2027 COLA vs Medicare Part B: 3.6% raise, projected $209.50 premium

The 2027 cost-of-living adjustment was announced on October 14 at 3.6 percent, and the headlines reported that single percentage. Retirees will not see it in their bank balance. Three deductions stand between the announced COLA and the deposit that actually arrives: the Medicare Part B premium, a rounding rule that always moves against you, and whatever tax withholding you have elected on Form W-4V. The first of those three, and by far the largest, has only a government projection attached to it so far.

The short answer. The COLA is now official: 3.6 percent, announced by the Social Security Administration on October 14 and set out in Federal Register document 2026-21796. The Part B premium is not. The 2026 Medicare Trustees Report projects it will rise to $209.50 a month in 2027, up $6.60 from the current $202.90, and CMS will not publish the real figure until November. Because Part B is deducted directly from the Social Security check, that projected $6.60 comes off the top of the raise before the money ever reaches the bank. Run it against the 3.6 percent from the 2027 COLA tracker, and a $2,000 monthly benefit gets a gross raise of $72.00 — but the deposit would rise by only $65.40, because Medicare would claim $6.60 of it before the math is done.

How much of the COLA Medicare actually claims

The $6.60 premium increase is a flat dollar figure, so it does not scale with your benefit. That single fact means the percentage of your raise that Medicare absorbs depends heavily on how large your check already is. Using the official 3.6 percent COLA and the projected premium increase:

Monthly benefit	COLA raise (3.6%)	Real deposit increase	Absorbed by Part B
$1,200	$43.20	$36.60	15.3%
$2,000	$72.00	$65.40	9.2%
$3,000	$108.00	$101.40	6.1%

The pattern is the whole lesson: the smaller the benefit, the larger the share of the raise that disappears into the Part B premium. A retiree living on $1,200 a month loses roughly a sixth of their announced increase before it touches their account; a retiree on $3,000 loses about a sixteenth. The size of the COLA matters here too. On the 3.4 percent center of our earlier projection, the same $2,000 benefit would have gained $68.00 gross and $61.40 net, with Part B taking 9.7 percent; the official 3.6 percent lifts that to $72.00 gross and $65.40 net. A larger COLA does not just mean a bigger check; it mechanically shrinks the share Medicare takes, because the premium increase stays fixed while the raise grows around it.

The projection has a track record, and it is decent but not exact

It is worth being direct about what $209.50 actually is: a projection published by the Trustees, not a number CMS has set, and every dollar figure on this page that depends on it stays a projection until CMS publishes the premium in November. The same table in the report, Table V.E2, lists $202.90 and $283 for 2026 as historical data — the figures CMS published in the Federal Register on November 19, 2025, not a forecast that came true. The year-ahead forecasts themselves have a mixed record: the 2024 Trustees Report projected $185.00 for 2025, exactly the premium CMS later set, but the 2025 Trustees Report projected $206.50 for 2026, which came in $3.60 above the actual $202.90 CMS later announced. The report itself is candid about this, stating plainly that “these values are estimates, and the actual amounts are likely to be somewhat different as experience emerges.” The honest takeaway is that $209.50 is a serious, government-produced number worth planning around, not a number to treat as final until CMS confirms it in November 2026.

The second deduction: rounding always goes down

Even before Medicare and taxes enter the picture, federal law shaves a few cents off every COLA-adjusted benefit. Under 42 U.S.C. § 415(i), any resulting benefit that is not an even multiple of $0.10 gets rounded down to the next lower dime — never up, and never to the nearest cent. The effect is small on any single check but permanent every month after. A benefit of $1,847.70, increased by the 3.6 percent COLA, comes to $1,914.2172, or $1,914.22 to the cent. The rounding rule drops that to $1,914.20, and the payment itself is then paid in whole dollars, rounded down to $1,914. The few cents lost this way repeat every month until the next adjustment, whatever its size.

The third deduction: whatever withholding you chose

Anyone who filed Form W-4V to have federal taxes withheld from Social Security is applying that percentage — 7, 10, 12, or 22 percent, a fixed menu that works nothing like the W-4P steps a pension uses — to the gross benefit, which means withholding also eats into the COLA increase, not just the base payment. Take a $2,000 benefit with 10 percent withholding elected, under the 3.6 percent COLA and the projected Part B premium. The 2026 deposit works out to $2,000 minus $202.90 in Part B minus $200.00 in withholding, or $1,597.10. The 2027 deposit is $2,072.00 minus $209.50 minus $207.20, or $1,655.30. The real increase in what reaches the bank is $58.20 — noticeably less than the $65.40 a beneficiary with no withholding would see on the identical $2,000 benefit and the identical COLA. Withholding is optional and often sensible for tax planning, but it is one more percentage applied to a bigger number, which means a bigger dollar amount disappears from the raise.

Where hold-harmless does and does not apply

Some readers will recall a legal backstop that is supposed to prevent a Medicare premium hike from ever shrinking a Social Security check. That protection, the hold-harmless provision, only stops the dollar amount of the check from falling — it does not stop Medicare from absorbing most or nearly all of a raise. With the projected $6.60 premium increase and the official 3.6 percent COLA, only benefits below roughly $183 a month ($6.60 divided by 0.036, or $183.33) would even be at risk of triggering the protection. On those numbers almost no one qualifies for hold-harmless in 2027 — the projected premium increase is small enough, and the COLA large enough, that checks rise for nearly every beneficiary, just by less than the headline percentage suggests. The threshold moves if CMS publishes a different premium in November.

What to do with this before November

The COLA is final; the premium is not. The $209.50 figure is a Trustees Report projection, not a CMS announcement — that arrives in November 2026, and the Social Security Administration says the 2027 premium will appear in your my Social Security Message Center from late November. The 2027 COLA tracker shows how the 3.6 percent was built from the CPI-W. With the percentage settled, the practical next question for most beneficiaries is not the raise itself but when it shows up — covered in our guide to the first 2027 COLA payment date. Higher earners should also check whether their income crosses a Medicare surcharge threshold, since the 2027 IRMAA brackets projection adds a separate, income-based premium on top of the standard $209.50 used throughout this analysis. Until CMS confirms the real premium, the net arithmetic here is the best available planning number, built on a Trustees Report table whose year-ahead projection missed by $3.60 last year, after matching CMS exactly the year before that. Part D works on a different calendar: CMS finalized its 2027 benefit parameters in April, a $700 deductible and a $2,400 out-of-pocket cap, so drug-plan costs can already be priced into the same budget (Medicare Part D 2027).

Sources

• Social Security Administration, “Cost-of-Living Increase and Other Determinations for 2027,” Federal Register document 2026-21796.
• Social Security Administration, “Social Security Announces 3.6 Percent Benefit Increase for 2027,” press release, October 14, 2026.
• 2026 Medicare Trustees Report, Table V.E2 (projected 2027 Part B premium and deductible).