Medicare Advantage Costs Will Cut Into Your Social Security Checks the Most in These States

KEY TAKEAWAYS

• Social Security benefits will rise by 3.6% in 2027, adding about $75 a month for the average retiree.

• The average Medicare Advantage premium will fall next year, but it will rise in 19 states.

• The average Part D deductible for Medicare Advantage plans will rise by about $135 a year.

Social Security beneficiaries are getting their biggest raise since 2023, but in many states, it will be less when it hits their accounts.

The Social Security Administration said last week that benefits will rise 3.6% in 2027 to keep up with inflation. The average monthly retirement benefit will grow by about $75, or $900 a year.

Nationally, average premiums for Medicare Advantage (MA) plans, the private-insurer alternative also known as Medicare Part C, will fall in 2027, the Centers for Medicare & Medicaid Services (CMS) projects. In 19 states, though, they will rise, according to an Investopedia analysis of CMS data.

Why This Matters

Beneficiaries and advocacy groups for older Americans already say the annual COLA has not kept pace with rising expenses. With energy, food, and housing prices also climbing, higher Medicare costs can weigh on retirees.

Next year, the average premium for Medicare Part B (paid by all beneficiaries, including MA enrollees) is projected to increase by $6.60 to $209.50 per month.

Medicare Part B premiums are taken directly from Social Security checks, and beneficiaries can choose to have their MA and Part D premiums deducted from their Social Security benefits. In some states, that will make a bigger dent in benefits than in others.

How Premiums Are Shifting State by State

In most states, premiums for MA plans will be cheaper or grow by less than $5 in 2027.

The average MA enrollee in Wyoming faces the largest premium increase, according to Investopedia’s analysis. The average MA premium there will be nearly $70 a month, about $23 more than in 2026.

MA enrollees with Part D coverage in Wyoming will pay about $24 more a month on average next year. Add the $6.60 Part B increase that every enrollee pays, and Wyoming’s average MA enrollee gives up about 40% of next year’s $75 COLA.

Not everyone faces an increase. In Minnesota, combined average MA and Part D premiums will fall by about $9.

Open enrollment for Medicare plans runs now through Dec. 7.

Read the original article on Investopedia