"When Social Security announced its 2026 cost-of-living adjustment, many retirees expected meaningful relief from inflation. Instead, Medicare Part B premiums jumped by $17.90 per month, consuming much of the increase before retirees saw any benefit. This pattern of healthcare costs rising faster than income adjustments creates a persistent squeeze on fixed-income households. This disconnect surprises people because both adjustments happen simultaneously each January, yet they measure fundamentally different economic forces."
"Medicare premiums track healthcare inflation, not the broader Consumer Price Index that determines Social Security COLAs. Medical care costs consistently outpace general inflation due to expensive new treatments, an aging population requiring more services, and rising prescription drug prices. Medicare premiums rise to cover projected healthcare spending, including physician services and medical equipment costs. Administrative intervention helped contain the 2026 increase-without action to curb spending on certain treatments, retirees would have faced an even steeper jump."
Medicare Part B premium increases can consume a large share of Social Security cost-of-living adjustments, leaving retirees with little or no real gain. Social Security COLAs are based on past general inflation, while Medicare premiums are set to cover projected healthcare spending for the coming year. Medical costs routinely outpace the Consumer Price Index because of costly new treatments, an aging population, and rising drug prices. Medicare premiums therefore rise to cover anticipated physician services and equipment costs. Administrative actions can temper premium growth, but the structural mismatch still erodes purchasing power for beneficiaries reliant on fixed incomes.
Read at 24/7 Wall St.
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