Inflation has been tamed, although not quite all the way to the 2.0% annual target set by Federal Reserve (FED) Chairman Powell. Concurrently, government is approaching the September 30 end of Fiscal Year 2025. Now is the season when various prognosticators are busy estimating Cost of Living Adjustments (COLAs) for various and sundry programs administered at the Federal level.

For years, I have argued that there should be one, and only one, annual rate of inflation, with consequent COLAs. My pleas consistently fall on deaf ears, and varying COLAs continue to be applied by Congress, the IRS, Medicare, and various operating departments and agencies. Somehow, taxpayers seem to get shorted in the process, and next year is shaping up to be no exception.

Social Security and Medicare are irrevocably intertwined, as Social Security recipients have their Medicare Part B (and Part D, if applicable) premiums deducted from monthly benefit payments. COLA estimates for 2026 are looking minimal, beginning with an estimated 2.7% increase in Social Security monthly benefits. Today’s average Social Security payment is $2,002.39. Applying a 2.7% COLA would increase the average benefit to $2,056.45, an increase of $54.06.

Medicare cost projections have raced ahead of the reported 2.7% inflation rate, and are estimated to increase by 11.6% for 2026. From the current Part B monthly premium of $185.00, an 11.6% increase would add $21.46, arriving at a monthly cost of $206.46. The Net result for an average Social Security recipient would be a monthly increase of only $32.60, or 2.0%. Once again, we Senior Citizens (appear to) get slighted, incrementally reducing our purchasing power.

For lower-income Americans, whose Social Security Benefit payments are closer to $1,000/month, the Medicare Part B monthly premium adjustment is the same number of dollars ($21.46). However, the economic impact is far greater for these people, and the net loss to them is irreplaceable. But it doesn’t end there. For enrollees in the Medicare Part D Drug Plan, the estimated cost increase is 6%, again much higher than the 2.7% anticipated benefit increase. We lose again.

Wait, we’re not done yet. How about throwing at us another $100/year in out-of-pocket deductible costs, applied before any Medicare coverages kicks in? Somehow, that extra expenditure evades news purveyors, both in government and media. Quietly, it increases Americans’ costs and reduces our lifestyles.

“One step forward, two steps back” comes to mind. In the modern era of communications, lies abound, and none are so egregious as Lies of Omission. What we are not told far outweighs that which we hear about daily. The economic squeeze Americans have been experiencing for decades continues to erode our living standards. How can we reverse that?

Next week, we’ll tackle IRMAA adjustments, and it doesn’t get better.