How Medicare Premiums Can Shrink Your Social Security Check

Social Security checks will go up by 3.6% in 2027 due to the cost-of-living adjustment (COLA). But keep in mind that Medicare premiums eat away at your checks, too.

While your check can’t be lowered when premiums increase under the hold harmless rule, there is an exception for high earners. Here’s what you need to know.

---

Must Read

• You’re probably eligible to save money on car insurance. Compare rates for your ZIP code with this free — and fast — tool from Money.
• These 6 hacks can help seniors save money on things they’re already buying.
• Meet your financial goals faster: Take this free, no-obligation quiz to get matched with an advisor today.

---

How the deduction works

Part B premiums come straight out of your Social Security check, and the 2026 standard premium was $202.90 per month.

While there is a rule that protects most people from a decrease in their Social Security benefits due to Medicare premiums, the premium hike can still catch people by surprise. If you are not collecting Social Security yet, Medicare will send you a quarterly bill that you must pay directly online or by mail.

The 2027 projection math

Thanks to COLA, the average benefit is projected to rise about $75, from $2,095 to $2,170, next year. If Part B rises to the projected $209.50, then an extra $6.60 of your benefits will go toward Medicare. It’s a sizable gap that is intended to leave retirees ahead. However, the COLA boost is based on inflation, so it’s still smart to monitor if your checks keep up with rising costs.

The gap becomes more pronounced for people with higher Social Security benefits. The standard Medicare Part B premium is the same for most beneficiaries, but higher-income beneficiaries pay additional amounts based on their income. For instance, someone who receives $4,000 per month in Social Security will see their benefit go up by $144 per month, while Medicare Part B still only goes up by $6.60 per month.

The hold-harmless rule

The hold-harmless rule prevents eligible beneficiaries’ Medicare Part B premium increases from rising higher than the dollar amount of their annual Social Security COLA. If their benefits go up by $50, Medicare Part B premiums can’t go up by more than $50. That keeps most people safe from rising Medicare costs reducing their government checks.

But people who are paying higher premiums because of their high income are often exceptions to the rule. New enrollees also aren’t typically protected in their first year.

Part D and Advantage plans

While Part B has the larger premium, you can also see Part D and Medicare Advantage premiums deducted from your checks. You can also opt to pay your plan provider directly since Part D premiums are not automatically withheld from your Social Security check by default.

You must also request Medicare Advantage premium deductions from your Social Security check since they do not happen automatically. Otherwise, you must pay the Medicare Advantage bills when they arrive.

Part D premiums scale up like Medicare Part B premiums for high earners, but they cap out at an additional $91 per month for the highest earnings threshold.

Check your Social Security benefits letter in December. That letter will contain the exact net amount of your monthly benefits after accounting for Medicare premiums. It gives you a complete snapshot of your cash flow. Tallying up your expenses leading up to that letter can help you decide what adjustments should be made to your budget if necessary.

---

Never miss a Money story.

• Join 700,000+ readers who get the latest financial news and advice delivered daily for free. Subscribe to our newsletters.

---