Education

More 2026 Medicare Trouble – IRMAA, etc.

Inflation in medicine generally outpaces most other price indices, and 2026 is looking to be no exception. Last week we highlighted the deleterious effect Medicare increases have on Social Security monthly benefit Cost of Living (COLA) increases. In a year of elevated medical inflation, many Social Security recipients find that they will receive no net increase in monthly benefit payment, losing the entire COLA increase to monthly Medicare cost escalation.
We are fortunate in one respect, as the “hold harmless” provision in Social Security prevents net monthly benefits from decreasing. When any monthly retirement benefit increase is smaller than the corresponding Medicare cost increase, Social Security is not allowed to pass along the entire Medicare increase. Rather, it is held in abeyance for future years, and can be applied in a year when the benefit increase would otherwise be positive.
When this condition arises, Social Security is allowed to pick up some or all “suspended” increase(s) from prior years. Again, “hold harmless” restrains application of past unapplied increases at the level where nominal Social Security monthly benefit would otherwise go negative. This process is continued until the entire “suspended” Medicare increase has been eradicated.
Social Security recipients who are also enrolled in Medicare are subject to higher Medicare premiums if their incomes are above a certain threshold. Costs in excess of the Medicare base rate are dubbed IRMAA, for Additional Income-Related Monthly Adjustment Amounts. There are 5 levels of IRMAA surcharges, with the maximum being charged to Medicare recipients earning above $500k for Singles, or $750k for Married Filing Jointly. Recipients whose income puts them in higher IRMAA brackets are not protected by the “hold harmless” clause, and their benefit payments will be reduced by IRMAA.
Like income tax brackets, IRMAA brackets are adjusted for inflation. However, at this writing, Medicare is estimating that IRMAA brackets will be adjusted by only about 1.04% in 2026, supposedly based on the Consumer Price Index for all urban consumers (CPI-U). Our same government, using the same Index, but apparently not the same calculation, is estimating that our current 12-month inflation rate is 2.7%. This system is detrimental to America’s seniors.
Inflation reduces the purchasing power of every American dollar, whether earned in the past or in the current pay period. An unchanged monthly payment, whether from work or from a job, buys less than it bought last month, or in any past month. Over time, inflation erodes our lifestyles. Seniors, especially those on fixed income, are punished for a situation they cannot control.
