Medicare’s 2026 spending jump puts pressure on Social Security’s budget

• Medicare Part B costs increased significantly in 2026.

• Social Security’s modest cost of living arrangements is not enough to absorb it.

• Seniors who rely on Social Security for income alone may be hit hard right now.

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For retirees on Social Security, one of the biggest expenses they face each year is health care. And the tough thing is that health care costs can be largely unaffordable.

If you need a hospital stay or some medication, you can’t easily say “no thanks”. So it’s important to budget for medical expenses, especially if you receive most or all of your retirement income from Social Security.

But in recent years, Social Security recipients have been saddled with rising health care costs. And this year is no exception.

Right now, Medicare premium increases are hitting retirees left and right. And it’s not a problem that’s likely to go away anytime soon.

Most Medicare enrollees do not pay premiums for Part A, which covers hospital care. But there is a monthly premium to pay for Part B, which covers outpatient care.

This year, the standard monthly Part B premium increased from $185 to $202.90. And that $17.90 increase is hitting hard for many seniors.

In 2026, Social Security benefits received a cost-of-living adjustment (COLA) of 2.8%. For the average recipient, this should amount to an additional $56 per month.

But because the cost of Medicare Part B has gone up so much, Social Security recipients are basically losing a third of their COLA just for premium increases.

And it’s not just Medicare premiums that are more expensive this year. The annual deductible for Medicare Part B increases from $257 in 2025 to $283 in 2026.

This may not seem like such a big deal. But remember, on top of premium increases and higher deductibles, many seniors on Social Security may see larger health care bills based on changes to their special medical benefits or Part D drug plans. And again, many of these costs may be non-negotiable.

Because health care costs, including Medicare, tend to increase from year to year, it’s best to have income outside of Social Security to pay for them.

The reality is that health care costs exceed the program’s annual COLAs. So the best way to save is to have other income to rely on.

This income can come from savings, a part-time job, or something else. But it’s important to recognize that when it comes to rising health care costs, Social Security does a poor job of keeping up.

Just as it’s important to have non-Social Security income at your disposal, it’s also important to reduce your medical expenses if you can.

The cost of Part B may not be negotiable. but you can Shop around for a new Part D or Medicare Advantage plan each year during open enrollment. As your needs change, or as plan costs change, switching plans is a good way to limit your health-related costs.

Also, don’t take the financial benefits of taking good care of your health for granted. A doctor-approved diet and exercise routine can help you avoid expensive treatments that eat into your retirement income and cause you a world of stress.

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