Costco CEO W. Craig Jelinek tells a story that I love because it captures the company’s commitment to its culture and customers. Here’s how he recalls it in a New Yorker profile of Costco published last year:

At a 2018 luncheon, W. Craig Jelinek, who took over as C.E.O. in 2012, told a story about a stalwart Costco food-court deal: the dollar-fifty hot-dog-and-soda combo. Concerned about its economics, he’d approached [Jim] Sinegal, who was then his boss. “We are losing our rear ends,” Jelinek recalled telling him. “And he said, ‘If you raise the effing hot dog, I will kill you. Figure it out.’ ”

The anecdote reflects Costco’s laser focus on providing value and a square deal to its customers. So I was surprised when news broke this week that Costco hopes to start selling Medicare Advantage plans in three states in partnership with SCAN Group, a nonprofit Advantage plan provider. According to the Wall Street Journal, the retailer will first test Advantage plan sales in several markets; it also will test sales of Medigap supplemental plans, which are used to limit out-of-pocket exposure for enrollees in traditional Medicare.

This is not a new marketing idea - lots of retail chains peddle Advantage plans in their stores. But the prospect of Advantage plan marketing in Costco warehouses is especially worrying because of the trust customers (myself included) place in this company.

Medicare Advantage plans are money machines. They generate billions in profit by optimizing the amounts they can jack out of the government by taking advantage of several features of the Medicare payment system:

• Risk adjustment: Plans get paid more when they document diagnoses that increase their enrollees’ risk scores. The practice is legitimate when it accurately reflects a patient’s health, but aggressive or unsupported coding can increase payments without a corresponding increase in care.

• Favorable selection: These are marketing and plan-design effects that can result in plans attracting healthier-than-average beneficiaries, who may cost less than their risk scores would predict.

• The plans also are paid “rebates” when their bids come in below Medicare’s local benchmark..

• Quality ratings: Plans can use strategies to maximize their scores in the government’s “star rating” system, which can affect their payments and rebates.

The other key profit strategy is to control tightly the amount of care that is delivered to patients. The technical term is “utilization management,” and it finds its way to patients through techniques like “prior authorization” and outright restrictions or denial of care. These problems are most likely to surface for patients as they get older and sicker - not when they’re first signing up for Medicare and are hooked by extra Advantage goodies like gym memberships.

These are all the reasons that I find Costco’s decision to market Medicare Advantage particularly troubling.

I’m imagining walking down the aisles where approved vendors are selling cell phone plans, vacations and snack samples. It’s an environment where the consumer expects a square deal - and Medicare Advantage is not that.

Perhaps Costco will be able to explain why this offering is good for its customers. Here’s what a spokesman told the WSJ:

Richard Stephens, senior vice president for pharmacy at Costco, said the retailer has seen older people struggle with their coverage at the pharmacy counter.

Costco members “know that if they buy something from Costco, it has been vetted, and we feel it’s the best thing in the category,” he said. “That’s really what we’re trying to do with this particular product.”

The retailer sees the new Medicare effort as a pilot. “We plan to learn a lot from it, and we plan to make sure that we have the right product for our members,” Stephens said.

Costco’s partnership with a nonprofit insurer (SCAN) might suggest that it is looking for a “good guy” offering. But nonprofit status doesn't eliminate the financial incentives built into the Advantage payment system. Nonprofit and for-profit plans alike are paid more when they document higher-risk diagnoses and have incentives to control the cost of care.

Costco should be looking carefully at SCAN’s current risk-adjustment coding intensity, and how that compares with other insurers. It should also scrutinize SCAN’s prior-authorization and denial of care practices - and the percentage of denials that are overturned on appeal. Costco also should disclose those performance metrics to its members when it markets the plans.

Even better, just drop this idea. Mr. Jelinek, remember the $1.50 hot dog!

Up next: Medicare annual enrollment

It’s always a good idea to re-shop your Medicare coverage during the annual fall enrollment period - but that will be especially true this fall.

If you are enrolled in Medicare Part A and B, there is no need to revisit that coverage during the annual enrollment period that runs from Oct. 15 through Dec. 7. But it can pay to re-shop Part D prescription drug or Medicare Advantage coverage.

Keep an eye out for your annual notice of change (ANOC), which plans must send to you in September. The ANOC might come via snail mail, or it could be sent electronically. The ANOC details changes in coverage and costs that take effect in January.

There could be quite a bit of change for 2027. In the Part D market, the Trump administration decided to end (one year ahead of schedule) to end a government program that helped limit premium increases for prescription drug plans. That could mean larger premium increases for some enrollees in 2027. Changes in the Medicare Advantage market also could boost the case for shopping, as some insurers pull back from markets or discontinue plans.

There also is a change related to Medicare’s expanding coverage of GLP-1 drugs.

The Bridge pilot program for obesity coverage continues through 2027 — but there’s a new wrinkle. One GLP-1 drug, Wegovy, was among the drugs included in the second round of drug price negotiations between Medicare and drugmakers. Its negotiated price will take effect in 2027, and federal law requires Part D plans to include selected drugs such as Wegovy on their formularies for covered Part D uses. Wegovy can be covered under Part D for its cardiovascular indication, while the Medicare GLP-1 Bridge provides separate coverage for eligible beneficiaries using Wegovy and certain other GLP-1 drugs for weight management. People whose prescriptions are for a Part D-covered indication are not eligible to use the Bridge for that prescription.

Confusing enough for you? Me too. I’ll do my best to sort it all out in an article about annual enrollment this fall.

What I’m reading

Start-up insiders stashed huge sums in IRAs . . . The deadliest room in the house, especially for seniors . . . The man who runs Social Security spied on colleagues when he worked at J.P. Morgan Chase . . . Retirement communities grapple with labor shortages amidst Trump’s immigration crackdown . . . Florida home care agencies shutter as Haitian workers disappear . . . Boomers were supposed to downsize, but they’re buying bigger homes instead . . .Why aging might be a program, not a breakdown . . .Why do some dementia patients “return” just before they die?

You’ll often hear politicians promise to “protect” Social Security.

Right now, the most important problem facing the program is the trustees’ projection that the combined retirement and disability trust funds will be exhausted in 2034. Unless Congress acts, Social Security will only have sufficient funds to pay about three-quarters of scheduled benefits because the program has no legal authority to borrow money to close its funding gap.

That’s why an email blast sent just before the July 4 weekend by Social Security Commissioner Frank Bisignano caught my eye. He assures Americans that the Trump administration is “protecting Social Security” while promoting the administration’s tax legislation and touting the agency’s customer service.

Americans don’t expect the Social Security Administration to advocate for one political party or another. They do expect it to provide accurate, nonpartisan information about the program on which millions of Americans depend. That’s why the gaslighting claims made in Bisignano’s July 3 email, titled “Making Life More Affordable for America’s Seniors,” deserve a careful fact-check. Let’s examine a few of his claims.

Claim #1: “President Donald J. Trump and the Trump Administration are not only protecting Social Security, but we are providing meaningful and immediate relief to older Americans who have spent decades contributing to our nation’s economy.”

Fact: The Trump administration has no meaningful plan to avert benefit cuts in 2034. President Trump has repeatedly promised not to “touch” Social Security - but absent congressional action, those cuts will occur automatically. Trump has said he opposes cutting benefits or raising payroll taxes, arguing instead that economic growth and anti-fraud efforts will solve the problem. Here’s what he said just last month:

“And I think we have a chance to save Social Security without doing anything to it, by just the numbers of fraudulent people on Social Security — people that are 115 years old, 125 years old, getting payments.”

The “dead people” myth has been thoroughly debunked. It was only a “problem” on paper because no 125-year-olds were actually receiving benefits. And In fact, the DOGE project “fixed” the problem by marking people over a certain age as dead in Social Security records.

Nothing the administration has proposed constitutes a serious solution to Social Security’s long-term financing shortfall - and that’s something it actually has a legal obligation to do. Bisignano is one of the Social Security trustees - the others are Trump cabinet members. By law, the trustees are required to put forward a plan of action when the program’s reserves fall below a specified level. Economist Andrew Biggs argues that the most recent trustees report fails to meet that legal obligation.

Claim #2: “Just last year, on July 4, 2025, President Trump signed into law the Working Families Tax Cuts Act. This historic legislation included a tax cut that allows Americans 65 and older to keep more of their hard-earned Social Security benefits. Thanks to President Trump, over 35 million American seniors received an average of $7,500 in relief this tax season.”

Fact: This is what Bisignano means by “immediate relief.” He is referring to the One Big Beautiful Bill Act (OBBBA), which Trump signed into law on July 4, 2025. OBBBA is unpopular with the public, and, incredibly enough, the administration’s response has been a rebranding effort, referring to the law as the “Working Families Tax Cuts Act.” Bisignano’s email uses that made-up name as though it were the law’s actual title.

He then mischaracterizes OBBBA’s “relief” for seniors:

“This historic legislation included a tax cut that allows Americans 65 and older to keep more of their hard-earned Social Security benefits. Thanks to President Trump, over 35 million American seniors received an average of $7,500 in relief this tax season.”

The OBBBA does not exempt Social Security benefits from taxation (e.g., a “tax cut.”) Rather, it created an additional standard deduction for taxpayers age 65 and older, and it did not change the legal formula that determines whether Social Security benefits are taxable. It’s a general income-tax deduction ($6,000 for single filers and $12,000 for married couples filing jointly) that happens to reduce many seniors’ taxable income enough that they owe no tax on their Social Security benefits. But it is not literally a Social Security tax cut. The Tax Policy Center has published a useful correction to these claims.

The 35 million and $7,500 figures appear to come from the U.S. Treasury, but they describe the average deduction claimed—not the average dollar amount of tax savings. A $7,500 deduction reduces taxable income by $7,500. The actual tax savings—the “relief”—would generally be only a fraction of that amount, roughly $750 to $1,650 depending on a taxpayer’s marginal tax bracket, not $7,500. The email conflates the two, making the benefit sound much larger than what most people actually received.

