While many older Americans have struggled with the rising cost of living in 2025, an increase in Part B Medicare premiums in 2026 likely won’t make things any easier.
In fact, this increase packs a one-two punch that will not only affect health insurance premiums, but Social Security benefits as well. The Centers for Medicare and Medicaid Services recently announced the monthly cost of Part B coverage would increase from $185 to $202.90 per month, an increase of 9.7%, CNBC reports (1).
This increase is particularly noteworthy because Part B premiums are automatically deducted from Social Security benefit payments. And while the Social Security Administration has set its cost-of-living adjustment (COLA) at 2.8% for 2026, the additional cost of Part B premiums will see many older Americans receiving less of a benefit increase than they likely expected.
Speaking with CNBC, Mary Johnson — an independent Social Security and Medicare analyst — said this marks the second-highest Part B premium increase on record. As Johnson noted, this increase is part of a “continuation in relentless cost increases” for retirees.
As The New York Times noted in November 2025, this increase marks the first time that monthly premiums for Part B coverage will exceed $200. Making matters worse, Part B premiums are now 66% higher than they were just a decade ago (2).
Meanwhile, the annual deductible for the plan is also set to increase from $257 to $283, a 10% increase from 2025. And just like Part B premiums, the deductible has also spiked in the last decade, increasing by 70.5% over that period.
Medicare Part B covers both medically necessary and preventive health care services, while also including coverage for things like ambulances, medical equipment and mental health services (3).
The rising cost for this coverage doesn’t appear to be happening in a vacuum, as health care costs in general are on the rise in the U.S. National health expenditures rose by 8.2% in 2024 (4), and Medicare Advantage plans are now more popular.
Medicare Advantage is an alternative offered by private insurance companies approved by Medicare that bundles Part A and Part B, while adding specific benefits for things like dental, vision and prescription drugs. According to data from a 2024 Medicare Payment Advisory Commission report, Medicare spends about $80 billion more per year for Medicare Advantage than it would if all participants were enrolled in original Medicare (5).
As is often the case, these extra costs are likely being passed on to plan members. According to The New York Times, the average retired worker receives $2,008 each month from Social Security (2). With the added costs for Part B premiums in 2026, this increase will reportedly reduce the COLA for Plan B participants from 2.8% to 1.9%.
“Many people will not receive the COLA they might be anticipating, because the premium eats part of it,” Tricia Neuman, senior vice president of KFF, told The New York Times.
While the increase in Part B premiums is slightly lower than what Medicare Trustees had projected — $21.20 per month (6), which is higher than the $17.90 monthly increase announced for 2026 — it’s important to note that older adults were the only group of people in the U.S. who saw an increase in poverty in 2024 (7).
The Medicare hold-harmless provision prevents the Part B premium increase from cancelling out the Social Security COLA entirely (8), but the higher costs for Part B could still cut into an older American’s buying power and overall quality of life.
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While many Social Security recipients may have to weather the impact of Part B premiums eating more of their monthly benefit payments, there are a few steps they can take to minimize the impact.
Medicare Advantage participants might consider comparing original Medicare coverage vs. the Advantage program to find out what’s best for them, and whether their premiums could decrease if they switched to original coverage (9).
Medicare Savings Programs also cover premiums and out-of-pocket costs for low-income retirees. With these programs, participants will also be automatically enrolled in the Part D Low-Income Subsidy (LIS) program, which offers assistance with Medicare Part D prescription drug plans.
According to the New York Times (2), only 60% of eligible older adults participate in these programs, often because they either don’t know that the programs exist or because they find the enrollment process to be too complex. However, it’s worth asking for help if older Americans are struggling to meet their basic health care expenses.
Retirees can also consider budgeting for their health care costs as part of their annual planning, including expenses like vision or dental services. Planning ahead and keeping a good cushion in an emergency fund can also help with meeting these costs head-on as they arise, even if you’re living on a fixed budget.
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CNBC (1); The New York Times (2); Medicare.gov (3, 9); Centers for Medicare & Medicaid Services (4); Medicare Payment Advisory Commission (5); The Globe and Mail (6); USA Today (7, 8)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
