NewsMilliman 2026 Retiree Health Cost Index: A 65-Year-Old Couple Needs $418,000 in Savings for Healthcare in RetirementMilliman 2026 Retiree Health Cost Index: A 65-Year-Old Couple Needs $418,000 in Savings for Healthcare in Retirement
Milliman's 2026 Retiree Health Cost Index projects that a healthy 65-year-old couple retiring in 2026 needs $418,000 in savings under Medigap (+7.7% from 2025) or $211,000 under MAPD (+15.3% from 2025). Projected lifetime healthcare spending stands at $637,000 under Medigap and $320,000 under MAPD. Rising premiums, higher Part B costs, reduced supplemental benefits, and increased cost-sharing are the primary drivers of this year's increases. Despite the record single-year jump, average annual growth between 2022 and 2026 remains roughly 3% for Medigap and 2% for MAPD.
*this image is generated using AI for illustrative purposes only.
Milliman, Inc., a premier consulting and actuarial firm, has released its 2026 Retiree Health Cost Index (RHCI), projecting how much a healthy 65-year-old can expect to spend on healthcare throughout retirement. The index accounts for variables such as geographic location, retirement timing, and coverage selection, all of which can significantly influence total premiums and out-of-pocket expenses. This year's edition marks the largest single-year increase in the index's history, underscoring the growing financial burden of healthcare planning for retirees.
2026 Savings Projections by Coverage Type
According to the 2026 RHCI, a healthy 65-year-old couple retiring this year faces substantially different savings requirements depending on the coverage pathway chosen. The following table summarizes the key projections:
| Metric: | Original Medicare + Medigap Plan G + Part D | Medicare Advantage + Part D (MAPD) |
|---|---|---|
| Required Savings (2026): | $418,000 | $211,000 |
| Change from 2025: | +$30,000 (+7.7%) | +$28,000 (+15.3%) |
| Projected Lifetime Healthcare Spend: | $637,000 | $320,000 |
The Medigap pathway requires significantly higher upfront savings, while the MAPD pathway recorded a steeper percentage increase year-over-year at 15.3% compared to 7.7% for Medigap.
Factors Driving the 2026 Increases
Several distinct factors are contributing to the increases observed across both coverage pathways in 2026.
Medigap pathway drivers include:
- Higher Medigap premiums
- Higher Medicare Part B premiums
- An uptick in projected long-term healthcare inflation
- Partially offset by lower Part D premiums
MAPD pathway drivers include:
- Premium increases across most states in 2026, reflecting rising medical costs
- Plan adjustments following changes to Part D
- Reduced supplemental benefits
- Higher cost-sharing requirements driving up expected out-of-pocket costs
Longer-Term Trend Remains Moderate
Despite the sharp single-year jump, the longer-term trajectory of healthcare cost growth in retirement remains comparatively measured. Between 2022 and 2026, the Medigap pathway has recorded roughly 3% average annual growth, while the MAPD pathway has seen approximately 2% average annual growth over the same period.
"Healthcare costs in retirement don't move in a straight line, and 2026 is a good reminder of that," said Robert Schmidt, co-author of the RHCI. "Out of pocket costs are an important part of retirement planning, and how much a person spends will depend on a variety of health and other factors."
The complete 2026 Retiree Health Cost Index is available at milliman.com/retireehealthcosts.
Will the 15.3% surge in Medicare Advantage costs prompt a significant shift in enrollment toward traditional Medicare and Medigap plans?
How might the reduction in supplemental benefits and increased cost-sharing within MAPD plans impact the long-term financial solvency of the Medicare Advantage program?
Are the specific drivers of the 2026 spike, such as long-term care inflation and Part D adjustments, expected to persist into the 2027 projections?
19
Create Custom Screeners 
Access 200+ Pre-built Filters 
Use 50+ Readymade Screener 