And ironically enough, the OBBBA actually accelerated trust fund depletion by one year. That’s due to the extension and expansion of Trump’s 2017 tax cuts, the expanded senior deduction, and other provisions of the law. That means the law hastens the moment when all beneficiaries will face a possible huge cut in their benefits.

Claim #3: SSA customer service has been turned around. Bisignano writes:

In SSA field offices, we’ve reduced wait times by 30 percent; on the phone, we’ve answered calls 75 percent faster; we’re meeting the needs of seniors in the digital age with 24/7 access to online my Social Security accounts; we’ve increased the number of personal my Social Security accounts to over 100 million users and have processed over 100 million more transactions this year; for disability claimants, we have reduced processing times by 25 percent; and our efforts to prioritize efficiency, streamline our processes, and decrease wait times are saving Americans time while delivering the highest quality service.”

Fact: The specific numbers in the email match those contained in an SSA press release issued last month. But remember that we’re talking about an agency that has lost more than 8,000 workers since the start of 2025, much of that stemming from the Trump administration’s DOGE-driven downsizing. The ensuing customer service chaos has been well-documented. It’s also difficult to verify the agency’s claims because SSA stopped publishing many of its performance metrics shortly after Bisignano became commissioner last year.

As Kathleen Romig of the Center on Budget and Policy Priorities notes:

SSA restored the public release of some of those measures over time, but certain key metrics have remained unreported. For example, SSA no longer shares how long callers to the 800 number wait on hold or for a call to be returned, how long it takes applicants to get an appointment, or how many unfulfilled requests languish in the processing backlog.

The metrics that are still posted can also be misleading. For example, the average speed of answer doesn’t include how long people wait for a callback, thereby dramatically underestimating how long they actually wait to reach an agent.

SSA’s lack of transparency and gaslighting does the agency no favors, particularly as its leadership claims the agency is “working better and faster than ever.” Those assertions are readily undercut by press reports documenting customer-service problems and processing strains. Phone wait times appear to be much longer than publicly advertised; lengthy waits for appointments particularly harm widows and children who have lost parents; local offices often struggle to operate with shrinking staffs; and record-high processing backlogs are delaying needed assistance.

Gaslighting of this sort is going on across the federal government, and it’s especially troubling when it undermines the credibility of an agency like SSA, on which millions of Americans rely for essential benefits and trustworthy information. The Social Security solvency cliff is fast approaching. Policymakers and the public need to be able to trust what they hear from the agency as the nation debates how to preserve the program.

Millions of older Americans may have access for the first time to obesity drugs at a low price of $50 a month starting in July under a Medicare pilot program.

What are the GLP-1 drug risks for people over 65?

Seniors on Medicare may be able to get GLP-1 drugs covered for weight loss under a new pilot program that began on July 1. But older people face some unique risks in using these drugs, one expert told The New York Times:

Doctors said that while many patients are eager for these medications and that the health benefits of weight loss can be considerable, there are some unique factors to consider. The risk-benefit calculus for these drugs “is very different for older adults than for younger people, because the risk, the potential for harm, is greater,” said Dr. Rozalina McCoy, an associate professor of medicine at the University of Maryland School of Medicine who treats diabetes in older adults.

Key risks include bone and muscle loss, diminished appetite and dehydration and interference with other medications.

There’s also uncertainty about whether the drugs will continue to be covered after the pilot program ends after 2027. This is a key issue, because research shows that most people need to stay on the drugs to maintain weight loss or other health benefits.

What I’m reading

The retirement tax break most people overlook . . . How to build a retirement that fits your life . . . Seven common misperceptions about retirement planning . . . A new senior living model for the middle market . . . Don’t blame old people for America’s decline . . . Provider groups decry Supreme Court decision that could see the departure of immigrant long-term care workers . . . Their student loans won’t let them retire . . . Why I object to “hitting a number” for retirement success . . . Obamacare insurers will seek big rate hikes again for 2027 . . . What it’s like to retire and start a small business . . .How far would a daughter go to save her aging parents from self-neglect?

As you might guess, I get plenty of questions from family, friends and readers about how to sign up for Medicare. In these conversations, I’m always struck by the complexity of the Medicare program - and the challenging task of transitioning to it from other types of health insurance. That’s what prompted me to write a primer on Medicare enrollment for the New York Times that appeared this past weekend.

In my book Retirement Reboot, I argue that complexity is a feature - not a bug - in the various systems we’ve built for retirement in the U.S. There’s no better example of this than Medicare.

While many think of Medicare as a single government program, a great deal of privatization has been added over the years - most of it counter-productive. Private insurers now sell Medicare Advantage plans, prescription drug plans, and supplemental Medigap policies alongside the core federal program. Enrollees must navigate online marketplaces, brokers and commission-earning agents — and some coverage decisions need to be revisited annually.

Getting the timing of enrollment right is critical. And some people are surprised to learn that they may pay more - or less - than the standard amounts for their coverage.

It’s far too easy to make mistakes along the way. That’s why I believe we should streamline and simplify Medicare coverage. Here are just a few examples:

• Set a standard out-of-pocket cap for both traditional Medicare and Medicare Advantage. Experts have modeled caps ranging from $2,000 to $5,000. This would make Medigap plans unnecessary and also make it easier for people to switch back and forth between traditional Medicare and Advantage. A reform like this could be funded by reducing the current over-payments to Advantage plans ($76 billion per year, according to MedPAC, and higher by some estimates).

• Replace the Part D marketplace with a standard prescription drug benefit. This would remove the burden of shopping - and -reshopping - drug coverage annually.

• Require the Social Security Administration to send a clearly worded letter (by mail) explaining the requirement to sign up during the seven-month Initial Enrollment Period, which includes the three months before, the month of and the three months after your 65th birthday. Missing that window sets off late-enrollment penalties for Part B and Part D, which covers prescription drugs, that continue for life. The letter should explain when you can delay and when you cannot - and the substantial lifetime penalties you can incur if you don’t sign up on time. That has been proposed in legislation dubbed the Benes 2.0 Act. It would be a followup to Benes 1.0, which streamlined the enrollment process to eliminate lengthy coverage gaps after enrollment.

None of these reforms are likely to happen soon. So, while we’re waiting, check out my guide to enrollment in the Times (gift link). In it, I’ll walk you through enrollment step by step and explain the most important decisions you’ll need to make about coverage, enrollment timing and costs.

Read the column

What I’m reading

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Think of the trust funds as though they were checking accounts: revenues flow in, and benefit payments flow out. Over the last couple decades, the accounts accumulated large surpluses, but these cushions are now being drained rapidly. Retirement benefit claims are accelerating, and tax revenue is inadequate to keep pace.

If we reach the depletion date, benefits will be cut roughly 17% - most likely across the board. That would happen because Social Security has no legal authority to borrow money to make up shortfalls. Nothing has been done to address the problem, so it now falls squarely on the next Congress and presidential administration.

None of this is to say that Social Security would stop paying benefits. But a benefit cut of that magnitude would be devastating for people who rely on Social Security for most - or all - of their income.

Although the depletion date forecast didn’t change, some of the underlying factors described in the trustee report are troubling.

• The long-range assumptions about the size of the U.S. population were impacted by lower projections on the number of children women will have (down from 1.90 children per woman to 1.75) and a lower number of “unlawfully present” immigrants in the country due to the Trump administration’s crackdown.

• Trump’s “One Big Beautiful Bill Act” made changes to future income tax rates and standard deductions that reduced revenue to the trust fund.

Taken together, these factors produced a big hit on Social Security’s “actuarial balance,” - a figure that reflects the size of the increase in payroll taxes that would be required to make the program solvent for 75 years. Last year, the balance was 3.82%, but that figure jumped this year to 4.42%. That’s a huge change.

Voters should be asking candidates for Congress this year - and for the White House after that - what they plan to do about this problem. Politicians love to promise that they “won’t touch Social Security,” but that answer implicitly endorses the 20% across-the-board cut. In other words, doing nothing is, in fact, doing something quite significant to Social Security. That’s because program has no legal authority to borrow money to close the gap.

Trump has abandoned his party’s long-standing position that trust fund depletion should be solved through benefit cuts - and the deadline is so close now that cuts wouldn’t address the short-term problem, anyway. That doesn’t mean Republicans have abandoned the dream. Just this week, House Speaker Mike Johnson said this in an interview:

“The reason we are in trouble is because over 74 percent of federal spending is on autopilot, mandatory spending,” Johnson told a Louisiana radio station. “That’s your entitlement programs like Medicare, Medicaid and then things like Social Security. They have to be adjusted and fixed.”

Democrats have repeatedly proposed raising taxes by lifting or eliminating the cap on wages subject to the payroll tax ($184,500 this year). That would help address rising income inequality - when Social Security was last reformed in 1983, 90% of the country’s wage base was taxed, but that has now fallen to just 83%, because a larger share of income is going to the top 10%. Discussing the 1983 reforms, Robert Reich notes:

The Greenspan commission assumed that, as the cap rose with inflation, the Social Security payroll tax would continue to hit 90 percent of total income.

Today, though, the Social Security payroll tax hits only about 83 percent of total income in America. It went from 90 percent to 83 percent because a steadily larger portion of the nation’s total income has gone to the top.

In 1983, the richest 1 percent of Americans got 11.6 percent of total income. Today, the top 1 percent takes in more than 20 percent.

This year, someone earning $1 million in wages stopped paying any Social Security payroll tax at the beginning of March. Jeff Bezos probably stopped a few minutes past midnight on January 1. Elon Musk, a few seconds after midnight on January 1. (In point of fact, Bezos, Musk, and other robber barons of this Second Gilded Age get all the cash they need by borrowing against their fortunes, rather than bother with pesky wages, so they probably pay a pittance in Social Security taxes.)

Logically, then, to get back to 90 percent, the ceiling on income subject to the Social Security payroll tax has to be raised.

If all income in excess of $400,000 were subject to the Social Security payroll tax, Social Security’s solvency would be guaranteed forever. We could also expand Social Security benefits.

