Medicare’s monthly Part B premium will climb above $200 in 2026, potentially cutting into many Social Security recipients’ cost-of-living increase. The Centers for Medicare & Medicaid Services (CMS) set the 2026 Part B premium at $202.90 — a 9.7% rise, $17.90 higher than the current $185 — and the Part B deductible will increase roughly 10%, to $283 from $257. Part B covers doctor visits and outpatient care and is typically deducted automatically from Social Security payments. This is the biggest Part B premium jump since 2022, when it rose 15%.
Experts say the increase outpaces general inflation — roughly three times the inflation rate — driven by rising underlying health care costs and stronger demand for medical services, according to Anne Montgomery of the National Committee to Preserve Social Security and Medicare (NCPSSM) and statements from CMS. NCPSSM leadership warns the boost will strain retirees who depend on Social Security for most or all of their income.
The Social Security Administration set the 2026 cost-of-living adjustment (COLA) at 2.8%, which would increase the average benefit by about $56 to roughly $2,071 per month. But NCPSSM analysis finds the higher Part B premium will absorb about a third of that gain, cutting the effective increase to around 1.9% for many beneficiaries; for people with lower benefits, the net COLA could be effectively zero after the premium deduction.
Rising health care costs are affecting households more broadly. Kaiser Family Foundation data show U.S. households spent an average of $1,514 on out-of-pocket health care in 2023, a 9% real increase from 2020. The premium pressure isn’t limited to Medicare enrollees: roughly 22 million people who buy coverage through Affordable Care Act marketplaces could face large premium hikes if enhanced premium tax credits expire at the end of 2025 — KFF estimates many marketplace enrollees could see costs more than double in 2026 without those credits. Employer-sponsored plan costs are also expected to rise, with most workers likely paying about 6% to 7% more for 2026 coverage, according to Mercer.
Taken together, these trends suggest higher health care costs and rising premiums will squeeze household budgets and reduce the purchasing power of next year’s Social Security increase for many Americans.