Medicare Premiums Took Back Nearly a Third of the 2026 COLA. What About 2027?
Key Points
The Medicare Part B premium grew by nearly 10% in 2026, compared with a 2.8% Social Security COLA.
Because of this, the higher premium consumed about one-third of the average retiree’s COLA.
It’s too early to know for sure, but there’s a good chance we’ll see a high growth rate in Medicare premiums again in 2027.
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Social Security recipients received a 2.8% cost-of-living adjustment (COLA) for 2026, which added $54 to the average retired worker's monthly payment. The annual COLA is designed to help seniors keep up with the rising costs of living throughout their retirement.
Unfortunately, the average retiree didn't actually receive a $54 raise. Thanks to rising healthcare costs, the actual increase in the typical Social Security check was about one-third less than many expected.
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How Medicare took away one-third of the 2026 COLA
As mentioned, Social Security beneficiaries were given a 2.8% COLA in 2026. At the same time, the standard Medicare Part B premium increased by nearly 10% to $202.90 per month, up $17.90 from the previous level.
Here's what this meant to retirees:
- In 2025, the average retired worker received about $1.976 per month from Social Security.
- The 2.8% Social Security COLA gave the average retired worker a $54 increase.
- Most retirees 65 and older pay their Medicare Part B premiums directly from their Social Security checks.
- The approximately $18 Medicare Part B increase reduced the effective Social Security increase from $54 to $36 per month.
Will it happen again in 2027?
To be sure, it is too early to know for sure what the 2027 COLA or the 2027 Medicare Part B premium will be. We can expect the actual numbers closer to the end of the year.
However, the latest projections from the Senior Citizens League call for another 2.8% COLA for 2027. Based on the latest Social Security payment data, this would be a $57 raise for the average retired worker.
We don't yet know what the Medicare Part B premium will be, and we don't have any reliable projections. But the latest edition of the Medicare Trustees Report projected that Part B premiums would rise by an average of 6.4% per year for the next five years.
Using this average as a guideline, this implies that the standard Medicare Part B premium could rise by about $13 next year, bringing the effective COLA down to $44. That's certainly higher than the effective COLA last year, but it still means that by the time payments are deposited into Social Security recipients' bank accounts, the actual raise will be significantly less than 2.8.
The key takeaway -- in any year when Medicare premiums increase faster than Social Security benefits, the COLA won't be as impactful as it sounds. And according to projections from the Medicare Trustees Report, that's expected to be the case for the foreseeable future.
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