Millions Face Medicare Part B Premium Hikes Eroding Social Security Gains

Social Security and Medicare beneficiaries are facing significant financial challenges due to rising costs and government measures to address funding shortfalls. The Social Security Administration is increasing efforts to recover overpayments, which could result in benefit reductions of up to 50% for affected retirees, potentially impacting about 2 million people and saving $7 billion over the next decade amid a $67 billion shortfall. Meanwhile, Medicare Part B premiums are projected to rise sharply, with an 11.6% increase to $206.50 per month in 2026, the largest in recent years, which may consume the entirety of the expected 2.7% Social Security cost-of-living adjustment (COLA) for many beneficiaries, especially those with lower benefits. Additionally, higher-income retirees are increasingly subject to steep Medicare Part B premium surcharges under IRMAA, with the number of affected individuals expected to grow from 5.1 million to 8.6 million by 2034 due to unindexed income thresholds and increased retirement distributions. Medicare Part D enrollment remains stable despite premium increases, with a new $2,000 out-of-pocket cap implemented in 2025, though low-income subsidy enrollment has declined following Medicaid disenrollment. Collectively, these developments highlight the growing financial strain on retirees as healthcare and social program costs escalate faster than benefit increases.