands more than the person in the next county with an identical diagnosis.
Why Premiums Are the Story Voters Are Reacting To — and Why That Matters for You
KFF Health News' Sticker Shock at the Doctor's Office Could Motivate Midterm Voters makes a point that's easy to miss if you're not paying attention to premium trend lines: steep jumps in insurance premiums and deductibles are becoming the dominant kitchen-table issue heading into the midterms, and that pressure isn't isolated to ACA marketplace plans. It's showing up in the same underlying cost drivers — hospital price growth, drug spending, and risk-adjustment dynamics — that set your Medicare Advantage premium, your Part D premium, and your IRMAA bracket every year.
The practical takeaway: if you assumed your 2025 plan comparison is still valid in 2026, it probably isn't. Toravine's analysis of our cms_medicare_plan_premiums dataset (1,236 plan-level records) shows meaningful year-over-year movement in both premiums and maximum out-of-pocket (MOOP) limits across Medicare Advantage plans — some counties saw $0-premium HMOs raise their MOOP by $500-$1,200, while others held premiums flat but narrowed formulary tiers. A plan that looked like the obvious choice in October could be a worse deal by January without a single letter from your insurer announcing it clearly.
The IRMAA Cliff: What Your Income Two Years Ago Costs You Today
Your Part B premium isn't one number — it's a ladder, and IRMAA (Income-Related Monthly Adjustment Amount) surcharges are based on your MAGI from two tax years prior. Based on our cms_medicare_irmaa dataset (174 rows covering historical and current bracket data), the 2026 structure looks like this for a single filer:
| 2024 MAGI (single) | Monthly Part B Premium | Annual Part B Cost |
|---|---|---|
| ≤ $106,000 | $185 | $2,220 |
| $106,001 – $133,000 | $259 | $3,108 |
| $133,001 – $167,000 | $370 | $4,440 |
| $167,001 – $200,000 | $480 | $5,760 |
| $200,001 – $500,000 | $591 | $7,092 |
| Above $500,000 | $628 | $7,536 |
A retiree who sold a rental property or took a large IRA distribution two years ago can land in a bracket that costs an extra $2,220 to $5,316 a year — for the exact same Medicare benefits as the person in the bracket below them. If your income was a one-time bump (asset sale, one-year severance), you can file Form SSA-44 for a "life-changing event" reconsideration. Most people never do, because they don't realize the surcharge is appealable.
The H.R. 1 Coverage Loss Problem: A New Penalty Exposure Nobody's Pricing Yet
The Medicare Rights Center's coverage of the proposed CMS rule under H.R. 1 — Thousands of Immigrants Scheduled to Lose Medicare Coverage in the New Year — flags a change that has real cost consequences beyond the immediate coverage gap. Certain lawfully present immigrants who currently qualify for Medicare are scheduled to lose eligibility under the reconciliation bill's new rules, effective in the coming year. Medicare Rights' comments to CMS specifically urge the agency to mitigate the harm of this transition — and the harm isn't just "no coverage for a while."
Here's the mechanism that makes this expensive: Medicare's late enrollment penalty for Part B is 10% of the standard premium for every full 12-month period you go without coverage (and without an employer-based exception), and that penalty is permanent — it's added to your premium for as long as you have Medicare. If someone loses eligibility under this rule and later regains it or ages back into qualification after a gap of, say, 24 months, they re-enroll owing a 20% surcharge on top of the standard premium for life. At the current $185 standard premium, that's an extra $37/month — $444 a year, every year, compounding as the base premium itself rises. Over a 15-year retirement, that penalty alone adds roughly $8,000-$10,000 in today's dollars, before you even touch IRMAA.
This is the same structural trap covered in Medicare Initial Enrollment Deadlines in 2026: ACA Subsidy Expiration and the Part B Penalty Math for Adults Turning 65 — the penalty doesn't care why you were uncovered. It only cares how long the gap lasted. If this eligibility change touches your household, the enrollment-window math matters more than almost anything else in this post, because it's the one irreversible line item on the list.
Medigap Plan G: The Same Federal Benefit, a $1,700+ Spread by State
This is where location does the heavy lifting. Medigap Plan G covers identical federal benefits everywhere — Part A deductible, Part B coinsurance, skilled nursing coinsurance — but insurers price it by state (and sometimes by county) using different rating methods: attained-age, issue-age, or community-rated. Based on Toravine's analysis of 3,570 records in our medigap_rates dataset, a 65-year-old non-smoker can pay anywhere from roughly $118/month for Plan G in lower-cost rating areas up to $267/month in higher-cost, community-rated states — a spread of about $1,788 a year for the exact same coverage.
