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For retirees, rising Medicare costs can quickly erode the benefit of annual Social Security increases.
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Social Security recipients will see a 2.8% COLA increase in 2026, but some of that boost is to be offset by rising Medicare Part B premiums.
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The monthly Medicare Part B premium will rise almost 10% to $202.90 per month, cutting into the 2026 COLA announced last month.
That extra cash landing in your Social Security check next year? Don’t spend it just yet.
Medicare just announced its 2026 premiums, and they’re about to take a bite out of your cost-of-living raise. For the average retiree, what looked like a $57 monthly boost will shrink to just $39 after accounting for changes in the standard monthly premium.
While retirees are set to receive a 2.8% boost from Social Security’s cost-of-living adjustment (COLA), the standard Medicare Part B premium is going up to $202.90, up $17.90 from 2025.
Since Medicare Part B premiums are automatically deducted from your Social Security payments, the premium spike directly cuts into your COLA increase. Medicare Part B premiums cover essentials like doctor visits, outpatient care, and certain hospital services.
The average monthly Social Security benefit is $2,015. After the 2.8% COLA, that should jump by $57 to $2,072. But once Medicare takes its $17.90 cut, you’re left with just $39.10 more per month.
However, some won’t have to pay the full premium increase: If the premium increase is more than your COLA for 2026, your monthly benefits will stay the same. This is due to a rule known as the “hold harmless provision.”
For example, if your monthly benefit is less than $640, your COLA would be less than $17.90 (the amount of the premium increase). So, your benefit won’t drop next year—it just won’t grow either.
Medicare Part B premiums are set to increase 9.7% in 2026. Typically, most people who pay for Medicare Part B will have to pay the full amount of the increase in 2026, but if your benefit and COLA are small enough, you might not have to.
So why are Medicare Part B premiums increasing next year?
“The increase in the 2026 Part B standard premium and deductible is mainly due to projected price changes and assumed utilization increases that are consistent with historical experience,” the Centers for Medicare & Medicaid Services said in its press release.
Translation: Health care costs keep rising, and more people are using Medicare services.
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