The Social Security Administration announced a 2.8 percent cost-of-living adjustment for 2026, raising the average retired worker's monthly benefit from $2,015 to $2,071, an increase of about $56. For most beneficiaries, that raise arrived smaller than advertised. The standard Medicare Part B premium rose $17.90 in the same year, from $185.00 to $202.90, and for the majority of enrollees who have Part B premiums deducted directly from their Social Security payment, that increase comes out before the rest of the raise ever reaches their bank account.
The Net Math
| Line Item | Monthly Amount |
|---|---|
| 2025 average retirement benefit | $2,015 |
| 2026 COLA increase (2.8%) | +$56 |
| 2026 average benefit before Medicare is deducted | $2,071 |
| 2026 Part B premium increase | -$17.90 |
| Net increase after the Part B deduction | +$38.10 |
On average, close to a third of this year's COLA went straight to the Part B premium increase, before any other deduction such as a Part D premium, Medigap premium, or tax withholding is applied. This is not a one-year fluke. It happens most years, because the Part B premium is set to cover projected Medicare Part B spending, which has consistently grown faster than the CPI-W index the Social Security Administration uses to calculate the COLA.
Why Part B Tends to Outpace the COLA
The COLA measures general consumer price inflation for urban wage earners: groceries, gas, rent, and similar everyday costs. The Part B premium is calculated differently. Each year, CMS sets the premium to cover roughly 25 percent of projected Part B program costs, which are driven by physician and outpatient utilization, new treatments and technologies, and prescription drugs covered under Part B. Healthcare cost growth has outpaced general inflation for years, so the premium side of the equation tends to rise faster than the income side, even in a year like 2026 where the COLA itself is a fairly typical 2.8 percent.
When the Hold Harmless Rule Would Actually Matter
Many Medicare enrollees have heard of the Hold Harmless rule and assume it caps their Part B increase every year. It does not work that way. The rule only protects existing beneficiaries from a situation where their net Social Security check would go down year over year because of a Part B increase. In 2026, the 2.8 percent COLA is worth far more in dollar terms than the Part B increase, so the net check still rises for nearly everyone, which means Hold Harmless is not doing any work this year. The rule becomes relevant in years when the COLA is very small or zero, which has happened three times since 2010. It is worth understanding for that reason, but 2026 is not one of those years.
If Your Income Was Higher in 2024 Than It Is Now
Higher-income enrollees pay an additional surcharge on top of the standard Part B premium, called the income-related monthly adjustment amount (IRMAA). The 2026 IRMAA calculation is based on 2024 tax return income, a two-year lookback. That lag creates a specific, common problem: if you were still working in 2024 and have since retired, or you had a one-time income spike from a home sale, a large retirement account withdrawal, or a Roth conversion, your 2026 premium may reflect income you no longer have.
The Social Security Administration allows an appeal for exactly this situation, using Form SSA-44, formally called a Medicare Income-Related Monthly Adjustment Amount Life-Changing Event request. Qualifying events include retirement or work reduction, marriage, divorce, death of a spouse, and loss of income-producing property. If one of these applies to you, filing SSA-44 with documentation of your current income can result in Social Security using your more recent income instead of your 2024 return, which can reduce or eliminate the surcharge. You generally have 60 days from the date of an IRMAA determination notice to request an appeal, though a life-changing event request can be filed at any time the circumstances apply.
What to Check on Your Own Statement
Three things are worth verifying once your first 2026 payments have arrived:
- The gross benefit amount matches the 2.8 percent COLA figure in the notice the Social Security Administration sent in November or December 2025, available in the Message Center of a my Social Security account.
- The Part B deduction reflects $202.90 for most enrollees, or the correct IRMAA-adjusted amount if a surcharge applies. This should be listed separately from the net deposit amount in the same notice.
- Any Part D or Medicare Advantage premium changes, which are separate from Part B and are not covered by the COLA notice at all. These are set by individual plans and can change every year during open enrollment.
If the numbers on an actual deposit do not match the notice, the Social Security Administration recommends calling 1-800-772-1213 rather than waiting for the discrepancy to resolve on its own.
Planning Around It Next Year
The relationship between the COLA and the Part B premium is not something an individual beneficiary can control, but it is predictable enough to plan around. Since the Part B premium has risen in nearly every year of the program's history, and has grown faster than the COLA in most of them, a reasonable planning assumption is that somewhere between a quarter and a third of any given year's raise will go to Medicare before it reaches a bank account. Building that expectation into a retirement budget avoids the annual surprise of a COLA that sounded larger in the press release than it turned out to be on the actual deposit.