Other solutions that have been proposed include increasing payroll tax rates gradually over time, taxing returns on investments, or increasing revenues via general fund transfers or new dedicated revenue sources.

“It is a simple math problem, but it’s not a simple political problem,” said Karen Glenn, the Social Security Administration’s chief actuary, during an expert panel discussion hosted this week by the National Academy of Social Insurance. “We need to make choices addressing that shortfall between 2034 and 2100 We need to either raise scheduled revenue by 2034 by about one-third, reduce scheduled benefits by about one-fourth or some combination of the two.” (Watch the briefing below.)

Let’s stay away from talk of “combinations” of tax increases and benefit cuts. The real question is what kind of retirement security we want Social Security to provide.

We are in a situation where most accumulated retirement wealth is concentrated among a relatively small share of households. Many Americans approaching retirement have little or no savings beyond Social Security, and millions already rely on the program for most of their income.

Smart reforms would not simply restore long-term solvency. They would strengthen benefits to help close the retirement income gaps facing low- and middle-income Americans.

One way to pay for that would be to rethink the tax preferences built into 401(k)s and individual retirement accounts. These tax benefits are often described as incentives to save for retirement, but they disproportionately benefit higher-income households that are already most able to save.

The Treasury Department estimates that tax preferences for employer-sponsored retirement plans and IRAs reduced federal revenues by roughly $189 billion in 2020. Research by the Center for Retirement Research at Boston College found that 59% of these tax benefits flowed to the top 20% of earners, while just 3.7% went to the bottom 40%.

We could redirect a portion of these subsidies toward strengthening Social Security, where the benefits would be distributed far more broadly and progressively.

The question is not whether we can afford adequate retirement benefits. The question is what level of economic security we choose to provide in old age.

We’re trending toward a larger Social Security COLA

This week’s inflation report is pointing to a larger cost-of-living adjustment (COLA) for Social Security in 2027.

Inflation jumped for a third straight month, with the Consumer Price Index rising 4.2% in May compared with the year-ago period, driven almost entirely by energy prices stemming from the Trump administration’s war with Iran.

It’s too early to forecast the COLA, which is calculated from third-quarter inflation data, especially since the future course of the war is unknown. But most energy experts say that even if the war ended immediately, energy prices would not fall quickly.

The Senior Citizens League is forecasting a COLA of 3.8%, which would be the largest since 2022, when COVID-era inflation led to a benefit jump of 8.7%. It would be a full percentage point higher than the 2.8% COLA this year.

The COLA always generates intense public interest, since many people think of it as a Social Security “raise.” While a 4% increase might feel good, the COLA really is designed to simply keep retirees even with rising costs - and it is only modestly successful in meeting that goal. Rising health care and food costs, in particular, have eroded living standards for seniors.

What I’m reading

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Advantage plans can indeed save you money upfront. Many include prescription drug coverage and charge no additional plan premium beyond the Part B premium. You don’t need a supplemental Medigap plan to cap out-of-pocket (OOP) costs, because Advantage plans come with their own built-in caps.

But the comparisons sidestep a critical question: what’s your financial exposure in a Medicare Advantage plan if you get sick and need a great deal of care?

A new brief by KFF, the health care research group, takes a deep dive into this question.

The federal government sets maximum OOP amounts for Advantage plans. This year, the in-network ceiling is $9,250, but many plans set lower limits to win marketshare. This year, the average Advantage plan capped in-network OOP outlays at $5,421, and $9,825 for in-network and out-of-network combined, according to KFF.

At first glance, that in-network cap seems reasonable - assuming that you’re willing to stay in-network - considering that a Medigap plan might set you back $2,000 or more in some parts of the country.

Most Medicare Advantage plans are either HMOs, which generally require beneficiaries to use network providers except for emergencies and certain limited situations, or PPOs, which allow out-of-network care at higher cost.

The KFF analysis measures the financial exposure beneficiaries face in their plans - it doesn’t indicate how many enrollees actually reach these spending limits in a given year, because that data isn’t available. But the brief does look beyond the average OOP caps - and the figures here are revealing. Many beneficiaries are protected by relatively modest caps, but millions are exposed to high OOPs before reaching their plans' limits:

About one in 10 Advantage enrollees are in plans with the maximum out-of-pocket limit for in-network services ($9,250). Among the 8.6 million enrollees in PPOs, roughly one in five (22%; 1.8 million) are in plans with the maximum out-of-pocket limit for in-and out-of-network services combined ($13,900).

At the other end of the spectrum, 13% of all Advantage enrollees are in plans with out-of-pocket limits of $3,000 or less for in-network services. But nearly all of them are in HMOs, which have the tightest restrictions on the health care providers you can see.

This KFF chart depicts the spread just for in-network services (to see the in and out-of-network combined cap, visit the brief online and click the button for that data, currently shown against a gray background).

The numbers show that it’s critically important to consider your overall protection against high OOP costs when selecting an Advantage plan. Review your coverage during the annual enrollment period that runs from October 15 - December 7th. Also pay careful attention to the list of in-network providers and confirm with your health care providers that they will be in the plan you’ve selected for the coming year. And, make sure your prescription drugs will be covered.

You also can leave Advantage and shift to traditional Medicare during the annual fall enrollment period - with one caveat. Before making the switch, verify that you can obtain Medigap coverage at a price you can afford. In most states, insurers may deny coverage or charge higher premiums based on health status once your initial Medigap enrollment window has closed.

When you first sign up for Part B, Medigap plans are required to accept you — and can’t charge more — regardless of pre-existing conditions. This “guaranteed issue” right applies during your six-month Medigap Open Enrollment Period, which begins the first day of the month you turn 65 (or older) and are enrolled in Part B.

After that window closes, most states allow Medigap plans to reject applicants or charge higher premiums based on pre-existing conditions. Four states offer broader protections: Connecticut, Maine, Massachusetts, and New York.

Other KFF research has found that traditional Medicare paired with a Medigap may provide more predictable long-term costs. While Medigap coverage requires an additional premium, it can substantially reduce or eliminate out-of-pocket costs, depending on the plan you select.

Learn more about how to shop Medigap here.

If you want to switch this fall, start by shopping the Medigap market using the federal Medicare plan finder tool and then apply for a plan that looks good to you. The insurance company will walk you through a “medical underwriting” screening by phone before approving your application. If you’re accepted, you can then disenroll from Advantage. Traditional Medicare will now become your default enrollment.

The true test of any health plan isn't what it costs when you're healthy—it's what it costs when you're not.

Donald Trump has signed more than 250 executive orders during his second term as president, so you could be forgiven if you missed the one that aims to fix the biggest problem with the US retirement savings system: the coverage gap.

Only about half of private-sector US workers have access to an employer retirement plan at any given time, mainly because small businesses are less likely to offer the plans.

The executive order acknowledges that problem and directs the US Treasury to create TrumpIRA.gov, a federally run online marketplace for privately offered low-cost IRAs. It’s framed as a way to expand retirement access, especially for gig workers, part-time employees, small-business workers, and the self-employed.

Savers using the site will be able to receive a federal matching contribution via the newly upgraded Saver’s Match program, which became a refundable $1,000 contribution from the government as part of the Secure 2.0 legislation signed into law in 2022 by President Joseph Biden. The match replaced the Saver’s Credit, which was nonrefundable and therefore did not benefit low-income workers with little or no federal income tax liability.

The planned online IRA marketplace falls short of what some advocates were hoping for—and which Trump teased in his February State of the Union address when he promised to give uncovered workers “access to the same type of retirement plan offered to every federal worker.” That was a reference to the successful Thrift Savings Plan for federal workers, which offers a very low-cost, simple menu of investment options.

In my latest Morningstar column, I take a deep dive into the proposal and what might come next.

Read the Morningstar column

What I’m reading

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A new Medicare program launching this summer could put GLP-1 weight-loss drugs within reach for millions of seniors for the first time. The catch: it’s a temporary pilot program with an uncertain outlook after 2027.

Medicare announced last week that a pilot program providing access to some GLP-1 drugs for obesity will begin July 1, with a very low patient co-payment of $50 per month. Medicare Part D already covers some GLP-1 medications for conditions such as diabetes, cardiovascular disease and sleep apnea; now, this program will be available for certain GLP-1 drugs approved for weight loss.

The expansion could significantly increase access to anti-obesity GLP-1 drugs among Medicare beneficiaries. About 40% of the 70 million people enrolled in Medicare meet the clinical definition of obesity, Centers for Disease Control and Prevention data shows. And the $50 monthly price is much lower than Medicare patients currently pay out of pocket for GLP-1 drugs covered under Part D for treatment of conditions other than obesity.

The pilot program - known as the Medicare GLP-1 Bridge - will run through the end of 2027. The Centers for Medicare & Medicaid Services has not yet announced plans to restart or restructure its longer-term plan to integrate coverage into Part D after that date.

There are some odd twists to the way this coverage is coming online. You must be enrolled in a Part D or Medicare Advantage program to to receive coverage - but this will not be part of your plan. There’s also no assistance for low-income seniors at this point, because the coverage is outside normal drug coverage. Finally, if the weight-loss coverage does move into Part in 2028, the out-of-pocket costs are almost certain to be higher than the $50 pilot co-pay.

My latest article for the New York Times takes a look at what Medicare beneficiaries seeking coverage need to know about how the pilot program will work, who is eligible, and how coverage might continue after the pilot period ends. There’s also a useful F.A.Q. page on the Medicare website.

What I’m reading

Social Security COLA on track to be around 3.9% next year . . .When you’re fired from retirement . . . Private assets may be coming to your 401(k) plan - you should know the risks . . . How “age tech” might help you age at home . . Millions covered by Obamacare have dropped coverage since Congress allowed premium subsidies to expire . . . Lawsuit raises questions about legal rights of people using donor-advised funds . . .My parents are in their mid-80s - why won’t they plan for the end?

Americans are more worried about affording retirement than at any time in the past five years - and their level of concern is approaching those last seen during the Great Recession.

