Understanding the 2026 COLA Increase for SSDI and SSI: A Quick Guide to the COLA Increase

Great news for millions of Americans who rely on Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI): the Social Security Administration (SSA) has announced a 2.8% Cost-of-Living Adjustment (COLA) for 2026. This automatic increase is designed to help beneficiaries keep pace with inflation and preserve the purchasing power of their monthly payments*.

While the headline is encouraging, the real-world impact, especially for those enrolled in Medicare, warrants a closer look.

What Is COLA and How Is It Calculated?

The COLA is not a bonus; it’s a safeguard. Each year, the SSA calculates the COLA based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the third quarter (July–September) compared to the same period in the last year a COLA was applied.

• 2026 COLA: 2.8% increase

• Purpose: To offset inflation and maintain benefit value

• Critique: CPI-W may underrepresent cost increases in housing and health care: key expenses for seniors and disabled individuals

  
  

 Impact on SSDI and SSI Payments

1. Social Security Disability Insurance (SSDI)

• Average Monthly Benefit: Increasing from $1,586 to approximately $1,630

• Substantial Gainful Activity (SGA):

  • Non-blind: $1,690/month (up from $1,620)

  • Blind: $2,830/month (up from $2,700)

These thresholds affect eligibility for disability status and trial work periods.

2. Supplemental Security Income (SSI)

• Federal Maximum Monthly Payment:

  • Individual: $994 (up from $967)

  • Couple: $1,491 (up from $1,450)

• Student Earned Income Exclusion:

  • Monthly limit: $2,410

  • Annual limit: $9,730

• Resource Limits: Unchanged at $2,000 (individual) and $3,000 (couple)

Medicare Part B Premium Offset

While the COLA increases gross benefit amounts, Medicare Part B premiums are deducted directly from SSDI payments, and they’re rising sharply in 2026:

• Estimated Increase: Nearly 12%, pushing the standard Part B premium to approximately $190/month, up from $170.10

• Net Impact: For many SSDI beneficiaries, the $44 COLA increase may be consumed mainly by the $20+ hike in Medicare premiums

Hold Harmless Provision

There is a partial safeguard: the hold harmless rule prevents your Social Security check from decreasing due to a Part B premium hike. However, this protection doesn’t apply to:

• New Medicare enrollees

• Those who pay higher income-related premiums

• Dual eligibles whose premiums are paid by Medicaid

Medicaid and Dual Eligibility

For beneficiaries with low income and limited resources, Medicaid may help offset the rising cost of Medicare premiums:

SSI Recipients

• In most states, SSI recipients are automatically eligible for Medicaid

• Medicaid may cover Medicare Part B premiums, deductibles, and copayments

• This dual coverage significantly reduces out-of-pocket medical costs

SSDI Recipients

• SSDI does not automatically qualify you for Medicaid

• However, if your income is low enough, you may qualify for Medicaid or a Medicare Savings Program (MSP)

• These programs can:

  • Pay your Part B premium

  • Cover cost-sharing (deductibles, coinsurance)

  • Provide full Medicaid benefits in some cases

Dual Eligibility

If you qualify for both Medicare and Medicaid (known as dual eligibility), you may receive:

• Medicare for primary coverage

• Medicaid for supplemental support, including long-term care and prescription costs

This coordination can dramatically reduce your medical expenses and protect your COLA increase from being eroded by rising premiums.

What to Expect and What to Watch For

• SSA Notices: Personalized letters detailing your new benefit amount and Medicare deductions will arrive in December

• No Action Needed: The COLA and premium adjustments are automatic

• Budget Planning: Beneficiaries should factor in the Medicare offset and explore Medicaid eligibility if income is limited

The 2.8% COLA for 2026 is a welcome adjustment, but for SSDI recipients enrolled in Medicare, the net gain may be modest unless Medicaid steps in. SSI recipients, who are often automatically enrolled in Medicaid, will see a more apparent increase. For those with dual eligibility, Medicaid can be a powerful buffer against rising health care costs.\

Examples of how the increases affect payments; not meant to reflect what any specific individual will receive or qualify for.  All claimants must check their individual accounts and amounts for qualifications.  States vary in what they provide and in their requirements. Please check with your state’s Health and Human Resources department.

Questions? We are here to answer any questions you may have related to Social Security Disability or Medicare. Call us today! (833) 438-7734

*This is only a general guide to the COLA increase. Each person and situation may be different. If you have any questions regarding your personal situation, please contact us at (833) 438-7734. We may be able to help. This article doesn’t mean you are entitled to any benefits or resources listed; this is just a general overview and guide. This may not apply to you or anyone you may know.