Medicare premium hike will cut into 2026 Social Security checks

Medicare premiums are set to increase for 2026, putting a dent in retirees' Social Security checks.

The Centers for Medicare & Medicaid Services announced that 2026 monthly Part B premiums will climb to $202.90, an increase of $17.90 from $185 this year. And the annual Part B deductible, which most people must pay before their Medicare coverage begins, will rise by $26 in 2026, to $283 from $257 in 2025.

“That’s the second-highest Part B premium increase in program history,” Mary Johnson, a Social Security and Medicare policy analyst, told Yahoo Finance.

It hits just as seniors are coming to terms with the modest 2.8% cost-of-living adjustment (COLA) increase in the retirement benefit that starts in January. Taken together, it means the higher Medicare premiums will consume nearly a third of the average Social Security COLA, which is about $56 for 2026. The Social Security Administration says the average retired worker's monthly benefit will rise from $2,015 to $2,071.

This is especially noteworthy when considered in relation to the COLA. “That’s a 9.7% rate of increase vs. a COLA rate of just 2.8%,” Johnson said. “Part B premiums are rising almost 3.5 times faster than the COLA.”

Not everyone will feel the squeeze. Under Social Security “hold harmless” rules, a person’s Part B premium increase cannot be larger than their COLA.

Eligibility is limited to those who have their Part B premiums deducted directly from their Social Security benefits and do not pay a higher premium due to income.

According to Philip Moeller, a Medicare and Social Security expert who writes the Aging in America newsletter, it’s estimated that roughly a million Social Security beneficiaries will see their Part B increase capped because of the hold harmless provision.

Medicare 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.

Read more: How to find your 2026 Social Security COLA increase

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More Medicare cost increases

The agency also announced other 2026 Medicare cost increases, including the high-income surcharges.

Since 2007, a beneficiary’s Part B monthly premium has been based on his or her income. About 8% of Medicare users earn too much to qualify for the standard Part B and Part D premiums and must pay the surcharges.

In 2026, Medicare beneficiaries with an income exceeding $109,000 for single-tax filers and $218,000 for joint filers will pay the surcharge. For these beneficiaries, total monthly Part B premiums will range from $284.10 to $689.90.

Calculations have a two-year lag time. Whether you pay a surcharge in 2026 depends on the income shown on your 2024 tax returns.

Major deductibles and copays for hospital insurance will also rise 3.6% next year. These are not annual charges but normally apply to 60-day episodes of hospitalized healthcare.

“People on original Medicare with private Medigap supplement insurance and those with private Medicare Advantage plans should check with their insurers for estimates of the out-of-pocket impact of the new rates,” Moeller said.

Read more: Medicare open enrollment: How to add or adjust your coverage

Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work," and "Never Too Old to Get Rich." Follow her on Bluesky.

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