How will the 2026 SSDI rules impact people receiving both SSDI and Medicare or Medicaid?
Executive summary
The 2026 COLA will raise Social Security (including SSDI) benefits by 2.8%, about $56 a month on average, but rising Medicare costs — notably a jump in the standard Part B premium to $202.90 — will eat into that increase for many beneficiaries [1] [2] [3]. People who get SSDI and are under 65 normally gain Medicare after a 24‑month waiting period, but they can lose both SSDI and the Medicare tied to it if their earnings exceed the 2026 substantial gainful activity (SGA) limit of $1,690 per month [4] [5].
1. What the headline numbers mean for SSDI recipients
The Social Security Administration announced a 2.8% COLA for 2026 that applies to SSDI recipients as well as retirees and SSI beneficiaries; SSA says 75 million people will see the increase and nearly 71 million beneficiaries will begin receiving it in January 2026 [1]. The average dollar uplift often quoted is about $56 a month for retirement beneficiaries; reporting ties that average to the same 2.8% adjustment SSDI recipients will receive [2] [1].
2. Medicare premium hikes blunt the COLA — often deducted automatically
CMS set the standard Medicare Part B premium for 2026 at $202.90, a $17.90 rise from 2025, and the Part B deductible will also increase — moves analysts say will substantially reduce the effective net gain from the COLA because Part B premiums are commonly taken out of Social Security checks [2] [3] [6]. Multiple outlets calculate that for an average beneficiary the higher Part B premium will consume a large portion of the $56 average COLA in 2026 [3] [7].
3. How people who receive both SSDI and Medicare are specifically affected
People who get SSDI and have Medicare because of their disability will see their SSDI benefit go up with the 2.8% COLA, but many of them will also face higher Medicare costs that reduce their net monthly increase, the same dynamic that affects older beneficiaries [1] [6]. Importantly, those under 65 who are on SSDI receive Medicare only because they qualify for disability; if they return to work above the SGA threshold they risk losing SSDI and the Medicare that’s tied to it [4] [5].
4. The earnings‑loss cliff: SGA and the risk of losing both SSDI and Medicare
SSA defines “substantial gainful activity” as a monthly earnings threshold above which disability benefits can be terminated. The SGA limit for 2026 is $1,690 per month for most SSDI beneficiaries and $2,830 for beneficiaries receiving disability due to blindness [4]. If an SSDI recipient’s earnings exceed SGA and they no longer qualify for SSDI, they generally lose the Medicare coverage they have because it hinges on ongoing SSDI eligibility for those under age 65 [5].
5. Low‑income beneficiaries and Medicaid interactions
Available sources note that Medicaid can play a role while people wait for Medicare or to help cover premiums and out‑of‑pocket costs through state Medicare Savings Programs; SSA points readers to Medicare.gov and state/local Medicaid offices for details [8]. Specific 2026 changes to Medicaid eligibility, enrollment, or state actions are not detailed in the current reporting — not found in current reporting.
6. Practical steps beneficiaries should consider now
Journalists and analysts quoted urge beneficiaries to check their my Social Security message center for exact 2026 benefit amounts and to review Medicare options during open enrollment, including Medicare Advantage or Part D plan changes, because plan choice and automatic premium deductions can alter net outcomes [9] [2]. Analysts also recommend budgeting for the higher Part B premium and deductible and checking whether you face an income‑related Part B surcharge (IRMAA), which depends on prior tax returns [3] [10].
7. Competing narratives and policy context
Coverage is consistent that the COLA increases nominal benefits while Medicare cost increases reduce net gains [1] [2] [6]. Some outlets emphasize the squeeze on fixed incomes and call the net effect effectively a pay cut for low‑income beneficiaries; others frame it as an expected mechanics of two linked federal programs [11] [12]. Sources do not, however, provide alternative federal policy changes for 2026 that would offset the premium hikes — available sources do not mention such offsets.
Limitations: this analysis relies on the cited reporting and agency releases; it does not include state‑level Medicaid rule changes beyond SSA’s general guidance and does not attempt to compute individual net impacts beyond the average figures published by these sources [8] [1].