Change #2 Medicare Part B Premiums Offset the COLA Gain

What Changed

While the 2.8% COLA represents a meaningful increase in gross Social Security benefits, a significant portion of that increase is immediately offset by the rise in Medicare Part B premiums — which are automatically deducted from Social Security checks for most Medicare enrollees.

In 2026, the standard monthly Medicare Part B premium increased from $185.00 in 2025 to $202.90 — a jump of $17.90 per month, representing a nearly 10% increase in Part B costs in a single year. The annual Part B deductible also increased, rising from $257 in 2025 to $283 in 2026, an increase of $26.

The math of the offset is straightforward and sobering. The average retired worker’s Social Security check increased by approximately $56 per month due to the 2.8% COLA. But $17.90 of that increase is immediately absorbed by the higher Part B premium, leaving a net effective monthly increase of roughly $38.10. That means nearly 32% of the COLA increase for the average retiree is consumed by the Medicare Part B premium hike before it reaches their bank account.

The IRMAA Surcharge — A Hidden Tax on Higher-Income Retirees

For retirees with higher incomes, the Medicare cost picture is considerably more expensive. The Income-Related Monthly Adjustment Amount (IRMAA) imposes surcharges above the standard Part B premium for individuals whose Modified Adjusted Gross Income (MAGI) exceeds certain thresholds.

In 2026, the IRMAA surcharge kicks in for individuals with MAGI above $109,000 (single filers) and $218,000 (joint filers). Depending on income level, Medicare Part B premiums with IRMAA surcharges can range from $284.10 to $689.90 per month — substantially higher than the standard rate.

Key Insight: The net real-world increase for the average Medicare-enrolled retiree in 2026 is approximately $38.10 per month — not the $56 gross COLA figure. When planning retirement income needs, always calculate Social Security benefits on a net basis after Medicare Part B premiums.