Medicare Costs Could Eat Into Your 2027 Social Security Raise

A projected increase in Social Security benefits for 2027 may not all stay in retirees’ pockets. The 2026 Medicare Trustees Report estimates the standard Part B premium will rise from $202.90 in 2026 to $209.50 in 2027, while the annual deductible is projected to increase from $283 to $292. Because many retirees have Part B premiums deducted directly from Social Security, higher Medicare costs can offset part of a COLA.

The Raise, and the Cost That Follows It

Most people on Part B have the premium taken directly out of their Social Security payment, so when the premium rises, it eats into the raise. With the 2027 COLA projected at 3.5 percent, or about $73 a month for the average retiree, the projected $6.60 premium increase would quietly claim a slice of that gain before the higher check ever arrives.

The Surcharge Some Retirees Also Pay

Retirees above certain income levels pay an income-related surcharge, known as IRMAA, on top of the standard premium. It is tied to income from two years earlier, so a one-time bump in 2025 income, from a home sale or a large withdrawal, can raise a 2027 premium regardless of the COLA.

Still a Projection, Not the Final Bill

Both the premium and the deductible are estimates from the Medicare trustees, not official figures. The official 2027 Part B premium and deductible will be announced later this year. Until then, the numbers are a preview, not a locked-in cost.

The Two Numbers to Watch

For a 2027 budget, two figures matter together: the final COLA, expected in October, and the final Part B premium, due later this year. The gap between them is what actually lands in the account.

References: Kiplinger | AARP