That’s the finding of the longest-running survey of retirement confidence, conducted annually by the Employee Benefit Research Institute.

Just 64% of Americans say they feel confident they have enough money to live comfortably throughout retirement, with worries about household financial health, rising cost of living (especially health care) and growing concern about the future of Social Security and Medicare among the top concerns.

Retirement confidence fell for both workers and retirees. Workers’ confidence in having enough money to live comfortably in retirement fell six percentage points from 2025 to 61%, while retirees’ confidence fell five percentage points to 73%.

Notably, the survey was conducted in January - well before the U.S. - Israel conflict and the ensuing surge of oil prices.

Any number of risks can impact your retirement plan, and researchers have found a disconnect between people’s perception of risk and what actually matters most. Most people think their largest risk is in the stock market—but the most important is longevity—how many years of retirement you’ll ultimately need to fund. Planners call this “longevity risk”—the danger of exhausting resources before the end of life.

And risk actually is higher for wealthier people, since they tend to rely less on Social Security—which provides a guaranteed lifetime source of income—and more on savings, which can be exhausted at advanced ages. Risk also rises for widows who reach advanced ages, since total household Social Security income falls when one spouse dies—typically by about one-third. Some expenses fall, but poverty rates tend to rise in these situations.

Most of us don’t perceive these risks objectively. A study of major retirement risks—and how people perceive them—found a disconnect between perception and the quantifiable risk people actually experience over the course of retirement. The study considers the following major risks:

• Longevity—the risk that you will outlive your financial resources.

• Health care—the risk of rapidly rising costs of routine and long-term care

• Market risk—the risk associated with the shift from traditional pensions to 401(k)s, which leaves retirees with greater responsibility to manage investments and suffer direct losses when markets head south

• Inflation. This is a persistent threat to purchasing power, even when it’s not making headlines. So far this century, inflation has averaged about 2.5% per year, producing a cumulative increase in prices of 91.7%. In other words, today’s prices are nearly double average prices in 2000—a dollar today buys about 52% of what it did at the turn of the century.

• Family—the risk of unforeseen financial support for relatives

• Inflation—It was up in the wake of the pandemic, and it’s heading much higher now due to the Trump administration’s decision to launch the war in Iran. Fast-rising energy and food prices will push inflation higher in the near-term, and the long-term outlook is unclear. But inflation is a constant risk factor in your retirement plan—even when it’s not making headlines—and it can cut into purchasing power in retirement substantially. So far this century, inflation has averaged about 2.5% per year, producing a cumulative increase in prices of 91.7%. In other words, today’s prices are 192 times as high as average prices in 2000 - a dollar today buys 52% of what it did at the turn of the century. Family—an unforeseen need to provide help to family members

• Policy—the risk that the federal government will fail to continue fully funding Social Security or Medicare

That last one - policy risk - is a topic of growing concern for workers and retirees alike, the EBRI survey found.

Just 60% of retirees are confident that Social Security will be funded at a level that maintains benefits—down from 72% in 2021. Among workers, confidence held roughly steady at 51%. That is upside down from the usual research finding—younger people are typically far more worried about future Social Security funding than retirees.

Retiree confidence in the future of Medicare fell by a similar amount - although it’s not clear why, since there’s no immediate financial crisis confronting the program.

Social Security, on the other hand, is projected to exhaust its trust fund serves in 2034, forcing an across-the-board benefit cut of more than 20% if the problem is left unaddressed.

I have long held the view that Congress would work out a solution, but I’m becoming less confident as political dysfunction in Washington persists. A backstop solution might be an emergency injection of general revenue as the solvency deadline approaches—but that would require government borrowing. If U.S. debt and borrowing continue to rise, markets could react negatively to financing Social Security benefits this way.

The bond market reaction to borrowing might depend on how the plan is framed - is it a long-term solution or only a “bridge” to new funding sources?

Ageism and housing: A tax aimed at forcing older homeowners to downsize

I don’t write often about generational “warfare” or misguided debates on how to allocate resources among young and old. But a proposal from one generational warrior caught my eye: older homeowners should pay a tax aimed at forcing them to sell their homes and downsize.

An op-ed this week in the New York Times argues that older people are hoarding the nation’s resources and need to be pushed aside.

The essay was written by Samuel Moyn, a professor of law and history at Yale University. Moyn- born in 1972—argues in the op-ed, adapted from a forthcoming book, that it’s time to upend our “gerontocratic society in which the old control ever more power and wealth, leading to overrepresentation in political life and unequal power in social life.”

Moyn’s solutions include reinstituting mandatory retirement ages. Most striking is his proposal for a tax on older homeowners aimed at incentivizing them to downsize, freeing up their property for younger buyers:

Older Americans own much of the most desirable real estate in the country’s best cities, and they are not moving. The 70-to-74 age group has the highest homeownership rate in the nation — above 80 percent — and those 75 and older are close behind. The median age of a home buyer was barely 30 in 1981; by 2024, it was 56.

In housing, besides circumventing the disproportionately high elder participation in town meetings where land-use decisions are made, I advocate a progressive tax on older homeowners to incentivize them to downsize rather than retain. The longer you stay, the more you should have to pay. The funds could allow for new construction and other projects of intergenerational justice, especially educational ones that prioritize unleashing our young people into the creative prime of life.

Don’t panic - this isn’t likely to occur anytime soon. It would not survive any number of legal challenges and might well be unconstitutional. I mention it here to illustrate the one-dimensional thinking applied to tough problems like our affordable housing shortage. The housing shortage affects people of all ages - where are these eager older downsizers supposed to go?

Older adults, especially women, are experiencing significant difficulties in finding affordable and accessible housing. The housing market is losing low-cost rental options, worsening the affordability crisis for older renters.

A look at the science behind longer lives

Ninety five percent of Americans over 60 have at least one chronic disease and almost as many have two.

Health and wellness advocates often focus on controlling the aging process through “age reversal” and biohacking. But the most serious science on living longer focuses on addressing the biggest chronic killers- cardiovascular and neurodegenerative disease, cancer and diabetes.

PBS NewsHour focused on this topic in a recent interview with two leading figures in longevity science— Eric Topol and Sandra Weintraub. They discuss what people can do to reduce the risk of chronic disease, the best approaches to maintaining mental and physical health, and the latest research pointing toward longer lives. They also caution against longevity supplements and other scams.

Dr. Topol is the author of Super Agers: An Evidence-Based Approach to Longevity.

What I’m reading

Help for Medicare Advantage patients who lose doctors is shelved . . . What to know about adding annuities to your 401(k) . . . I became less ambitious in retirement, and happier . . . Why Health Savings Accounts are a bad deal . . . The surprising ways cannabis affects the aging brain . . . They withdrew 401(k) funds early, and they have regrets.

The Social Security Administration’s ability to transact business with the public has been deteriorating for more than a decade. But the unprecedented shakeup and downsizing launched last year by the Trump administration has made it much more difficult to do business with the most important government agency serving retirees.

The SSA has struggled with inconsistent and inadequate funding of its administrative budget going back to the Reagan administration in the 1980s, and after-inflation resources have been on a roller coaster ever since. Between 2010 and 2024, the budget and staffing fell sharply - during a time when the number of beneficiaries was soaring.

But customer service at the SSA really fell off a cliff last year when Elon Musk’s “Department of Government Efficiency” turned its fire on the agency. DOGE pushed out 7,500 SSA employees last year, with many of the cuts coming from customer service and information technology staff. DOGE also hollowed out the agency’s senior career leadership staff, causing an unprecedented loss of institutional expertise. The SSA now has fewer employees than at any time since 1967, when it served 52 million fewer beneficiaries. Field office staff numbers have dropped precipitously, and staff has been scrambled to meet demand, with calls to the agency’s toll free service line routed to field office staff all over the country.

The loss of institutional knowledge, low staffing levels and technology challenges mean that the damage will be long-lasting and difficult to repair.

The situation requires an extra level of preparedness when you need to do business with the SSA.That might include an application for retirement, disability or signing up for Medicare Part A or B. Even paperwork matters that should be routine also can be a challenge, such as updating bank records or mailing addresses, or a name change.

With that backdrop, I offer some tips for minimizing the hassle in my latest Morningstar column.

Read the Morningstar column

Listen: The outlook for Social Security and Medicare

What’s the best way to optimize your Social Security benefit claim? What’s the outlook for the trust fund’s solvency? Traditional Medicare or Medicare Advantage?

Steve Chen, founder of the financial planning firm Boldin, put me through my paces during our recent podcast chat about retirement. I also reflected with Steve on the on the work I’ve done covering retirement over the past two decades and my own decisions about claiming Social Security and Medicare.

Click the video below to hear our discussion.

Wealthy investors are bailing on private equity; will 401(k) plans take up the slack?

The U.S. Department of Labor proposed a regulation late last month that would make it easier for 401(k) plans to add private equity investment options.

The term “private equity” refers to investment in companies that are not publicly traded on a stock exchange - and is typically managed by specialized investment firms or pooled funds. The idea is to pool capital to buy, improve, and eventually sell companies for a profit.

Much of the commentary on the proposed DoL rule has focused on the risk of adding private equity to retirement plans - and that’s appropriate, especially at a moment when some institutional and high-net-worth investors have been reducing allocations or facing liquidity pressures in private markets.

But the rule actually proposes a broader effort to clarify fiduciary responsibilities of plan sponsors and to reduce the risk of litigation claiming that they have failed to do so. Plaintiff law firms filed a near-record high 155 ERISA fiduciary lawsuits in 2025. one report found. Most were filed against retirement plan sponsors, although some focused on health insurance plans.

The rule doesn’t eliminate the risk of litigation, but it spells out a processsponsors can follow to determine if they are meeting their fiduciary duties.

In doing so, it would create a safe harbor tied to well-documented selection and monitoring of investments - including riskier investment options like private equity and alternative investments.

I don’t expect to see plan sponsors rushing to add these options in large numbers anytime soon - they are a conservative, slow-moving lot and with good reason. An important question they must answer: what problem are these investment options intended to solve?

