Social Security Just Got a 2027 COLA - Here's What Medicare Will Cost You on Top of It

Social Security recipients have a 3.6% raise coming in 2027, worth about $75 more a month for the average retiree. That's good news, especially with everyday expenses still climbing, although higher Medicare premiums could take away some of that extra income.

The 2027 Medicare Part B premium hasn't been announced yet, so it's still unclear how much of your raise you'll get to keep. Here's what the latest estimates suggest about your Medicare costs and how you can maximize your senior benefits in the year ahead.

The difference between your COLA and your monthly deposit

The COLA raises your gross benefit, the amount before anything is deducted. If you're enrolled in Medicare Part B, your monthly premium is usually taken directly from that amount, which means the money deposited into your bank account may be less than your full benefit.

For example, if your COLA adds $75 a month but your Medicare premium increases by $15, you'd have just $60 more to spend each month. That's still an extra $720 over the year, although it's less than the $900 your full raise would provide.

How a smaller Part B increase could benefit retirees in 2027

Medicare Part B premiums rose by $17.90 in 2026, bringing the standard monthly cost to $202.90. Retirees could get some relief in 2027, though, with the Medicare Trustees projecting a much smaller increase of $6.60, bringing the premium to about $209.50 a month.

For someone receiving the average $75 Social Security raise, the higher premium would leave about $68.40 extra each month, or roughly $821 over the year. That's more than 90% of your COLA available to spend on other expenses, assuming your Medicare costs follow the projection.

How much of your Social Security raise Medicare takes each year

Medicare hasn't always left retirees with such a large share of their annual raise. In 2026, Part B premiums used up nearly a third of a $56 Social Security increase. The previous two years also saw retirees lose part of their COLAs to higher premiums.

Here's how the numbers compare:

The 2027 projection would take under 10%, so between a larger COLA and a smaller premium increase, this is the most a typical retiree has kept from a raise in years. Your own increase will depend on your Social Security benefit and Medicare costs, so these examples won't match everyone's payments.

The Medicare rule that helps protect you from a smaller check

Medicare has a rule that protects many retirees from receiving a smaller Social Security check when Part B premiums increase. Known as the hold-harmless rule, it limits how much your Part B premium can rise if the increase would otherwise be larger than your Social Security COLA.

For example, if your Social Security benefit increases by $10 a month but your Part B premium is set to rise by $15, the rule generally limits your premium increase to $10.

However, the rule doesn't guarantee that you'll keep your entire raise. If your COLA adds $75 and your Part B premium goes up by the projected $6.60 in 2027, you'd still pay the extra $6.60 because your raise is large enough to cover it.

The Medicare Trustees estimate that roughly 70% of Part B enrollees qualify for this protection, although eligibility depends on how you pay your premiums and whether you meet the rule's requirements.

Higher-income retirees could pay more for Medicare in 2027

Retirees with higher incomes face a different Medicare calculation because they may have to pay extra premiums that aren't covered by the hold-harmless rule.

In 2026, the standard Part B premium applies to individuals with incomes of $109,000 or less and married couples filing jointly with incomes of $218,000 or less.

Above those limits, Medicare charges an extra amount called IRMAA, which stands for Income-Related Monthly Adjustment Amount. This surcharge can increase what you pay for both Part B and Part D, sometimes by hundreds of dollars a month.

Since Medicare generally uses your tax return from two years earlier, your 2025 income will usually determine whether you owe these extra charges in 2027. The income thresholds will also be updated, so checking your bracket will give you a better idea of what Medicare could cost you next year.

Bottom line

Your 2027 Social Security raise could go a little further than recent increases, with Medicare expected to take a smaller share. If the Trustees' estimate holds, the average retiree could have about $68 more in their pocket each month, adding up to more than $800 over the year.

Before you decide where that extra money will go, check your updated Social Security payment once Medicare premiums are confirmed. It's a small bit of planning that can help you avoid money mistakes and make your Social Security raise go further.

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