Medicare Costs Are Rising Faster Than Social Security COLA—Again: What the 2026 Update Means for Retirees

Each year, millions of retirees wait for two announcements:

• The Social Security cost-of-living adjustment (COLA)
• The updated Medicare premiums, deductibles, and coinsurance amounts

Ideally, these would move together. If Medicare costs rise, Social Security increases should offset them—at least partially. But once again in 2026, they do not. The 2026 COLA is 2.8%, a modest increase in line with recent inflation trends. Meanwhile, Medicare premiums and deductibles are rising far more aggressively.

This widening gap—where healthcare costs outpace benefit increases—continues to strain retirees’ budgets. At NSSA®, we believe retirees deserve clarity and control, so we break down this year’s changes, what they mean for your income, and why planning ahead matters more than ever.

The 2026 Medicare Update: What’s Changing and Why It Matters

On November 14, 2025, the Centers for Medicare & Medicaid Services (CMS) released the official 2026 Medicare numbers. Here’s a full breakdown of the most important changes affecting retirees. (Source: CMS 2026 Medicare Parts A & B Premiums and Deductibles 2026 Medicare Parts A & B Premi…

Medicare Part A: Deductibles and Coinsurance Increasing Across the Board
Most retirees do not pay a premium for Part A, but the cost-sharing amounts—the deductibles and coinsurance—impact nearly everyone at some point.

2025 vs. 2026 Part A Cost Details

Inpatient hospital deductible:
• 2025: $1,676
• 2026: $1,736 (↑ $60)

Hospital coinsurance for days 61–90:
• 2025: $419/day
• 2026: $434/day (↑ $15)

Lifetime reserve day coinsurance:
• 2025: $838/day
• 2026: $868/day (↑ $30)

Skilled Nursing Facility (SNF) coinsurance (days 21–100):
• 2025: $209.50/day
• 2026: $217/day (↑ $7.50)

These increases add up quickly, especially for those who experience longer hospital stays or need SNF care.

Medicare Part B: The Most Noticeable Increase for Most Retirees
Medical care, outpatient services, and doctor visits fall under Part B—and nearly every enrollee pays the standard monthly premium.

2026 Medicare Part B Premium
2025: $185.00
2026: $202.90 (↑ $17.90)

That’s a 9.7% increase, more than 3.5 times the 2026 COLA.

Part B Annual Deductible
2025: $257
2026: $283 (↑ $26)

CMS attributes the increase to:

• Rising healthcare utilization
• Price changes in physician services
• Adjustments to skin substitute spending (which, according to CMS, prevented an even larger increase)

Regardless of the cause, the headline remains the same: retirees will once again pay more for Part B coverage. Resident Medicare and IRMAA expert Todd Valles, shared his thoughts on the increase.

“The story of 2026 is simple: Medicare is getting more expensive, and Social Security isn’t keeping up. Part B premiums are rising by nearly 9.5%, Part A cost-sharing by roughly 3.5%, and the COLA is only 2.8%. That gap represents a real reduction in buying power for millions of retirees.”

IRMAA Brackets Continue to Raise Costs

Roughly 8% of Medicare beneficiaries pay IRMAA—the income-related monthly adjustment amount that increases premiums for Parts B and D.

2026 IRMAA Part B Premiums

For individuals earning over $109,000 or couples earning over $218,000, premiums will range from: $284.10/month (first IRMAA bracket) to $689.90/month (highest bracket) This means a high-income couple in the top tier will pay $1,379.80 per month just for Part B—before Part D premiums or IRMAA surcharges.

Part D IRMAA Surcharges Also Increasing

Part D IRMAA ranges from $14.50 to $91.00 per month, depending on income bracket. These amounts are added on top of whatever premium the retiree pays to their Part D or Medicare Advantage plan. Once again, higher-income retirees will feel a compounded effect: Higher Part B premiums + higher Part D IRMAA + higher deductibles. When asked to comment on these updates Todd Valles had this to say:

“IRMAA continues to hit retirees hard. Nationally, Part D premiums will rise over 6% in 2026 and Part D IRMAA surcharges will increase in lockstep. The moment someone crosses the new $109,000 single-filer threshold—or $218,000 for couples—they’re charged an additional $1,148 a year each in Part B and D IRMAA costs. These increases can catch people off guard, especially when even one extra dollar of income pushes them into IRMAA.”

Medicare Cost Increases vs. Social Security COLA: The Growing Imbalance
The 2026 Social Security cost-of-living adjustment (COLA) is 2.8%. That’s a realistic reflection of cooling inflation, but it is not enough to keep pace with rising healthcare costs. Let’s compare the changes head-to-head.

2026 COLA: 2.8% Increase in Social Security Benefits
For a retiree receiving:

• $1,800/month → COLA adds about $50/month
• $2,500/month → COLA adds about $70/month
• $3,200/month → COLA adds about $90/month
• On average, retirees will see $50–$90 more per month.

