In the United States, Social Security beneficiaries, as a result of the modification of the COLA by the Social Security Administration, will see an increase in their monthly payments of 2.7% in 2026. This measure has been taken in order to combat the impact of inflation. On the other hand, the monthly cost of Medicare Part must also be taken into account. Thus, experts such as Mary Johson argue that it would not be news that Part B premiums would cancel out the entire effort of the annual COLA increase, which would somewhat neglect increases in costs related to housing or food.
How much they will receive in increases
Millions of Social Security beneficiaries in the United States could receive a 2.7% increase in 2026, according to the most recent projections based on new inflation data. This adjustment is slightly higher than the previous estimate of 2.5% and is intended to help retirees cope with the rising cost of living.
The latest report shows that prices for things people buy, such as food, transportation and utilities, rose 2.6% in June. If we look at the whole year, prices are up a total of 2.7%, slightly more than the increase seen in May, which was 2.4%.
The Federal Reserve wants prices to rise at most 2% a year to keep the economy stable, but they are now rising more than that. That’s why Social Security makes an adjustment every year called a COLA so that retiree payments go up a little bit and they can continue to buy the same thing. However, that expected increase in payments may not be felt as much because the monthly Medicare Part B premium will also go up quite a bit.
The report reflecting the change in monthly costs
According to a report released in June, the monthly cost will go from $185 to $206.50 in 2026. That means $21.50 more each month, which equates to an increase of 11.6%. This increase would be the largest since 2022, when the premium went up even more, by 14.5%.
Independent Social Security and Medicare policy analyst Mary Johnson warned, “It is not uncommon for Part B premiums to consume much or even all of the annual COLA increase, leaving little extra to cover other major cost increases such as housing or food.”
Who is especially affected by the increase
This especially affects those receiving lower Social Security payments. “If the 2026 COLA is 2.7%, a $21.50 increase in the Part B premium would take the entire adjustment away from those receiving about $800 or less a month,” Johnson added.
In May, 74.269 million people were receiving Social Security benefits, with an average monthly payment of $1,860.64. This group includes retirees, people with disabilities, widowed or survivor beneficiaries and those receiving Supplemental Security Income (SSI).
The Social Security Administration will calculate the final adjustment based on average inflation rates from July through September, so data from the next few months will be key to confirming the increase.
2026 COLA increase would be diluted by Medicare increase
These calculations allow for estimates for the following year that point to a 2.7% increase in benefits, higher than the 2.5% that was projected; however, the increase could be diluted in the face of rising Medicare medical premiums, according to information from USA Today.
By 2026, the Medicare Part B premium will increase from the current $185 to $206.50, an increase of $21.50 per month or 11% more. This is the largest increase since 2022, when it went up 14.5%, so the estimated 2.7% increase in the COLA would be automatically deducted for Medicare beneficiaries, who would see it reflected in their monthly checks.
Lower income beneficiaries would see no change.
According to independent Social Security and Medicare policy analyst Mary Johnson, if the COLA increases by 2.7% and Part B increases by $21.50, beneficiaries receiving about $800 or less would see no difference.
This increase also includes retired, spousal and widowed beneficiaries who on average receive a monthly benefit of $860.64.