Newsletter

SOCIAL SECURITY'S 2027 RAISE: AN EARLY ESTIMATE IS IN

Each summer, before the official number is announced, analysts put out an early estimate of how much Social Security checks will grow the following year. Those estimates have eased a bit recently: the projection back in May was closer to 3.9%, and after June's inflation report came in cooler than expected, the current estimate sits around 3.8%. Either way, it would still be a bigger increase than 2026's 2.8% bump.

The real number isn't finalized until mid-October, once the government has a full quarter of inflation data to work with, so any estimate you see between now and then is still subject to change. For context, an increase in that range would add somewhere around $70 to $80 a month to the average retired worker's check, starting with January 2027 payments.

Here's the part that matters most for Medicare: your Part B premium is usually deducted straight from your Social Security check, and any premium change for 2027 is typically announced around the same time as the COLA. For most people who aren't subject to an income-related surcharge (IRMAA), there's a built-in safeguard called the "hold harmless" provision — it prevents your Part B premium increase from ever being larger than the dollar increase in your Social Security check, so your net payment can't shrink because of a premium hike alone. That protection doesn't extend to higher-income beneficiaries who pay IRMAA surcharges, or to people who are brand-new to Part B — but the gap for new enrollees is only temporary. Hold harmless works by comparing what was deducted from your Social Security check in November and December of one year to what's deducted the next January, so it simply has no baseline to compare against in your first year on Part B. Once you've been enrolled through a full November and December, you're covered by the same protection going forward.

We'll keep you posted once both the COLA and the premium numbers are official — no need to do any math until then.

MEDICARE IS GETTING A REFRESH FOR 2027 — HERE'S WHAT MAY BE COMING

Federal regulators have finalized the rules that will shape next year's Medicare Advantage and Part D drug plans, and a few of the general changes are worth knowing about now. Specific plans cannoty be discussed until marketing for 2027 plans begins October 1

There will be a simpler way to compare plan quality than in prior years. The star rating system that helps you judge one plan against another is being streamlined, so ratings should better reflect what matters to beneficiaries rather than administrative box-checking. Drug coverage is also moving: the annual cap on out-of-pocket prescription costs is rising from $2,100 this year to $2,400 in 2027 — once you hit that cap, you pay nothing more for covered drugs for the rest of the year. Also, drug plan deductibles will be permitted to increase from this year’s maximum of $615 to $700 next year.

(Note: some drug plans have no deductible, whereas others have deductibles for only some drug tiers, and some plans have deductibles which are less than the permitted maximum. The Annual Notice of Change (ANOC) document you receive in September will notify you of any changes in your drug coverage for next year.)

Beyond the rules coming out of Washington, it's worth watching what insurers themselves do with next year's plan designs. CMS ended up finalizing a noticeably bigger payment increase for 2027 than it first proposed, which gives plans some breathing room. But several major carriers have already said funding still isn't where they need it to be — so here's our projection of what we expect heading into the fall:

• HMOs: HMOs have been gaining ground over local PPOs for the past couple of years as insurers tighten networks to manage costs, and that trend will likely continue. PPOs currently make up a little over a third of Medicare Advantage enrollment, and we expect that share to shrink further.

(Note: you'll be notified by your carrier if they terminate your plan for 2027. If this happens, you'll have the opportunity to change to another available plan offered by any carrier, and you'll also be given a guaranteed issue right to change to a Medicare Supplement plan with no medical underwriting. We'll be in contact in early October with any clients we know are affected by a plan termination.)

• Part B premium "giveback" plans: These plans, where the carrier pays some or all your Part B premium, have been expanding — about a third of enrollees have access to one today, up from a fifth just a couple of years ago. This is one benefit we expect insurers to keep growing, since it's an easy way to stay competitive without adding cost elsewhere.

• Supplemental extras: Core benefits like dental, vision, and hearing have stayed stable and should remain widely available. The "nice to have" extras — over-the-counter allowances, meal delivery, transportation, and flex cards — are the most likely to keep shrinking. Insurers have said outright that more trimming is coming in 2027 as they work to hit profit targets.

• Plan availability: We expect some smaller or regional carriers to exit entirely from certain counties or states or even to leave the market entirely. It's worth confirming that your plan, or one you're considering, will still be offered where you live once the 2027 lineup is announced.

None of this changes your current plan today. But insurers will start publishing their actual 2027 plans and pricing this fall, and it's a good reminder not to assume next year's plan will look like this year's. When those details drop, it's worth a quick review together rather than letting your coverage auto-renew on autopilot or for you to lose coverage because your plan has left the market without you taking action to change to another plan.

SCAM SEASON STARTS EARLY — HERE'S HOW TO STAY A STEP AHEAD

As Annual Enrollment approaches each fall, scam calls, texts, and mailers pretending to be from "Medicare" tend to pick up. The good news is that the red flags are easy to spot once you know what to look for.

A few reminders to keep handy: real Medicare will never call you out of the blue asking for your Medicare number, Social Security number, or bank details. Caller ID can be faked to look like a local or government number, so don't trust the name or number on the screen alone. Be wary of anyone offering a "free" gift, gadget, or service in exchange for your Medicare number, and treat unsolicited "$0 plan" pitches that pressure you to decide on the spot as a classic warning sign.

If something feels off, hang up and don't call back the number that rang you. You can always verify directly by calling 1-800-MEDICARE (1-800-633-4227) or simply reach out to us at 786-970-0740 — we're glad to be your second call before you give anyone your information.

About Paul Cholak

Paul is a licensed, independent health and life insurance agent and has over forty years of benefits experience and specializes in helping Medicare beneficiaries obtain health insurance. However, he offers a complete array of life and health insurance products to individuals of all ages.

He guides Medicare beneficiaries through the steps of getting insurance and is available to help clients both BEFORE and AFTER they've made their purchase decision.

Disclaimer for Part C and D plans: "We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE (TTY: 1-877-2048) to get information on all your options."

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