Social Security payments aren’t fixed forever. While your initial retirement benefit is calculated based on your earnings history, the actual amount you receive each year is likely to change. Why? Because the cost of living increases over time, and without periodic adjustments, retirees would gradually lose purchasing power.
According to Gallup, nearly 60% of retirees rely heavily on Social Security for their income. This makes it crucial for benefits to keep pace with inflation, ensuring that seniors can continue covering their basic needs.
However, as we move toward 2026, some retirees may notice that their monthly benefits barely increase—or even seem to shrink. Fortunately, there’s a little-known rule built into the system that may protect them.
What Causes Social Security Benefits to Rise?
Each year, the Social Security Administration (SSA) applies a Cost-of-Living Adjustment (COLA) to benefits. This is meant to help retirees maintain their purchasing power as prices rise. The COLA is determined based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), calculated by the Bureau of Labor Statistics (BLS).
The SSA compares the average CPI-W from July to September of the current year to the same period the previous year. If inflation is present, a percentage increase is added to Social Security checks.
Expected COLA for 2026
Early predictions suggest a 2.7% COLA increase for 2026. While this may seem like good news, it’s important to compare this with rising Medicare costs that may eat away at that bump.
How Medicare Part B Impacts Your Check
Most retirees are also enrolled in Medicare Part B, which covers things like doctor appointments and outpatient services. The premium for Part B is automatically deducted from Social Security payments.
In 2026, Medicare Part B premiums are projected to rise by $21.50 per month, from $185.00 to $206.50. This is an 11.6% increase—one of the sharpest jumps in recent years.
If this premium hike surpasses the 2.7% COLA increase, some retirees—especially those with lower benefit amounts—may see their take-home Social Security payments stagnate or even decrease.
The Hold Harmless Provision: A Hidden Safety Net
Thankfully, the Hold Harmless provision exists to prevent seniors from losing money due to rising Medicare premiums.
How It Works
If your COLA increase is not enough to cover the full Medicare premium hike, your Social Security check cannot be reduced. Instead, the SSA temporarily adjusts your Medicare premium downward, ensuring your monthly payment stays the same. Future COLAs may be used to gradually recover the difference—without cutting into your current benefits.
Who Benefits from This Rule?
The Hold Harmless rule applies to most beneficiaries, particularly those who:
- Were enrolled in Medicare before 2022
- Pay the standard Medicare premium
- Don’t have their premiums paid by Medicaid or pay extra due to high income
Who Isn’t Protected?
Unfortunately, not all retirees qualify for this protection. The Hold Harmless rule does not cover:
- New Medicare enrollees (starting in 2022 or later)
- Individuals paying Income-Related Monthly Adjustment Amounts (IRMAA)
- Beneficiaries whose premiums are covered by Medicaid
These individuals could see a reduction in their Social Security checks if the Medicare premium hike exceeds the COLA.
What Retirees Can Expect in 2026
With a modest COLA increase expected and Medicare costs climbing significantly, many retirees might not feel any real financial gain in 2026. The rising Part B premiums could consume the entire COLA, leaving little to no increase in actual benefits.
However, retirees who qualify for the Hold Harmless provision can breathe a sigh of relief: their payments will not decrease, even if premiums rise.
As Social Security and Medicare evolve in 2026, understanding how these programs interact becomes even more vital for retirees. While the COLA increase may be modest, the sharp rise in Medicare Part B premiums poses a real threat to monthly income for many.
Fortunately, the Hold Harmless rule acts as a critical buffer for millions of retirees, ensuring their Social Security payments remain stable even in the face of growing medical costs. For seniors on a fixed income, this often-overlooked safeguard can make all the difference in maintaining financial stability.
FAQs
What is the expected Social Security COLA for 2026?
The Cost-of-Living Adjustment (COLA) for 2026 is projected to be 2.7%, based on current inflation estimates.
How much will Medicare Part B premiums increase in 2026?
Part B premiums are expected to rise by $21.50, from $185.00 to $206.50 per month, which is an 11.6% jump.
Who qualifies for the Hold Harmless provision?
Most retirees who were enrolled in Medicare before 2022, pay the standard premium, and aren’t covered by Medicaid or IRMAA are eligible.