As I’ve noted elsewhere, workplace retirement plans have improved significantly over the past two decades with the advent of greater automation of enrollment and portfolio management. Average participation rates are up, as are contribution rates. And there’s been strong adoption of target date funds, which automatically rebalance portfolios to age-appropriate asset allocations.

The problem that does need to be addressed is coverage. Only half of private-sector workers are covered by a workplace retirement plan at any given time, mainly because small employers are less likely to offer plans. The Trump administration is signaling interest in expanding coverage; I’ll believe it when I see it.

About that Medicare Advantage doomsday . . .

Remember the freak-out back in January about the proposed cutback in federal reimbursements to Medicare Advantage plans? I cautioned Advantage enrollees not to get too worried about health insurance threats of plan shutdowns and benefit rollbacks - partly because I doubted that the cutbacks actually would come to pass.

The health insurance lobbyists didn’t disappoint. The Trump administration announced this week that payments to Advantage plans will rise 2.48% in 2027. As the Wall Street Journal puts it, that is a “dramatic increase after a preliminary proposal holding the line on payments drew fierce criticism from the industry and torpedoed shares of the largest companies.”

What a relief - the gym memberships, cash cards and green fees will continue to flow in 2027.

What I’m reading

A provider presses for massive expansion of health savings accounts . . . How a “Trump account” can be turned into a multi-million dollar tax-free retirement nest egg . . . Rising health care costs prompt middle-age people to delay medical care until Medicare enrollment . . . Trump team changed report to hide how bad DOGE made things at the Social Security Administration . . . I want to avoid the “aging mistakes” my parents made, and I’ve got work to do . . . Don’t call these “retirement communities” . . . The age-old obsession with living forever . . . What happens to small businesses when their boomer owners retire?

Retirement savers in workplace 401(k) plans have had strong consumer protections on their investments since the mid-1970s. There’s been a long-running battle to extend strong protections to Individual Retirement Accounts (IRAs) that dates back to the Obama era, but the latest effort was blocked by a federal court in Texas earlier this week.

The fight is over this question: should financial professionals be required to act as fiduciaries when they advise people on investments that roll over from workplace plans to IRAs.? That requirement forces advisers to act solely in the best interest of the client when advising on investments. The Biden-era Department of Labor adopted a Retirement Security Rule that was set to take effect in 2024. The insurance industry and other opponents immediately sued, and they succeeded this week in getting the rule halted.

Big money is at stake here. Rollovers from 401(k) plans to IRAs account for the vast majority (97%) of the assets in IRAs - last year alone, $855 billion was rolled over, and that number is expected to jump to more than $1 trillion annually by 2030 as the boomer retirement wave accelerates. One of the big problems with non-fiduciary advice is that investors get steered to more expensive mutual funds and annuities. It’s not difficult to see that billions of dollars are at stake in these higher fees, not to mention the drag higher costs place on investment returns.

This failure to provide reasonable protections to investors is a prime example of the thesis I articulate in my book, Retirement Reboot: Complexity is the enemy of everyday working Americans trying to build toward a financially secure retirement. We have built retirement systems that require more expertise and knowledge than most people can be reasonably expected to have. Certainly, the challenge of hiring trustworthy planning advice is near the top of the complexity problems.

Fortunately, you do have options

If you’re considering hiring a financial adviser - for help with a rollover or anything else -simply don’t hire someone who is not a fiduciary.

Your best choice is a Registered Investment Advisor (RIA) who works on a fee-only basis. Under this arrangement, advisors are compensated through fees paid by the client (such as a percentage of assets or a flat fee), rather than with a commission based on what they sell to you. These are fiduciaries who usually work independently or are affiliated with small firms. They will have access to a wide array of financial products from a variety of providers, rather than a captive set of offerings from their own employer. RIAs are regulated by the SEC and in some cases by state authorities. They’re held to a fiduciary standard of care.

Ask the fiduciary question upfront when you interview prospective advisers, and if the answer is not satisfactory, walk away. Or, if an advisor you want to hire is not a fiduciary, you can still clear things up by asking her or him to sign the Fiduciary Oath, which was created by the Committee for the Fiduciary Standard, a professional organization formed to advocate for fiduciary standards. The oath should bind the advisor to serve you according to fiduciary standards.

I included a chapter in Retirement Reboot on the value of financial planning advice, and how to hire a trustworthy adviser.

What I’m reading

When switching from Advantage to traditional Medicare, beware Medigap plan refusals . . Income tax policy in red and blue states grows further apart . . . How government policy risk affects retirement planning for older Americans.

Here’s one debate about retirement saving that never seems to end: should you be using a traditional tax-deferred account or an after-tax Roth?

Most people put their retirement savings into traditional 401(k) plans and individual retirement accounts. Most contributions to these accounts are tax deferred. That enhances returns by allowing your investments to compound without a tax burden — and it also reduces your income tax bill in your higher-income working years.

But drawing from these traditional accounts in retirement can have downsides, including higher marginal tax rates, taxes on Social Security benefits and surcharges on Medicare premiums. And leaving tax-deferred accounts to your heirs can create tax headaches for them.

I wanted to get to the bottom of this debate for my latest New York Times “Retiring” column. Who should be using Roths?

The answer comes down to two groups:

• Younger retirement savers. They tend to be in their lower-earning years and in lower tax brackets, which makes tax deferral less valuable.

• People with very large accounts. Most people will be in lower tax brackets in retirement, since they no longer have taxable wages. Drawdowns from traditional accounts will be made with at lower tax rates. But retirees with large nest eggs may see their tax bills rise — especially after they start taking required minimum distributions, which begin at age 73. R.M.D.s can force larger withdrawals than you want, pushing you into higher tax brackets. You’re no longer contributing to a 401(k), so that pre-tax deduction disappears. Deductions for mortgage interest also are gone if you’ve paid off your home, and likely for dependent children. Deductible state and local taxes may be lower‌.

  Along with higher-income tax brackets, higher taxable income in retirement can trigger a larger bite from your Social Security benefits. Higher-income retirees also pay higher premiums for Medicare Part B (outpatient care) and Part D (prescription drugs).

There’s also a more general case that Roth accounts can help create tax diversification. As tax expert Ed Slott told me:

“Most older people are heavily over‌-‌weighted in tax-deferred accounts — they have no tax risk diversification. These are sophisticated investors who would never put all their eggs in one basket, because that’s a basic rule of investing — yet all their eggs are in one tax basket, so they’re at the mercy of a possible future higher tax bill.”

My Times column (gift link) takes a close look at who can benefit from a Roth, and how they can be used effectively.

Read the column

Why $212 was tacked onto your Part B bill last year

Wasteful overpayments to Medicare Advantage plans have been well-documented. But a new congressional report details how much the overpayments cost beneficiaries.

If you’re enrolled in Medicare, you paid $212 last year in higher Part B premiums to fund these overpayments - whether you are in an Advantage plan or the traditional program. Part B premium costs are projected to double over the next decade; if these overpayments continue, that “Advantage tax” will jump to $450 per year.

Overpayments to Medicare Advantage plans occur mainly because the program pays insurers a risk-adjusted per-person amount that depends on how sick enrollees appear in administrative data. Several structural features of the system create incentives—and opportunities—for payments to exceed the expected cost of care.

The largest driver is aggressive diagnostic coding.

Plans are paid more for members with more documented conditions (diabetes, heart failure, etc.). Many of these diagnoses don’t necessarily translate into higher treatment costs, but they increase payments.

Plans with high ratings under the Medicare Advantage Star Ratings System receive bonus payments and can offer extra benefits. The ratings are inflated because most plans cluster at four or five stars.

What I’m reading

How to protect yourself from scams targeting older adults . . . How the loss of enhanced ACA premiums will impact older Americans . . . Medicare Advantage “dark money” group goes to bat for higher federal payments to insurance companies . . . Former DOGE engineer allegedly took sensitive Social Security data on a thumb drive in a major potential security breach . . . Lawmakers re-introduce bill to strengthen Supplemental Security Income.

Perhaps the only thing President Donald Trump said during his State of the Union address last week that had any bipartisan appeal was his pledge to create a retirement saving plan for people who don’t now have access to workplace 401(k)s, paired with a $1,000 annual matching contribution from the federal government.

Only half of private sector workers have access to a 401(k) plan at any given time, and policymakers have been trying to expand coverage for nearly two decades. One way to do this is with a national investment platform that gives uncovered workers an investment account similar to the 401(k). A government plan would be especially helpful for lower-income workers, who tend to work for small firms that don’t have their own retirement plans. This is one reason why nearly all of the retirement saving accumulation has gone to roughly 20% of the wealthiest households.

A national, universal retirement solution that covers everyone lacking a workplace account could be a critical building block for improving economic security in retirement for low- and middle-income people. But it would need to be paired with improvements to our social insurance programs - Social Security, Medicare and Medicaid.

A national savings plan

The most ambitious ideas for a national savings plan over the past couple decades have gone nowhere: they include the Obama-era automatic IRA and myRA programs. Most blue states have enacted their own versions of the auto-IRAs, and they have been modest successes.

The Trump plan appears to head in a different direction. It would be modeled on the federal Thrift Savings Plan — the defined contribution system serving federal workers and members of the military. Trump said in his speech that the plan would give uncovered workers “access to the same type of retirement plan offered to every federal worker.”

This picks up on a 2021 proposal by economists Teresa Ghilarducci and Kevin Hassett (now the director of Trump’s National Economic Council). Ghilarducci has been advocating for a universal retirement savings plan - paired with robust Social Security benefits - for many years.

The TSP is one of the most efficient retirement savings platforms in the world. It offers ultra-low cost index funds and minimal administrative fees, and a very simple menu of rock-solid investment choices.

So, TSP-for-All is an interesting idea.

A program such as this could have a very real impact on retirement security - if it has the improvements in plan design that have made private sector 401(k) plans more successful over the past two decades. These include widespread integration of auto-enrollment, auto-escalation and target-date funds.

