Much Medicare Hike Trim: 2026 Social Security COLA Impact
Medicare Part B premiums are set to rise to $202.90 a month in 2026, taking nearly a third of the average Social Security cost-of-living increase. Some…
Medicare premiums will take a larger share of many retirees’ Social Security increase in 2026, as the standard monthly Part B charge rises to $202.90. The increase is set to absorb nearly a third of the average monthly cost-of-living adjustment, according to figures reported by Yahoo Finance.
The higher premium takes effect as retirees begin receiving a 2.8% Social Security cost-of-living adjustment. The Centers for Medicare & Medicaid Services said the Part B premium will increase by $17.90 from $185 this year, while the annual deductible will rise to $283 from $257 in 2025.
That leaves less of the benefit increase available for other expenses. The Social Security Administration says the average retired worker’s monthly benefit will rise from $2,015 to $2,071, an increase of about $56.
The premium change is not the same for every beneficiary.
Mary Johnson, a Social Security and Medicare policy analyst, told Yahoo Finance the increase is “the second-highest Part B premium increase in program history.” She said the premium is rising at a 9.7% rate, compared with a 2.8% COLA rate, or almost 3.5 times faster.
Who may be protected from the Medicare hike
Some beneficiaries may have their Part B premium increase limited by Social Security’s “hold harmless” rules. Under the provision, the premium increase cannot exceed a person’s COLA.
The protection is not universal. It applies to people whose Part B premiums are deducted directly from their Social Security benefits and who do not pay a higher premium because of their income.
Philip Moeller, a Medicare and Social Security expert who writes the Aging in America newsletter, estimated that roughly a million Social Security beneficiaries will have their Part B increase capped under the rule.
Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment and other health services not covered by Medicare Part A. The deductible is what most beneficiaries must pay before their Medicare coverage begins.
For retirees whose premiums are withheld from their benefit, the key practical effect is the net increase in the monthly check, not just the announced COLA. The hold harmless provision can limit that deduction for eligible people, but beneficiaries outside its conditions will face the standard increase or an income-based surcharge.
Higher-income beneficiaries face surcharges
The Centers for Medicare & Medicaid Services also announced higher-income surcharges for 2026. About 8% of Medicare users earn too much to qualify for standard Part B and Part D premiums and must pay the additional charges.
In 2026, beneficiaries with income exceeding $109,000 for single tax filers or $218,000 for joint filers will pay a surcharge. Their total monthly Part B premiums will range from $284.10 to $689.90.
The surcharge calculation uses income information from two years earlier. That means the 2026 charge depends on income reported on a beneficiary’s 2024 tax return.
Other costs are rising, too. Major hospital insurance deductibles and copays will increase 3.6% next year. They are not annual charges, but normally apply to 60-day episodes of hospitalized health care.
Moeller said people with original Medicare and private Medigap supplement insurance, as well as those enrolled in private Medicare Advantage plans, should check with their insurers for estimates of the out-of-pocket effect of the new rates.
The standard monthly Part B premium is scheduled to reach $202.90 in 2026.
Source: finance.yahoo.com
