January is almost around the corner, and millions of Social Security beneficiaries are going to see a small increase in their checks, it is not much, between 2.7% and 2.8% more per month on their annual check. And it will be thanks to the Cost of Living Adjustment (COLA). For example, someone who receives 2,000 dollars will get about 54 extra dollars each month. Sounds good, right? But not all is good news, there has been a record increase in Medicare Part B premiums…
The COLA
The COLA exists as a help so Social Security payments do not fall behind compared to the inflation the country suffers, sometimes it is more money and sometimes less, like this year.
The idea is good and useful, if the price of food, energy or rent goes up, the monthly check should grow too a little to face those increases, don’t? Something like a shield against the loss of purchasing power.
Medicare rises even more
In 2026, Medicare Part B premiums will go up from 185 dollars to 206.50 dollars per month. That is almost 20 dollars more, which means that for many retirees that increase will eat up the entire COLA raise. In some cases, the checks will remain practically the same as before, despite the announcement of an “increase.” And that is very bad news…
What it means for retirees
For those retirees who depend almost entirely on Social Security, the news is a bucket of cold water. The increase¡ (which should give a little oxygen) ends up being nothing because the medical bill keeps growing and there is no way to stop it. And we are not talking about any expense: health, housing and food are the three areas that weigh the most in seniors’ budgets and the three most important for any human being.
Inflation and health: the perfect storm
The big problem here is that inflation improves but very little, and medical services (which are essential services, do not forget that) go up even faster than the rest of goods. And the COLA, as it is designed, does not reflect that real weight of health in the daily life of retirees, remember, the older we get, the more need to spend on health…
The system is outdated, many organizations and many experts say it, so our recommendation is that you do not expect anything from the COLA, try to save as much as possible to be able to face any unforeseen event that may appear…
The debate
Defenders of the COLA assure that without this automatic adjustment, the situation would be much worse. At least the checks do not freeze and go up a little each year.
Critics: they believe that the calculation needs an urgent reform because it does not reflect real medical costs.
What can you do?
As we told you, the best thing is to anticipate and try not to need the COLA (if it keeps coming, it will be welcome), but the best is that you review the budgets taking into account that there may be medical unforeseen events at any time.
You can also consult Medicare assistance programs that can cover part of the premiums or medications, and pay attention to the official COLA announcement that will be made in a couple of weeks to be prepared for 2026.
What is gained on one side is lost almost completely in Medicare. For many retirees, they will hardly notice it. Does the COLA really serve to protect those who depend on these checks, or has the time come to redesign the system? What do you think?