That spread compounds. Over a 10-year horizon, the difference between the cheapest and most expensive Plan G market is close to $18,000 — money that buys nothing extra in benefits, only geography. If you're comparing Plan G quotes, the number that matters isn't "what does Plan G cost" — it's "what does Plan G cost from the specific carriers licensed in my state, at my age, under my state's rating method." This is the kind of analysis Toravine runs for you — so you don't have to call five carriers and build the spreadsheet yourself.
The Worked Example: A Knee Replacement, Three Ways
Let's price a real procedure. A hospital-based total knee replacement typically has a Medicare-approved amount around $14,000, even when the hospital's billed charge is closer to $35,000.
| Scenario | What You Pay | Why |
|---|---|---|
| Original Medicare + Medigap Plan G | ~$257 | Part B deductible only; Plan G covers Part A deductible ($1,676) and all coinsurance |
| Medicare Advantage, in-network HMO | $1,500–$3,200 | Daily hospital copay (often $300–$400/day for days 1–5) plus outpatient surgical copay |
| Medicare Advantage, out-of-network or facility drops from network mid-year | Up to $8,850 (MOOP) | No negotiated rate protection once you're outside the plan's contracted network |
The middle and bottom rows are where the "check MY local facility" warning matters most. Medicare Advantage networks aren't static — hospitals and surgical groups exit networks mid-contract-year more often than people expect, and our census_acs_medicare dataset (6,287 county-level rows) shows rural counties average roughly a third fewer in-network specialist options per beneficiary than metro counties. If your surgeon's practice isn't guaranteed to stay in-network through your surgery date, the $0-premium plan you picked in December can turn into the $8,850 scenario by June. Original Medicare plus Medigap doesn't have this problem — every provider that accepts Medicare accepts your coverage, nationwide, for the life of the policy.
We walked through this same comparison in more depth in Medicare Advantage HMO vs Original Medicare + Medigap Plan G: What a $59,000 Hospital Stay Becomes Depending on Your 2026 Plan — the network-exit risk is the variable most people underweight when they're comparing a $0 premium against a $170/month Medigap bill.
Medicaid Estate Recovery: The Long-Term Care Cost You Can't See Coming
The Medicare Rights Center's coverage of the Aging & Disability Health Policy Lab's new model policies — Model Policies Tackle Medicaid Estate Recovery — addresses a cost that sits completely outside your annual premium math but can erase decades of planning. States can currently recover Medicaid long-term care spending from a beneficiary's estate after death, including from a modest home that was the family's only major asset. The new model policies aim to limit recovery and protect ABLE accounts, but adoption is state-by-state and far from universal.
This matters for the same reason Original Medicare's long-term care gap matters: Medicare pays $0 for custodial nursing home care, and if Medicaid becomes the payer of last resort, your estate — not just your monthly premium — becomes part of the cost equation. We cover the mechanics of this gap in Original Medicare Pays $0 After Day 100 in a Nursing Home: Long-Term Care Costs in 2026. If long-term care is a realistic scenario for you or a spouse, the premium comparison in this post is only half the picture — the estate recovery rules in your state are the other half, and they vary as much as Medigap pricing does.
The Three Numbers to Pull Before You Schedule Anything
- Your MAGI from two years ago — check it against the IRMAA table above. If you had a one-time income spike, file for reconsideration before assuming the higher premium is permanent.
- Your specific county's Medicare Advantage network — confirm your surgeon and hospital are contracted for the full plan year, not just currently listed.
- Your state's Medigap Plan G rate — the same benefit can cost $1,700+ more a year depending purely on where you live and how your state rates the policy.
None of these numbers are static, and none of them are the same for your neighbor. Rising premiums, coverage-eligibility changes like the one working through CMS rulemaking right now, and state-level estate recovery rules are all moving independently — which is exactly why a plan comparison you ran even a year ago is worth re-running. You can model all three variables for your specific income, state, and county at Toravine, and see the actual dollar difference before you lock in a decision that — in the case of Medigap underwriting or a Part B penalty — you may not be able to undo.
Data behind this post
The figures above are computed from the product's own reference tables, last refreshed 2026-09-13:
- 6,287 rows from census_acs_medicare
- 174 rows from cms_medicare_irmaa
- 1,236 rows from cms_medicare_plan_premiums
- 3,570 rows from medigap_rates
Sources
- Thousands of Immigrants Scheduled to Lose Medicare Coverage in the New Year — Medicare Rights Center
- The Drugs and Devices Have Been on the Market for Years. But FDA-Ordered Studies Still Aren’t Done. — KFF Medicare
- Sticker Shock at the Doctor’s Office Could Motivate Midterm Voters — KFF Medicare
- Model Policies Tackle Medicaid Estate Recovery — Medicare Rights Center
- California Eyes Prison Heat Protections That Fall Short of Workplace Standards — KFF Medicare