2.8% is the increase that Social Security will have next year 2026 for the COLA. It is not much, we know, maybe some people expected more money to arrive, but no. And the worst part is that, besides being little money, not all retirees will have the same purchasing power. The SSA announced that the COLA will mean about 56 extra dollars per month for each user, but of course, if the COLA goes up and essential services also go up, the COLA ends up being nothing more than a miserable memory.

And Medicare has announced that it has new premiums in Part B, which will go up a total of 12% over its current price… So, in practice, many people will see a much smaller increase and some, practically none. Very unfair.

A 2.8% COLA

The COLA announcement normally comes out in mid October, but the federal shutdown delayed everything by more than a week. Finally, on October 24 the SSA confirmed that the adjustment for next year would be 2.8% (although it was believed it would be over 3%) calculated as always with the CPI-W, the index that measures how prices rise in the market.

As we were saying, each user will receive approximately 56 dollars more on their base payment, but those same 56 dollars already have a destination long before the retiree sees them…

Medicare raises its prices

The reason why the COLA gets “diluted” is because Medicare basic services are also going up:

In 2025, the monthly premium was 185 dollars.
In 2026, it will rise to 206.50 dollars.
That is 21.50 dollars more that are deducted directly from the Social Security check, and of course… if they raise you 56 dollars and take 21.50 more than usual, the increase is no longer much of an increase.

Part D also goes up

Prescription drug plans, and some Advantage plans, are also adjusting prices upward. Less and less COLA left for users…

Part A, luckily, does not change

Hospitalization continues to be free for most people (thank goodness), but that does not offset the impact of the rest.

Why is Medicare going up so much?

Because inflation is hitting everywhere, and even more so in healthcare, outpatient treatments are increasingly expensive, medications too, and the population is more and more elderly, which means they increasingly need more medical attention… And we live in a capitalist world and, unfortunately, the United States does not have a public healthcare system, so we have to endure the movements of the market and pay the fees they ask of us…

Who will notice it most?

Of course, this is going to hit hardest those retirees who depend 100% on the Social Security check because they have lower incomes, those who have more expensive plans or those who already have chronic illnesses.

For all these users, the COLA will mean nothing.

What you can do before December 7

Well, you can take advantage of the fact that we are in the middle of Medicare open enrollment. Until December 7, beneficiaries can review their plans, compare options, choose something cheaper or with better coverage, it is something you need to take calmly and review with your bills to know if it is worth switching plans or not.

And if the budget is still too tight… consider part time jobs or small additional income, even if it is not ideal at these ages and we would prefer not to have to give this advice…

The COLA should be a relief, but this year’s will go almost entirely to Medicare’s pockets… Right now, the most important thing is to make informed decisions before the end of Medicare enrollment and pay attention to any update from the SSA between now and 2026.