Retirement Social Security

Medicare’s New 2026 Premiums Aren’t Pretty - Especially for Social Security Enrollees

How rising 2026 Medicare costs can shrink your Social Security raise.

By David Maina

Edited by Amanda Machado

Updated Dec. 9, 2025

Many retirees count on their yearly Social Security raise to help them retire comfortably and deal with rising prices. For 2026, that increase is set at 2.8%. But a big part of that bump may disappear before it ever reaches your bank account, thanks to higher Medicare premiums.

This article walks through the new premiums, explains why they're rising, and shows how even a larger COLA can be offset by higher Medicare deductions.

Learn 7 ways to generate income with a $1,000,000 portfolio

Learn the strategies wealthy retirees use to fund their retirement with $1,000,000 — and how you can, too — with this new guide: The Definitive Guide to Retirement Income from Fisher Investments.

Fisher Investments has helped tens of thousands of investors retire comfortably since 1979. With over $332 billion under management, they provide tailored money management to help achieve long-term goals.

Get your guide here

2026 Medicare premiums in numbers

The Centers for Medicare & Medicaid Services (CMS) announced on Nov. 14, 2025, that both Medicare Part B premiums and deductibles will rise in 2026. The standard Part B premium climbs to $202.90 per month, up $17.90 from $185.00 in 2025. Likewise, the Part B annual deductible rises to $283, up from $257.

Almost all retirees have this premium taken directly from their Social Security checks, so the higher cost reduces the raise they'll see in January.

Part A, which covers hospital stays, stays premium-free for about 99% of seniors. Its deductible rises to $1,736 in 2026.

Medicare Part D (drug coverage) still varies by plan, but the average premium will be about $34.50 per month next year. High-income enrollees should note that IRMAA surcharges for Part D also increase, reaching up to $91 per month for the highest earners.

Who really has the cheapest auto insurance in your area? Check your zip code here.

Why premiums are rising

By law, premiums must cover about 25% of Medicare Part B spending, with the rest coming from federal revenue. So when health care costs go up, Part B premiums rise to match.

Recent analyses, including work from AARP, show that medical inflation is running hotter than overall inflation. New drugs, advanced treatments, and a growing senior population add to the pressure. As these costs rise, the formulas in the Social Security Act push premiums higher.

Also, Part B and Part D come out of the Supplementary Medical Insurance (SMI) Trust Fund, which relies on premiums and general revenue rather than payroll taxes.

Each year, CMS must set premiums high enough to keep that trust fund solvent. When projected spending increases, the required premiums increase too.

The premium hike vs. the COLA boost

The average retired-worker benefit will rise from about $2,015 to $2,071 next year. That's a $56 monthly increase before Medicare.

But the new $202.90 Part B premium cuts into that raise immediately, since Medicare takes its share straight from your check. Subtract the $17.90 premium hike, and the average retiree ends up with a net gain of about $39 a month.

The effect is sharper for people with smaller benefits. A 2.8% COLA on any check under roughly $640 comes to less than $17.90.

If your monthly check is around $600, the COLA comes to only $16.80, less than the premium jump. In that case, you fall under the "hold harmless" rule. You won't see your check drop, but you also won't see an increase. Your entire COLA is used to cover the Part B hike.

Higher-benefit recipients fare a little better. Someone with a $3,000 monthly check gets an $84 COLA. After subtracting $17.90 for Part B, they still clear a net raise of about $66 (assuming no IRMAA surcharges).

Get a protection plan on all your appliances

Did you know if your air conditioner stops working, your homeowner’s insurance won’t cover it? Same with plumbing, electrical issues, appliances, and more.

Whether or not you’re a new homeowner, a home warranty from Choice Home Warranty could pick up the slack where insurance falls short and protect you against surprise expenses. If a covered system in your home breaks, you can call their hotline 24/7 to get it repaired.

For a limited time, you can get your first month free with a Single Payment home warranty plan.

Get a free quote

High-income surcharges (IRMAA)

Higher-earning retirees pay much more for Medicare in 2026. About 8% of enrollees owe Income-Related Monthly Adjustment Amounts (IRMAA) on both Part B and Part D. These are added on top of the standard premium, and they come straight out of your Social Security check.

Here's what the 2026 numbers look like:

Single filers with MAGI (Modified Adjusted Gross Income) between $109,000 and $137,000 (or $218,000–$274,000 joint) will owe an extra $81.20, bringing their total Part B premium to $284.10.
Single filers earning $137,000 to $171,000 owe a $202.90 surcharge for a total of $405.80.
At the top tier, individuals with MAGI of $500,000 or more (or $750,000+ joint) will see an IRMAA of $487.00, for a total monthly Part B premium of $689.90.

For wealthier beneficiaries, these surcharges can erase most, or even all, of the 2.8% COLA increase.

Bottom line

Rising Medicare premiums can feel discouraging, especially when you've planned around a modest COLA and hoped for a little more breathing room next year. One thing many retirees overlook, though, is how much control they still have over the rest of their healthcare costs.

You can review your prescriptions, check your doctors' networks, and compare Medicare Advantage or Part D plans during open enrollment. Small adjustments like these can stretch your budget further and help you maintain a more stress-free retirement, even when the numbers don't break your way.

More from FinanceBuzz: