As we launch into the fourth quarter of the year, we seniors anxiously await the announcements from Medicare, Social Security and the Bureau of Labor Statistics regarding the changes we will see in our income and expenses for 2026.
What will the cost-of-living increase be? How much more will we have to pay for Part B Medicare coverage? Will our Medicare supplemental coverage change?
Every year I too wait for those questions to be answered. Not only because it affects me personally, but it affects the hundreds of clients I serve as their Medicare agent. Right now, I can only speculate on the answers because several components aren’t completely known yet. But I will tell you what I do know and in my next few columns I will solidify the answers so you will be able to make an educated decision during the Annual Enrollment Period starting in October.
On Sept. 11 the Bureau of Labor Statistics will report the finale inflation numbers before they announce the cost of living (COLA) increase for Social Security for 2026. According to the Senior Citizens League it is currently predicted to be a modest 2.7%. As we all know, inflation has been going up over the last two quarters. So, the 2.7% may be increased if when compared to the third quarter of 2024 the CPI is higher in 2025.
If it stays at 2.7%, based on the average Social Security benefit of $2,005, we should see an increase of $54 per month or $648 annually. Which isn’t much but if we were to get all of that amount it would be alright. But alas that is never the case, is it?
Medicare has announced that on Jan. 1, 2026, there will be an increase in our Part B premium of $21.50, almost a 12% increase from the current $185 to $206.50.
In addition to increases in Part B costs there are additional costs with Medicare Part D prescription drug plans. The standard maximum deductible for Part D plans in 2026 will be $615, a $25 increase from the $590 deductible in 2025. The annual out-of-pocket spending limit (OOP) for Part D prescription drug costs will be $2,100 in 2026, an increase of $100 from the $2,000 limit in 2025.
Starting in 2026, once you reach the $2,100 out-of-pocket maximum, you will pay $0 for covered prescriptions for the rest of the year. Plus, the first10 drugs negotiated under President Biden’s Inflation Reduction Act go into effect on Jan. 1, 2026. Saving thousands of dollars for those on high-priced drugs. If you want to know if your drug is covered, call me for a list.
For 155,000 Michiganders, with approximately 55,000 here in the north, the news isn’t so good. Your Medicare Advantage plan is being eliminated by one of our major health insurance carriers. By CMS rules I can’t tell you which one and what plans until after Oct. 1, which leaves me frustrated and incredibly blue. For you there is no automatic switch from one plan to another plan. You must meet with an agent and make a new decision.
To make matters worse: all those annoying telemarketer calls you’re getting now are going to get worse. Because they will have access to all your information and will descend on you as of Oct. 1. They will tell you they are calling from the company, and you need to change plans. It will be a lie.
You need to be ready for this onslaught. If you do get a call do not answer any questions. Tell them you will be calling your agent or the customer service number on your ID card and then hang up. I’d even go so far as to tell you not to answer any number you do not recognize.
This will be a major disruption for many of you. Our team is preparing for this right now. If you wish to discuss this situation and find a plan that will be affordable and have stability, give me a call now to set up an appointment for after Oct. 1.