Medicare Advantage overpayments are driving Part B premiums toward $415 a month

Monthly Part B premiums will reach $415 by 2035. This figure represents a more than 20% reduction in the average $1,976 Social Security retirement benefit for the average beneficiary. Approximately 70% of beneficiaries have these premiums deducted directly from their Social Security checks.

This projected increase is driven by the overall cost of the Medicare program. The Centers for Medicare and Medicaid Services sets the standard monthly premium based on projected program costs for the coming year. Because the premium is set nationally, any factor that increases total spending drives up the cost for all 50 million enrollees.

According to a March 2026 report from the Joint Economic Committee, Medicare Advantage plans cost the federal government significantly more than traditional Medicare. Private insurers use a billing practice called upcoding, recording more diagnoses for enrollees regardless of whether those diagnoses reflect treatment needs, to increase payments. In 2025, the gap between Medicare Advantage and traditional Medicare costs was between $76 billion and $84 billion.

Since 2016, these overpayments have added $82 billion to Part B premiums. The Joint Economic Committee projects that of the $5,000 projected annual premium in 2035, about $450 will be directly attributable to Medicare Advantage overpayments continuing at the current rate.