2026 Social Security COLA Rise Eroded by Medicare Premium Increases

Social Security benefits for 2026 are projected to increase by approximately 2.7%, providing an estimated $54 monthly boost for recipients. However, this increase is significantly offset by a rise in Medicare Part B premiums, which are expected to climb 11.6%, from $185 to about $206.50 per month. This premium hike alone could consume nearly 40% of the Social Security cost-of-living adjustment (COLA) increase.

In addition to Part B premiums, other healthcare expenses such as Medicare Part D premiums, deductibles, and out-of-pocket costs are also rising. Part D premiums are expected to increase by around 6%, and the Part B deductible is set to increase by 11.2%, from $257 to $288. These rising healthcare costs are forcing many seniors to reduce spending on essentials, including groceries and necessary medications.

The discrepancy between the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which determines COLA, and the actual inflation experienced by retirees—especially in healthcare expenses—raises concerns. Many seniors may find that the COLA increase does not translate to real financial improvement due to the higher medical costs automatically deducted from their Social Security checks.

This gap has led to calls from senior advocacy groups to reconsider how COLA is calculated or to better index these adjustments to retirees' actual cost burdens, specifically related to healthcare. Senior advocacy groups highlight that the current COLA measures fail to capture retirees' true inflation experience.

Overall, the projected rise in Social Security benefits will likely be largely absorbed by increased Medicare and healthcare expenses, leaving many retirees with limited net financial gains in 2026. This situation underscores ongoing challenges in aligning Social Security adjustments with the real economic conditions faced by older Americans.