Medicare costs will significantly reduce Social Security cost-of-living increases for older Americans in the coming year.

The Centers for Medicare and Medicaid Services (CMS) have announced significant changes to Medicare costs for 2026, which are poised to impact millions of older Americans. The standard monthly premium for Medicare Part B, which provides coverage for outpatient care, doctors’ services, and preventive care among other services, will increase to 2.90. This represents a rise of .90, or nearly 9.7%, from the previous year’s premium of 5.00.

While this increase is less than the .50 hike projected earlier by the Medicare Trustees, it constitutes the second-largest dollar increase in the program’s history, ranked just behind the .60 rise seen in 2022. Notably, this increase in Medicare costs coincides with a relatively modest 2.8% cost-of-living adjustment (COLA) for Social Security recipients, which translates to an average increase of in monthly Social Security checks starting in January 2026. As a result, after factoring in the new Medicare premium increase, the net benefit from Social Security will effectively drop to approximately .10.

This situation has raised concerns among experts regarding the standard of living for seniors. Analysts indicate that many older Americans are likely to experience a downturn in their financial security as the costs associated with Medicare increasingly overshadow their Social Security income.

One protective measure available to certain beneficiaries is the hold-harmless provision, designed to prevent the increase in Medicare Part B premiums from exceeding the COLA for Social Security. This provision, however, applies only to recipients earning a Social Security benefit of 0 or less. In 2022, only about 1.5% of Medicare beneficiaries qualified under this criteria.

Along with the rise in premiums, Medicare enrollees will also face an increase in the annual deductible, which will rise to 3 in 2026, up from 7 in 2025.

Additionally, some Medicare Part D plans are preparing to increase their premiums by up to in the coming year, which has drawn further concern regarding the overall affordability of health care for seniors. The total number of stand-alone Part D plans has reportedly halved since 2024, complicating matters further for beneficiaries searching for affordable coverage.

In light of these developments, it is crucial for seniors and their families to stay informed about changes in Medicare and Social Security policies. These adjustments underscore the ongoing financial challenges faced by older Americans as they navigate rising healthcare costs amidst limited income growth. Media News Source will continue to provide updates on these issues as they evolve.