The long-awaited announcement of the Cost of Living Adjustment (COLA) percentage finally arrived on October 24. With a delay of just over a week due to the government shutdown, the Social Security Administration (SSA) announced that the final figure will be 2.8%. This increase will apply equally to all retirees, but it will not be reflected in the same way. This has to do with the cost of Medicare premiums, which will reduce the increase for millions of older adults. Calculated based on the Consumer Price Index (CPI-W), the new 2.8% COLA will translate into an average increase of approximately $56 per month for beneficiaries.
The problem will mainly affect those enrolled in Medicare Part B, which will increase by 12% by 2026. Although Medicare Part A remains free for most retirees, Medicare Advantage or drug coverage (Part D) will also see an increase. As health policy analyst and former Oregon Governor John Kitzhaber explains, the trend is for Medicare costs to continue to rise faster than inflation. It is important to note that the Medicare open enrollment period is ongoing until December 7, so retirees can still review their plans if they deem it necessary.
Cost of Living Adjustment (COLA) for 2026
The Social Security Administration (SSA) has finally announced the COLA percentage for 2026. The announcement was expected to be made on October 15, as it is every year, but due to the government shutdown that has been in effect since October 1, 2025, it was delayed. On October 24, 2025, the final percentage was finally announced at 2.8%. This increase will apply to all retirees, without exception, but not everyone will see it as a real increase due to the rise in Medicare costs.
Medicare premiums
Through data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), it has been possible to calculate the new standard percentage for the year 2026. This percentage, 2.8%, corresponds to an average of about $56 more per month for beneficiaries. This increase will not be felt as such for retirees who need to cover Medicare costs.
- Medicare Part A. They will remain free for almost all beneficiaries, including hospitalization.
- Medicare Part B. Premiums will be automatically deducted from Social Security payments, reducing the actual amount that beneficiaries receive. This part, which covers outpatient medical services, will experience a cost increase in 2026. While in 2025 the monthly premium was $185, a 12% increase is expected in 2026, that is, an increase of $21.50, assuming a monthly premium of $206.50.
- Part D. Also called Medicare Advantage or prescription drug coverage, will also experience an increase in costs, further reducing the benefit for retirees.
According to health policy analyst and former Oregon governor John Kitzhaber, pressure on Medicare premiums will continue to grow as medical costs keep rising faster than overall inflation.
Adjustments for retirees
While it is true that the 2.8% adjustment may provide some relief against the inflation that retirees in the United States are facing, the truth is that not everyone will perceive this increase as a real benefit. It is worth remembering that until December 7, 2025, the Medicare open enrollment period will be ongoing, allowing retirees to switch to more affordable options and more personalized plans if they consider it appropriate. In this situation, experts recommend carefully planning finances, reducing expenses, adjusting the budget, and even seeking part-time employment.
Stay informed about all the news and measures that come along with the new COLA percentage for 2026!