2026 Medicare Part B Premium Increase: $17.90 Per Month
For most retirees, nearly 40–60% of their COLA increase disappears immediately just from the Part B premium increase. But that’s not the whole picture.

Add the Part D IRMAA Increase (if applicable)
Even the lowest IRMAA bracket adds:

• $14.50/month for Part D
• Total Medicare increase = $32.40/month

That alone eats half or more of the average retiree’s COLA. And deductibles also went up:

1. Part B annual deductible: + $26
2. Part A deductible: + $60
3. SNF coinsurance: + $7.50/day

More cost-sharing means retirees pay more out-of-pocket before Medicare even starts helping.

Real-World Translation: Many Retirees Will See Net Gains Under $20–$30/Month

Here’s the reality:

If Social Security increases by $70/month…
And your Part B premium increases by $17.90/month…
And your Part D plan premium increases by $6–$12/month (typical)…
And your drug costs or service costs increase…

Many retirees will net just $20–$30/month of usable income from the COLA. For millions—especially those on tight budgets—the raise simply does not keep up. This pattern has repeated year after year. Healthcare inflation consistently moves faster than COLA. As a result, retirees experience an annual squeeze on purchasing power.

Why This Imbalance Matters

At NSSA®, we work exclusively in the retirement planning and Social Security education space, and we see firsthand how this imbalance creates:

1. Shrinking Real Income
Even with COLA, retirees lose ground because Medicare consumes a disproportionate share of their annual benefit increase.

2. Higher Healthcare Burden
As deductibles rise, retirees must spend more out-of-pocket before Medicare steps in.

3. Increased Vulnerability for Fixed-Income Households
For many retirees, especially single individuals and widows, even small increases in healthcare costs can destabilize a carefully balanced budget.

4. More IRMAA Exposure
As income thresholds drift upward more slowly than investment income, more retirees inadvertently cross into IRMAA brackets—even if their lifestyle or spending hasn’t changed.

5. Lower Lifetime Purchasing Power
Healthcare inflation is among the fastest-rising household expenses. When Medicare costs rise faster than COLA, retirees lose purchasing power for:

• Groceries
• Transportation
• Utilities
• Home repairs
• Everyday necessities

This isn’t just about numbers—it’s about lifestyle stability.

What Retirees Can Do: Practical Steps to Stay Ahead

The good news is that awareness and planning can make a big difference. Here are some practical steps retirees can take to protect themselves from the Medicare-COLA squeeze.

1. Understand Your Medicare Options
Choosing between: Original Medicare + Medigap + Part D or Medicare Advantage…has a major effect on your total healthcare cost. Your best choice depends on:

• Travel habits
• Provider preferences
• Expected medical needs
• Predictability vs. flexibility priorities
• Annual review is essential.

2. Review Your Drug Plan Every Fall
Part D plans change yearly—formularies, premiums, and pharmacy tiers.

Shopping your plan annually during the October 15–December 7 window can save hundreds of dollars.

3. Watch for IRMAA Triggers
IRMAA is tied to income from two years prior. The biggest triggers we see:

• Large IRA withdrawals
• Roth conversions
• Capital gains
• Sale of property
• One-time business income
• Mutual fund distributions

Strategic timing can keep you below the thresholds.

4. Manage Taxes with Medicare in Mind
Tax planning is no longer separate from retirement healthcare planning. Smart strategies include:

• Roth conversions before age 63
• Blended withdrawal planning
• Using Qualified Charitable Distributions (QCDs)
• Leveraging tax-efficient portfolios

These can meaningfully reduce IRMAA exposure.

5. Consider Long-Term Care Planning Early
Because Medicare does not cover custodial care, long-term care planning—insurance, hybrid policies, or dedicated savings—helps prevent future financial strain.

NSSA®’s Position: The Medicare–Social Security Disconnect Is Growing

As an organization dedicated to Social Security education and advocacy, NSSA® stresses a critical point: Medicare cost increases are consistently outpacing Social Security COLA adjustments — and 2026 continues this trend. This imbalance:

• Erodes retiree income
• Reduces financial security
• Increases reliance on savings
• Widens the gap between expectations and reality

While Social Security COLA is designed to protect purchasing power, rising Medicare costs undermine that protection. For retirees who depend heavily on Social Security as a core income source, this can create significant stability issues. The 2026 numbers highlight the broader trend: Healthcare inflation remains one of the biggest threats to retirement security.

At NSSA®, our mission is simple: Give advisors and consumers the knowledge they need to make the best possible retirement decisions. We encourage financial professionals, advisors, and retirees to use this information proactively. The earlier you plan, the more control you’ll have over the rising cost of healthcare in retirement.

If you haven’t reviewed your Medicare strategy or Social Security claiming options in the past year, now is the perfect time.