A national plan would need a meaningful matching contribution to incentive participation and accelerate asset growth. A flat $1,000 annual contribution isn’t a bad start, but other versions of this plan have called for matching a percentage of workers’ wages, ranging from 3% to 5%. That’s what Ghilarducci and Hassett described in their 2021 proposal.

Opening the existing TSP to the broader workforce has intuitive appeal, but it would require explicit congressional authorization. It might instead be necessary to create a TSP clone for this public option. But there are many unanswered questions.

Should we take this seriously? After all, Trump’s pledge came in the middle of a nearly two-hour speech filled with false claims about the economy, elections and crime. Just days later, the administration unleashed a chaotic war in the Middle East by attacking Iran.

And how many Americans would sign up for a savings account administered by a federal government that is already sharing certain categories of administrative data across agencies — including between the IRS, the Social Security Administration and the Department of Homeland Security — under policies now being challenged in court?

Is the federal government capable of standing up a program like this? The U.S. Treasury, which will be tasked with this project, has lost at least 11,000 workers over the past year under the assault of DOGE. The cuts at the IRS have been linked to large projected declines in tax collections,and heavy attrition in technology and enforcement staff have created operational challenges. There have also been legal and governance conflicts over system access that complicate Treasury’s core fiscal responsibilities.

How would TSP-for-all impact Social Security? A shift in the federal government’s focus to private accounts and savings could be used as an excuse not to shore up Social Security benefits for low income workers - and that would be far more effective than any savings program I can imagine. The low-hanging fruit includes modernizing and increasing Supplemental Security Income benefits and boosting retirement benefits for lower-income workers. Legislation to do just that was introduced in Congress this week.

Who would run it? The TSP is overseen by the Federal Retirement Thrift Investment Board, an independent agency created by Congress. Scaling that framework to tens of millions of private-sector workers would represent a dramatic expansion of federal administrative responsibility. Would the same board oversee the assets? Would Congress create a parallel structure? And how would fiduciary responsibility work?

Would participation be mandatory? Coverage is the central weakness in America’s retirement system. Voluntary participation tends to leave out lower-income workers. If employers were merely given the option to use the TSP, take-up might be modest. If participation were required for employers without plans, the politics would change immediately.

Business groups have historically resisted federal retirement mandates. Any proposal compelling employer payroll deductions — or requiring employer matching contributions — would face intense scrutiny in U.S. Congress.

What happens to the existing 401(k) market? Allowing or encouraging employers to migrate into a federally administered plan would put the government in direct competition with private-sector record keepers and asset managers.

A less ambitious alternative would be to expand the refundable Saver’s Credit for lower-income workers, which was enacted as part of the Secure 2.0 legislation passed in 2022. This replaced an earlier nonrefundable tax credit (the Saver’s Credit) that merely reduces tax liability, with a direct match of up to 50% of retirement contributions, capped at $2,000 in contributions per person. The maximum federal match will be $1,000, deposited directly into the worker’s IRA or employer-sponsored plan.

This is a meaningful structural shift. The existing Saver’s Credit has been widely criticized for delivering little benefit to workers with minimal tax liability. The new design converts the incentive into an actual retirement contribution — refundable and visible inside the account.

But from a policy-design standpoint, the Saver’s Match directly targets the participation gap. It strengthens incentives for households least likely to save, without constructing a new federal administrative platform or displacing existing private infrastructure.

If the objective is broader retirement coverage and stronger savings outcomes, lawmakers face a strategic choice. They can pursue a sweeping redesign by expanding the Thrift Savings Plan to the entire workforce — a move that would require overcoming substantial legislative, administrative and industry resistance. Or they can build incrementally on existing systems, enhancing automatic enrollment and ensuring the successful rollout of the Saver’s Match.

But for Democrats, there’s another question. Wouldn’t it be better to offer legislative support for the TSP-for-All in exchange for the Social Security reforms that they have long desired? Those would include averting the looming solvency cliff by scrapping or lifting the cap on wages subject to the payroll tax and gradually lifting payroll tax rates. The reforms should also include expanded benefits for all but the highest-earning retirees, and increasing SSI benefits for very low income people. And those high-earners could even take a small haircut on their benefits if that helped get a deal over the finish line.

What I’m reading

What has surprised us most about retirement . . . Banks are becoming bulwarks for seniors vulnerable to scams . . . This is what destroying the vaccine market looks like . . . The big scary myth stalking the stock market . . . Senators calling for a fix to a flaw in the Social Security Fairness Act . . .How two career women turned retirement into renewment . . . How the new Medicaid, SNAP work requirements affect older workers . . . Super-agers’ brains have a special ability . . . New A.C.A. plans could boost family deductibles to $31,000 . . . Record numbers raid their 401(k) accounts.

Roughly 40% of people who claim Social Security work at some point after claiming, typically for several years, according to the Center for Retirement Research at Boston College.

Some people work after claiming because they’re struggling to afford retirement, but many higher-income beneficiaries work at older ages because they prefer to do so. A relatively small number have delayed their claims until age 70, when there is no further financial incentive to wait for benefits — but they are still working in a full- or part-time capacity.

For these higher-income people, working while receiving Social Security can come with a meaningful tax drag. If you claim before your full retirement age (currently 67), Social Security benefits are subject to the “earnings test” - a formula that temporarily withholds a portion of benefits if your wage income exceeds certain levels. You may also need to pay taxes on Social Security benefits or surcharges on Medicare premiums - or simply be pushed into higher income tax brackets.

A higher tax burden isn’t a reason by itself to stop working - working longer can offer an important path to improving retirement security. Wage income can enable delayed Social Security claiming by helping to pay living expenses. Working longer also can mean fewer net years drawing down retirement savings, and more years of employer-subsidized health insurance.

Just as important, continued engagement with work can provide a strong sense of purpose.

But the tax rules were not written with work at older ages in mind, and the combination of Social Security and wage income can easily trigger these tax drags. In my latest Morningstar column, I examine how your income can be impacted if you’re working and receiving Social Security.

“Sistine Chapel of the New Deal”: Celebrated Social Security murals in federal building threatened with demolition

Two blocks from the United States Capitol sits a Depression-era federal government building that was intended to house the brand new Social Security Administration. It never served that purpose, but it is home to a series of incredible murals created in the early 1940s by the renowned artists Philip Guston and Ben Shahn. The building has been nearly vacant for years, and the federal government has put it on a list of properties it plans to sell.

That has raised concerns about the survival of the murals, especially against a backdrop of disregard by Donald Trump for landmark structures in the nation’s capital (see: White House East Wing, Kennedy Center for the Performing Arts, possible triumphal arch along the Potomac River). New York Times art critic Holland Cotter wrote about the murals - and the fate of the building - last week following a tour of the building:

The murals I saw had been commissioned by the Treasury Department’s Section of Fine Arts, and painted in 1942 and 1943. They are works of visual power and grace. They are also primary historical documents of a nation still in recovery from the devastation of the Great Depression and attempting to forge a new democratic vision of itself. . . .

. . .At this point, it’s crucial for culture institutions across the nation to present a united front against the historical erasure ongoing under the Trump administration, of which the potential loss of the Cohen building murals would be another example. The president very clearly understands the political utility of public art. It can be no coincidence that the monuments-to-self proposals he has recently initiated — the ballroom, the renamed and redesigned Kennedy Center, the new triumphal arch — are appearing, like victory gestures, ahead of the country’s crucial midterm elections.

Heather Cox Richardson also offered an excellent discussion of the importance of the buildings and murals.

What I’m reading

The end of Obamacare subsidies means falling off a financial cliff for some Americans . . .‘Safe’ investments may be riskier than you think . . . To set a world record at 81, all she had to do was hold on . . . When doctors need cognitive testing . . . Using A.I. to save for retirement . . .When health insurance costs more than the mortgage.

A fight is brewing in the Medicare Advantage industry over the payments plans will get from the federal government in 2027. This isn’t the type of story I usually cover - but I want to comment here because you’re going to be hearing some dubious arguments from the health insurance lobby that could unnecessarily frighten people currently enrolled in Advantage plans.

The federal government announced this week that Medicare Advantage plans will get a payment boost of 0.9% for 2027 - far less than the 5% increase they received this year and were expecting again for 2027. Another sign that the climate for Advantage plans is souring in Washington is a recent Senate committee report documenting how UnitedHealth Group increases revenue through aggressive diagnostic practices. It found that the company has “turned risk adjustment into a business, which was not the original intent.”

The 2027 reimbursement rate announcement already has sent the insurance lobby into overdrive to reverse the decision and secure a heftier increase.

The stocks of UnitedHealth Group, Humana and other insurers plunged on the news and doomsday predictions already are ramping up. Premiums will rise. The number of plan offerings will be slashed. Benefits will be cut. Provider networks will be more narrow.

I hope you’re not enrolled in Medicare Advantage - I’ve argued for years that traditional Medicare is the program’s gold standard coverage and the best choice for most seniors. But if you are, don’t panic. You can expect to see doomsday ads on tv and elsewhere designed to frighten and perhaps even get you to pick up a phone to complain to your representatives in Congress.

But keep the following in mind:

• First, the proposed rate may not stick. Medicare could decide to make further changes before the final figure is released.

• Second, Advantage plans have other ways to adjust. MedPAC, the independent commission that advises Congress, has found that Advantage plans are paid nearly $80 billion per year more than Medicare would spend for similar people enrolled in traditional Medicare. The impact will be uneven across plans, but insurers have room to maneuver. They could cut marketing expenses, accept lower profits, or make other internal adjustments. Extra benefits and low premiums are key tools for attracting and retaining enrollees, so they will likely think twice before making changes that jeopardize market share.

• Third, for most people, there will still be plenty of plan choices in 2027. If you live in an urban area, you can expect dozens of Advantage plan options. In rural areas, where insurers already struggle to operate profitably, choices are thinner—and that could worsen in 2027. Some rural areas could see fewer plans, or possibly none at all. This only reinforces the importance of keeping traditional Medicare strong as a reliable fallback option.

