Millions of retirees entered 2026 expecting a raise. What they got was a bill.
Social Security’s cost-of-living adjustment came in at 2.8% this year, adding about $56 a month to the average benefit check. Part B premiums jumped $17.90 at the same time, rising from $185 to $202.90 a month. For most retirees, that premium comes straight out of their Social Security payment before it ever arrives.
Nearly one-third of the average raise was already spoken for on day one. It marks the first time in the program’s history that standard Part B premiums have cleared $200 a month.
The COLA that wasn’t
Social Security puts the average retirement benefit at $2,071 a month in 2026. The 2.8% COLA added roughly $56 to that figure. Medicare immediately claimed $202.90 of the total check, up from $185 the year before.
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The net gain for the average retiree, after accounting for the premium increase, was closer to $38 a month. That is before groceries, prescriptions, or any other cost that also climbed this year.
The annual Part B deductible rose too, from $257 to $283, meaning retirees absorb more out of pocket before Medicare covers anything. The Centers for Medicare and Medicaid Services announced both increases in November 2025, citing projected price changes and higher utilization of medical services. The 9.7% premium spike was the largest Part B increase in four years.
Higher earners face a steeper climb
The $202.90 standard premium applies only to those earning below $109,000 as a single filer, or $218,000 filing jointly, based on 2024 tax returns. Above those thresholds, the IRMAA surcharge kicks in. Premiums for affected beneficiaries range from $284.10 to $689.90 a month.
About 8% of Medicare beneficiaries pay these surcharges. The structure is unforgiving: earning just one dollar over a threshold triggers the full surcharge for that bracket, potentially adding more than $1,000 a year.
Low-income seniors may qualify for Medicare Savings Programs.
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There is another wrinkle. The surcharge is based on income from two years prior, so retirees who had a high-earning year in 2024 may face a larger premium bill this year even if their income has since fallen.
Those who believe their 2024 filing no longer reflects their current situation can appeal using SSA Form SSA-44, which covers qualifying life changes including retirement, divorce, or the death of a spouse.
What retirees can do now
There are several moves worth considering. Low-income beneficiaries may qualify for Medicare Savings Programs, which can help cover Part B premiums, deductibles, and copays. Retirees on Medicare Advantage should also review their plan during open enrollment, which runs October 15 through December 7, to see if switching could lower monthly costs.
Steps worth taking before the end of 2026
- Appeal your IRMAA if your income has dropped. Use SSA Form SSA-44 to report qualifying life changes such as retirement or the death of a spouse.
- Check Medicare Savings Programs. Eligibility varies by state, but qualifying beneficiaries can get significant help with premiums and cost-sharing.
- Review your Medicare Advantage plan in October. Open enrollment runs October 15 through December 7. Switching plans can meaningfully reduce annual costs.
- Look into Medigap coverage. Medicare Supplement plans cover the 20% coinsurance gap that traditional Medicare leaves open, limiting exposure to large out-of-pocket bills.
Retirees watching income closely around IRMAA thresholds should also pay attention to Roth conversions, required minimum distributions, and part-time work. All of these can push income into a higher bracket. A financial advisor can help time those moves to avoid a costly premium jump two years down the line.
The $200 milestone is historic. For most retirees, the more pressing reality is what happens next. Healthcare costs have consistently outpaced broader inflation. Until that changes, the gap between the raise and the bill is likely to keep widening.