The Social Security check of a recently retired Texas individual shocked the nation on Tuesday when a $1,221 Medicare deduction wiped out his expected 2026 Cost-of-Living Adjustment (COLA). The situation revealed considerable disparities in public knowledge regarding Medicare premium dynamics and income-based surcharges.
The shocking moment of the first retirement check
John Anderson (alias), 67, anticipated his $2,800 monthly benefit to rise 2.5% ($67) under the 2025 COLA. Instead, it fell to $1,646—a net loss of $1,154. The Social Security Administration (SSA) withholding notice had a $1,221 deduction labeled “Medicare Premium Adjustment,” leaving Anderson perplexed: “They’re withholding more than my COLA increase. Is this legal?”
This follows record-breaking Medicare Part B premiums, which jumped to $185/month in 2025 (+6% from 2024). Anderson’s deduction is considerably higher than ordinary rates but points the finger at two probable suspects: Income-Related Monthly Adjustment Amounts (IRMAA) and retroactive charging of premiums.
The IRMAA factor: When past earnings haunt retirement
Medicare bases IRMAA surcharges on two-year-old tax returns, something most retirees have no knowledge of. Anderson’s 2023 MAGI was well above $106,000 (single) or $212,000 (joint), triggering tiered surcharges.
| Individual MAGI | Monthly Premium | Surcharge |
| ≤ $106,000 | $185 | $0 |
| $106,001–$133,000 | $259 | +$74 |
| $133,001–$167,000 | $370 | +$185 |
| $167,001–$200,000 | $480.90 | +$295.90 |
| $200,001–$500,000 | $591.90 | +$406.90 |
| ≥ $500,000 | $628.90 | +$443.90 |
2025 Part B IRMAA brackets
Anderson, if he earned $200,000 in 2023, would owe $591.90/month—$406.90 above baseline —in 2025 premiums. For 12 months, that comes to a $4,882.80 yearly obligation. The $1,221 deduction shows SSA is cutting a three-months’ worth of back premiums from delayed IRMAA processing.
The retroactive premium trap
SSA’s POMS HI 00805.195 policy enables recovery up to six months of retro premiums when Medicare enrollment processing is delayed. Anderson’s case illustrates that example:
- He probably signed up for Medicare at age 65 but postponed coverage in Part B
- SSA signed him up later automatically and generated back premiums
- The agency withheld three months’ worth of past-due premiums ($591.90 × 3 = $1,775.70)
- His $1,221 payment is only an installment collection, with more withholdings forthcoming
“This isn’t a glitch—it’s business as usual when catching up on late enrollments,” says Medicare analyst Lisa Carter. “Beneficiaries often confuse these lump-sum deductions as errors instead of system corrections.”
COLA’s stealth tax bracket hike
The 2025 COLA’s 2.5% increase accidentally pushed some retirees into higher levels of IRMAA. For each $1,000 in COLA increases:
- Single filer at $105,000 MAGI gets pushed into the $106,001–$133,000 bracket
- Triggers an automatic $888 yearly surcharge (+$74/month × 12)
- Net benefit reduction by $288 regardless of the increase
“This clawback effect unfairly punishes middle-income retirees,” says The Senior Citizens League. “COLA increases nominal income but does not account for Medicare’s fixed limits.”
Fixing the “Bizarre” deduction
Anderson’s solutions are in line with what 230,000 Americans go through with such shock every year:
- Request a reconsideration: Submit Form SSA-44 if 2023 income was lowered due to retirement/life changes
- Payment plans: Negotiate installment payments for huge back premiums
- Part B Opt-out: End coverage in 2 months if there is other insurance
“Always cross-check the notice date with the two-year lookback period of the IRS,” advises SSA spokesperson Maria Gonzalez. “A 2025 premium based on 2023 income can sometimes be appealed with updated financial information.”
Important takeaways for beneficiaries
- Medicare = Free at 65: Even with 40 work credits, Part B/D cost premiums
- IRMAA goes back to historical Levels: 2025 premiums from 2023 tax returns
- COLA can punt you into something unintended: Increases in benefits can push you into higher levels of surcharges
- Act immediately on notices: SSA gives 60 days to appeal deductions
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