Depending on how aggressive the insurance industry becomes, this issue could spill into the midterm elections. The lobby could run ads pressuring lawmakers to oppose the cuts. But remember: any changes to the Advantage program would not take effect until 2027.

Enolled in Advantage and genuinely worried about it’s future? You could consider switching to traditional Medicare during the annual enrollment period later this year. But don’t do that without first making sure you can buy a Medigap supplemental policy. Insurers cannot turn you away due to preexisting conditions when you first sign up for Part B - with the exception of four states, they can later engage in medical underwriting, allowing them to boost your rate or decline your business altogether.

You can confirm whether you can buy a Medigap policy by reviewing available plans using the Medicare Plan Finder and then calling the insurer directly to verify your options.

Americans are pessimistic about their economic future - with the exception of older people

Older people are the outliers in a new poll on sentiment among Americans about their economic future.

An overwhelming number of Americans are deeply pessimistic about their economic outlooks, according to a New York Times/Sienna poll, with a majority saying they are not confident in their ability to pay for housing, retirement, and health care. More than half said housing and education are so expensive that both have become unaffordable.

The economic pessimism breaks down along generational lines. Younger Americans expressed far more financial anxieties and a bleaker view of their economic futures than did older people.

But the generational findings bear some further investigation. Here’s what the Times wrote about the poll findings:

Half of voters under 45 described themselves as generally worse off financially than their parents were at their age, and just 10 percent feel they are getting ahead financially. A majority of those voters say the cost of having a family has become unaffordable. And as traditional pensions disappear and Social Security faces a financing shortfall, 75 percent of voters under 65 say they cannot afford the cost of retirement or feel insecure about it.

Voters over age 65 consistently expressed far less anxiety about costs. When asked what they worry about affording, 24 percent said “nothing.” Nearly 60 percent of older voters described themselves as “holding steady” financially, while 40 percent of voters under 30 said they were “falling behind.”

Older voters likely don’t face the same economic pressures as younger generations. Most receive health care through Medicare, bought homes in a far cheaper market and, with grown children, do not face record high costs of child care and education. But 26 percent said they worried about affording medical and health care costs.

Nearly two-thirds of voters over 65 said they can afford the life they feel like they should be able to afford, while a whopping 75 percent of voters under 30 said they cannot.

Here’s my take. For older people, the “things are fine” sentiment may hold up until an unexpected crisis occurs. A recent study by the National Council on Aging found that 80 percent of Americans ages 60 and over would not have sufficient liquid resources to handle a financial shock such as a divorce, a serious health problem or the need to pay for long-term care. The NCOA table below breaks out the total wealth of households age 60 and older by quintiles. Note, especially, the very low level of financial assets for all but the top two quintiles.

The pessimism among younger people makes sense when you consider the often unattainable cost of owning a home, paying for health insurance or saving for children’s college education. My own reporting on attitudes among young people about Social Security confirms their worries about affording retirement.

What I’m reading

Trump’s cuts are about to make health care even worse . . . The other health care cliff Americans are about to fall off of . . . What the MAHA food guidelines ignore . . . Columnist Les Jacobson on turning 80 . . . The Florida retirement dream is fading for the middle class . . . New Medicare payment plans may improve care and save money . . . Successful older job seekers explain what it takes to navigate the employment market . . . Rules changed for catch-up contributions to 401(k) accounts . . . Helping seniors avoid scams and financial errors . . . How are you aging? Try these simple tests . . . Sick of fighting insurance companies, hospitals offer their own Medicare Advantage plans.

More people are saving for retirement than ever before - and they’re saving more. But health care costs in retirement are soaring, and and poverty rates among older Americans are rising for the first time in decades.

The competing trends sum up the state of retirement as we enter 2026. The United States is aging rapidly - by 2030, one in five Americans will be 65 or older, and that shift is reshaping large swaths of the U.S. economy, from labor force participation rates to retirement savings, Social Security and Medicare outlays, health care spending, housing and financial services. Retirement has become one of the largest — and fastest-growing — forces in the economy.

But aging in America is unfolding unevenly. Wealth inequality, gaps in retirement plan coverage, and rising health and long-term care costs mean that some households are enjoying remarkable financial security in retirement, while others are struggling to afford it at all. And poverty rates among older Americans are rising — making them the only age group to see an increase in recent years.

In my latest Retiring column for the New York Times (gift link), I spotlight seven numbers that help explain some of the key trends shaping retirement.

Read the column

Social Security’s 800 number slower than agency data suggests

The Social Security Administration’s publicly-reported customer service data paints a portrait of improving service - despite the chaos created by DOGE last year and continuing declines in staffing. But that portrait is incomplete. The SSA has reduced the data it reports, and in at least one case has demonstrably cooked the numbers.

That surfaced in a report released just before Christmas by the agency’s Office of the Inspector General. The OIG was asked by Sen. Elizabeth Warren (D-Mass.) to audit the SSA’s 800 phone line performance. The top-line finding is that the agency’s reported data is accurate. But the chart above from the audit report explains much of the 800 number’s supposed “improved” performance.

Typically, when you call into an 800 customer service number, you’ll be offered the option to hang up and wait for a callback when an agent becomes available, rather than holding. Nothing wrong with that - it can be a convenient option. But it does not mean you’re not waiting for service.

The SSA’s 800 number offers this option, but last summer it stopped reporting callback waiting times. Instead, it focuses on the “average speed of answer,” which was 15.9 minutes last year, compared with 27.9 minutes the previous year. But this figure includes people who opted for a callback - the agency counts that call as immediately answered with a wait time of zero. That accounting choice sharply lowers the average.

As you can see in the chart above from the OIG report, the callback times have fallen over the past year substantially - but folks still are waiting close to an hour on average.

The Washington Post reports that the broader customer service situation at the SSA has continued to deteriorate under the Trump administration. The most vulnerable people face the biggest obstacles - consider this heart-breaking account reported by the paper:

As the backlogs keep building, [one field office employee] is taking calls from 25 or so people every day, knowing that she won’t be able to help five or six of them. These are elderly people, often poor or bedridden, who have no way to comply with the change requiring that direct-deposit actions take place in person or online. Usually they’re calling because something has happened to their bank accounts and they need to alter their financial information. But they can’t access a computer, the employee said, and driving is out of the question.

She received a call this month from a 75-year-old man who had suffered a massive stroke that left him unable to drive. He’d also had to switch banks and, as a result, hadn’t received Social Security checks for the last two or three months.

“I had to sit there on the phone and tell this guy, ‘You have to find someone to come in … or, do you have a relative with a computer who can help you or something like that?’” she recalled. “He was just like, ‘No, no, no.’”

She ended that call by telling the man to call his bank, hoping they might be able to help when her agency, hampered by administration policies, no longer could.

But the chaos at SSA is impacting more routine transactions -as I can attest. Late last year, I assisted my wife with her transition from workplace insurance to Medicare. We filed her paperwork in early November, indicating a January 1st start date. But no confirmation letters had arrived by mid-December, so we wound up making three phone calls to the 800 number, waiting an hour or more in each case to speak to an agent.

One agent recommended we try to reach our local field office, but those calls just bounced back into the national system. We finally reached a field office employee in Florida on a Friday who was able to determine that the application was all but done, and for some reason was stuck in the computer system. The application needed to be pushed to SSA’s payment processing center - which she promised to do the following Tuesday - the day of the week when such transactions can be processed. We were worried that we would not hear back - but sure enough, she called the following Tuesday to confirm that the application was processed, and coverage would begin on January 1st.

And that just about sums up the state of the SSA these days. There’s a deeply dedicated workforce laboring under extraordinarily difficult conditions.

Another aspect of the OIG customer service audit is the remarkable propaganda generated by the SSA about the report, which reads like something a North Korean press office would have been proud to issue:

“The results of the audit come as no surprise to anyone following the historic progress we are making at the agency under President Trump’s leadership,” said Commissioner Frank J. Bisignano (emphasis theirs). “We are serving more Americans at significantly faster speeds than ever before. While partisan politicians are attempting to undermine trust of SSA, we are determined to continue improving customer service online, on the phone, and in person at field offices.” ….

…Commissioner Bisignano continues to transform SSA into a model of excellence—an organization that operates at peak efficiency, delivers world-class service to every American, and protects and strengthens Social Security for future generations . . .

I’ve been covering Social Security for nearly two decades, and I cannot recall another instance of this sort of official self-aggrandizement by a commissioner. The agency’s public communications have never been so politicized as they are today. That kind of political spin undermines public trust just as much as manipulating the data itself.

What I’m reading

Older adults quit weight-loss drugs in droves . . An under-used tax-free investment account amps up this year . . . Pharmacies flood Medicare patients with billions in excessive prescription drugs . . . TIPS are on sale . . . What a longevity expert eats every day . . . Higher SALT cap could mean tax savings in high-cost parts of the country . . . The neuroscience of why you can’t pretend anymore . . . A dealmaking wave is underway in the wealth management business . . . Should I feel bad about joining a concierge medical practice?

This morning’s newsletter offers you a special discount on my book, Retirement Reboot. I neglected to mention that, in order to take advantage of the discount, you’ll need to use this code at checkout:

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When that happens, the consequences for retirement security can be severe. Lost wages can force disabled workers to burn through their savings and claim Social Security as early as age 62, locking in permanently lower benefits instead of the higher payments that come with waiting.

There is, however, an important alternative. Older workers who become disabled can apply for Social Security Disability Insurance, which replaces a substantial share of the retirement benefit they would otherwise receive later.

While retirees make up the largest group of Social Security beneficiaries, SSDI serves a significant population—about 8.2 million people with physical impairments or conditions such as intellectual or mental disorders. Roughly three-quarters of those beneficiaries are age 50 or older, and many have low incomes. For them, disability benefits often act as a bridge to retirement, keeping a large share out of poverty.

But the program is at a turning point. Applicants have long faced extremely long waits for decisions, and policymakers have been debating how best to modernize the process Social Security uses to determine eligibility.

