Medicare Expenses Increase Faster Than Social Security's 2.8% COLA, Raising Concerns Among Seniors

On October 24, 2025, the Social Security Administration (SSA) revealed that the cost-of-living adjustment (COLA) for 2026 will be

, offering a slight increase to the 75 million people who rely on the program. This adjustment means retirees will see an , raising the typical benefit from $2,015 in 2025 to $2,071. Although this marks the fifth year in a row with at least a 2.5% bump—a trend not seen since the early 1990s—the change has faced significant criticism for not keeping up with inflation and escalating healthcare expenses.

The 2.8% COLA is determined by the

, which showed a 2.9% annual rise in prices through August 2025. Yet, many experts believe CPI-W does not truly reflect the costs seniors face, especially for healthcare and housing. The index gives more weight to expenses like transportation and food, while underestimating the impact of rising medical costs that now take up a larger portion of retirees’ budgets.

For a lot of older adults, the benefit of the COLA is further diminished by sharp hikes in Medicare premiums. The standard

is expected to jump by 11.6% in 2026, increasing from $185 to $206.50 per month, according to the Centers for Medicare & Medicaid Services. For some, this premium hike could completely offset any COLA gains. "For many seniors in 2026, higher Medicare premiums could wipe out the entire COLA," said Mary Johnson, an independent analyst specializing in Social Security and Medicare policy.

This disconnect is echoed in public opinion. A recent

showed that 77% of older adults feel the 2.8% increase is not enough to keep up with rising expenses. Three out of four respondents said they would need at least a 5% adjustment to maintain their current standard of living. Gina Seibert, CFO of PSECU, pointed out that even minor shortfalls force retirees to reduce spending on basics like food and housing or dip into their savings earlier than planned.

The SSA’s update also brought attention to deeper financial issues facing Social Security. The June 2025

, which oversees the program’s funding, predicts insolvency by 2034. At that point, unless Congress intervenes, only 81% of promised benefits could be paid. The report attributes the shortfall to demographic changes and falling birth rates. Additionally, recent tax changes under the Trump administration, such as the One Big Beautiful Bill Act, have sparked worries about speeding up insolvency by reducing revenue from benefit taxes.

Advocates have long called for changes to how COLA is calculated, suggesting the use of the Consumer Price Index for the Elderly (CPI-E), which better matches seniors’ actual spending. The

(NCOA) stressed that the current COLA "falls far short for older Americans, who already face high healthcare costs and will see even greater Medicare expenses in 2026."

The 2026 COLA announcement also came during a federal government shutdown, which delayed key data from the Bureau of Labor Statistics. Although the SSA released the adjustment as planned, the situation highlighted the system’s vulnerabilities. Commissioner Frank J. Bisignano said the COLA "ensures benefits are in line with today’s economic conditions," but critics argue that the program’s long-term stability is still unresolved.

As the January 2026 implementation of the COLA approaches, many retirees are left facing the reality that these modest increases may not be enough to ease their financial burdens. With inflation continuing and healthcare costs rising, the debate over how to better tailor Social Security adjustments to seniors’ needs is expected to grow more urgent.

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