That debate moved into public view recently, with reports that the Social Security Administration had paused work on a plan to overhaul the disability application system. The proposal would have updated an outdated database the agency uses to determine whether jobs exist that an applicant could perform. At the same time, it would have made it harder for people over age 50 to qualify.

Some experts expect the agency to return to the project eventually, particularly the long-overdue update to the jobs database.

But one part of the proposal raised serious concerns: it would have increased the age at which age is considered in disability decisions from 50 to 60. Disability experts warn that such a change would lead to more denials for older, vulnerable workers who have few realistic options left in the labor market.

My latest “Retiring” column for The New York Times explores the policy debate on SSDI - and the potential winners and losers.

Read the column

Social Security plans to cut field office visits by 50%

The Social Security Administration is planning to cut visits to its field offices in half next year, according to internal agency documents. The agency has been nudging people for years to do more business online. But a reduction this large would leave many Americans with few good options for dealing with Social Security.

The people most likely to feel the impact are those with complicated cases—especially anyone applying for Social Security Disability Insurance or Supplemental Security Income. These are situations where online forms and portals often fall short, and where in-person help really matters.

The plan also seems to run in the opposite direction of an announcement the agency made in March. At that time, Social Security said that new and existing beneficiaries who couldn’t use its online system would need to visit a field office to verify their identity. It’s hard to see how that requirement squares with cutting office visits by 50%.

It’s not yet clear how Social Security would pull this off. The agency could close offices, cut back hours, or make it harder to get an appointment. But the bottom line is simple: when it becomes harder to access benefits, fewer people end up receiving them. In real terms, that functions as a benefit cut.

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What I’m reading

Enforcement is rare when Medicare Advantage enrollees complain about networks . . . How my retirement savings are betraying America.

Last week, I reported on the very large Part B premium hike for 2026, which is close to 10%. Today, I explored the underlying causes for the increase in a story for The New York Times.

Next year marks the first time the monthly Part B premium will exceed $200 — and it will be 66% higher than a decade ago. The annual Part B deductible will be $283 - up 70.5% over the past 10 years.

In part, this reflects general increases in the cost of health care. National health expenditures rose about 8% in 2024, federal data shows, and are expected to outpace gross domestic product growth over the coming decade. Another cause for the rising Part B costs is a shift in health care delivery from hospitals to outpatient settings.

The growth of Medicare Advantage plans — which now account for more than half of total enrollment — plays a role as well. Medicare spends about $80 billion more annually for Medicare Advantage enrollees than it would if they were enrolled in traditional Medicare, leading to higher spending for both Part A (which covers hospitalization) and Part B.

Are Advantage plans a good deal for enrollees? Yes and no.

Many Advantage plans reduce upfront costs by wrapping in prescription drug coverage. They also include out-of-pocket caps ($5,320 this year for in-network services) without the need to pay for a Medigap policy. The trade-offs are provider network limitations and the frequent red-tape hassles with coverage approvals (prior authorizations).

There’s also an important equity issue here. All Part B enrollees are bearing the upward pressure on premiums from these Advantage overpayments - and so do taxpayers. Yet the benefit goes to about half of Medicare beneficiaries. That flies in the face of the foundational architecture of social insurance.

Handling the higher prices

A few thoughts on how to minimize the hit of rising Medicare costs:

• Don’t miss the opportunity to review your Part D drug prescription coverage during fall enrollment, which ends on December 7th. See my write-up on the current marketplace landscape here.

• Federal programs can help low-income seniors. Medicare Savings Programs cover premiums and out-of-pocket costs for low-income seniors and automatically enroll them in the Low Income Subsidy program for Part D prescription drugs. Yet only about 60 percent of eligible seniors participate, often because they are unaware of the programs or find enrollment complex.

• Wealthier seniors face the additional expense of surcharges through the Income-Related Monthly Adjustment Amounts, known as IRMAA. The income levels that trigger the surcharges are calculated from the modified adjusted gross income on your tax return. Next year, IRMAA charges begin for single filers with modified adjusted gross income above $109,000 and joint filers above $218,000 — they will pay an extra $81.20 per month, with smaller IRMAA charges added to Part D premiums. There are four additional brackets for seniors with even higher incomes. But did you know you might be able to appeal? IRMAA is based on tax returns from two years prior, but Social Security will recalculate for qualifying “life-changing events,” including retirement. To file an appeal, use Form SSA 44.

Claim Social Security early, invest it in stocks?

It’s a recurring theme in the never-ending debate about when to claim Social Security: take it early and invest your benefits in the stock market. The argment is that you can beat the roughly 8% increase in monthly Social Security benefits you’ll get for every 12 months of delay by claiming at 62 and ploughing it all into the stock market. Readers have been suggesting this to me for years, and I always find it an amusing apples-to-oranges suggestion. It’s having a moment right now on social media, notes Jason Zweig of the Wall Street Journal. His conclusion: it’s not a good strategy in most cases.

Here’s the problem: You can’t really compare the possible benefit of delayed claiming vs. stock market returns. One of these returns (Social Security) is risk-free, and the stock market is not. You’re guaranteed to get that 8% return on delayed claiming, and of course you can’t say the same about the stock market. That’s especially true during any short span of years, when your portfolio could be fluctuating or falling.

Social Security is the cheapest way to buy an annuity that provides protection against longevity risk - that is, the risk that you’ll outlive your money. In some cases, it also serves as a sort of long-term care insurance that can be used to pay for care. That’s a strong argument for maximizing your benefit level through delayed claiming - especially when you consider the unique automatic annual inflation adjustment to benefits

Delayed claiming isn’t right for everyone - there can be good reasons to claim early. But playing with your benefits in the stock market isn’t one of them.

The standard Medicare Part B premium will jump nearly 10% next year. This will be the third consecutive year that the premium increase has outpaced general inflation - a trend that reflects higher healthcare costs and utilization - but also the ongoing, unwarranted overpayments to Medicare Advantage plans.

The standard premium next year will be $202.90 - an increase of $17.90, or 9.68%. The annual Part B deductible will increase $26, to $283.

The Centers for Medicare & Medicaid Services released the number on Friday, along with information on Part A deductibles and high-income premium surcharges. You can find the full set of figures on the CMS website.

The Medicare trustees had forecast an 11.6% Part B increase, or $21.54. According to CMS, the somewhat smaller increase was achieved through a crackdown on abusive spending by health care providers on expensive bandages made from “skin substitutes.” The New York Times investigated this problem back in April of this year:

Seniors across the country are wearing very expensive bandages.

Made of dried bits of placenta, the paper-thin patches cover stubborn wounds and can cost thousands of dollars per square inch.

Some research has found that such “skin substitutes” help certain wounds heal. But in the past few years, dozens of unstudied and costly products have flooded the market.

Bandage companies set ever-rising prices for new brands of the products, taking advantage of a loophole in Medicare rules, The New York Times found. Some doctors then buy the coverings at large discounts but charge Medicare the full sticker price, pocketing the difference.

Partly because of these financial incentives, many patients receive the bandages who do not need them. The result, experts said, is one of the largest examples of Medicare waste in history.

Spending on these products totaled over $10 billion in 2024, and new Medicare payment rules will curtail the payments sharply starting next year.

Medicare sets the Part B premium by projecting overall outpatient program costs for the coming year; the premium covers 25% of those costs.

The Part B premium, which covers outpatient services, is just one component of senior health spending. But it’s a closely watched number for many, because it typically is deducted from Social Security checks. That means the meaningful COLA number isn’t your gross increase, but how it nets out after Part B is deducted.

The Part B increase alone will consume a substantial part of the 2.8% COLA next year for many retirees.

The math here is straightforward: The dollar increase for Part B reduces the dollar amount of your COLA. The impact is lower for people with higher Social Security benefits, and very substantial for people with lower benefits.

Here’s a (rather primitive) table I created to calculate the interaction of the COLA and Part B premium hikes. The column on the far right shows you the “net COLA” percentage figure at various benefit levels after the Part B dollar increase is applied (in this case, $17.90 per month).

Part B premium increases have been all over the map during this decade. There was an outlier 14.5% hike announced for 2022 because of the expected high cost of covering Aduhelm, a new Alzheimer’s drug. Medicare ultimately decided not to cover the drug and gave back the increase the following year, lowering the premium by 3%. Increases announced for 2024 and 2025 were both around 5.9%.

Here’s what the trend looks like over the past couple decades:

Why the sharp upward spike in premiums? One reason is the growth of Medicare Advantage plans, which are paid $83 billion more in “bonus payments” than they Medicare would have spent on comparable beneficiaries in traditional Medicare, according to the Medicare Payment Advisory Commission, an independent organization that advises Congress on Medicare.

The other reason for the premium increase is general Medicare spending growth, driven by higher utilization and higher prices.

Affluent seniors will shoulder the higher costs without much trouble. Not so for low-income seniors, who struggle to meet basic living costs. That’s the most infuriating thing about the Republican targeting of the Medicare Savings Program in the budget bill they passed earlier this year. That law - commonly known as the “One Big Beautiful Bill,” suspended a requirement that states adopt a Biden-era plan to increase enrollment in state-run Medicaid programs that help seniors who qualify get a hand paying for out-of-pocket Medicare costs. That plan would have widened enrollment in Medicare Savings Programs by reducing the paperwork needed to sign up. Only about 60 percent of eligible seniors are enrolled in the program because they aren’t aware of them, and the plans have complex enrollment requirements.

The rule suspension will help offset the cost of tax cuts for the wealthy contained in the OBBA.

Fall Medicare enrollment

There’s not much you can do about the Part B increase - but you may be able to control your total Medicare costs next year by doing a check-up on Part D prescription drug costs. The annual fall enrollment period is underway now, and runs through December 7th.

Insurance companies are permitted to boost Part D premiums as much as $50 next year. Increases of that size are not popping up across the board, according to research by KFF, although some of the most popular plans will charge higher premiums. I discussed how to shop the Part D market in a recent New York Times “Retiring” column.

What I’m reading

New contribution limits for 401(k) and IRA accounts have been announced for 2026 . . . Why a dementia village in the Netherlands is fueling hope in D.C.

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