Medicare 2026

Social Security Overpayments in 2026: What the 50% Default Withholding Means for Your Medicare Premium

If you receive Social Security and Medicare, a change that took effect in 2025 is worth understanding before a letter ever lands in your mailbox. The Social Security Administration (SSA) now withholds a much larger share of your monthly benefit by default when it says you were overpaid. Here is what the rule says, what still protects your Medicare Part B coverage, and the steps you can take if a notice arrives.

What changed in 2025

Under SSA's Emergency Message EM-25029 REV, effective August 28, 2025, overpayment notices sent on or after April 25, 2025 default to withholding 50 percent of the monthly Social Security (Title II) benefit — not the prior 10 percent — in cases without fraud or similar fault. SSA keeps withholding at that rate until the overpayment is fully recovered.

Overpayments that were already noticed before April 25, 2025 stay at the 10 percent rate, with one important catch: if you incur a new overpayment, all your outstanding overpayments default to the 50 percent rate once withholding for the new one begins, unless you separately negotiate a lower rate.

The 50 percent default does not apply to Supplemental Security Income (SSI) overpayments. SSI stays at a 10 percent recovery rate.

Your Medicare Part B premium is protected

This is the piece that most directly touches Medicare. Under SSA's rules, when your benefits are withheld to recover an overpayment, your Medicare Part B premium is deducted before any amount is held back for the overpayment. In plain terms: Part B comes out first, the overpayment collection comes out of what remains. The point is to make sure you don't lose Part B coverage while receiving a reduced check.

So if your Social Security check normally covers your Part B premium automatically, that automatic payment keeps happening even if a 50 percent withholding is in place.

You have time to act before withholding starts

SSA does not begin withholding immediately. Its instructions set the recovery start date so that you have at least 60 days to appeal before any money is held back. During that window you have three main options, and you can use more than one:

• Request reconsideration if you disagree that you were overpaid or disagree with the amount.
• Request a waiver if you believe the overpayment wasn't your fault and paying it back would cause hardship or be unfair.
• Request a lower withholding rate if you agree you were overpaid but can't afford to lose 50 percent of your benefit.

If you ask for reconsideration or a waiver, SSA stops collecting until it decides. Note, however, that under SSA's regulations, if a waiver is denied, recovery begins even if you appeal that denial.

How a waiver works

You can request a waiver at any time, even after collection has already started. SSA may waive recovery when you were not at fault and recovery would either defeat the purpose of the Social Security Act or be against equity and good conscience, among other grounds.

A written waiver request uses Form SSA-632-BK. If the overpayment is $2,000 or less, you don't need that form — a simpler request is enough.

How a lower repayment rate works

If you accept that you were overpaid but 50 percent of your check is too much, you can negotiate:

• SSA first tries to set a rate that would pay the debt back within 12 months, with a minimum of $10 a month. For this, you don't have to submit income, resource, or expense information.
• If a 12-month payoff isn't workable, SSA negotiates a rate that pays it off within 60 months.
• Only if you need more than 60 months do you have to file Form SSA-634 and provide financial details.

Notices aren't always right — read yours carefully

A September 2026 audit by SSA's Office of the Inspector General (report 152407) found that SSA issued policy-compliant overpayment notices for 54 percent of the overpayments reviewed, but not for 46 percent. The most common problems were missing explanations of how and when the overpayment happened, missing language about your right to request reconsideration or a waiver, inaccurate overpayment amounts and reasons, and conflicting language within the notice. SSA agreed with the OIG's recommendations.

The practical takeaway: don't assume the number in the notice is correct, and don't assume the notice fully explains your rights. If something seems off, that is itself a reason to call SSA and consider requesting reconsideration.

Why this matters for your 2027 Medicare planning

A reduced Social Security check can tighten the budget you use to pay for Part D drug coverage and any supplemental coverage you carry. A few program-level facts worth knowing as you plan:

• The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027.
• The most any Part D plan may charge as a deductible in 2027 is $700.
• The Part D base beneficiary premium used to calculate the late-enrollment penalty for 2027 is $41.33; actual plan premiums are set plan by plan.
• Annual Enrollment for 2027 runs October 15 – December 7, 2026, with choices effective January 1, 2027.
• SSA announced a 3.6 percent cost-of-living adjustment for benefits payable beginning January 2027.

The 2027 Part B standard premium and deductible, and the IRMAA income brackets, had not been announced at the time of writing. CMS typically announces them in the fall. Watch Medicare.gov for the official figures rather than relying on estimates.

If you're weighing coverage options for 2027 — for example, Original Medicare paired with a Part D plan and possibly a Medigap policy, versus a Medicare Advantage plan that bundles drug coverage — each path has trade-offs around cost predictability, provider choice, and extra benefits. There is no one-size-fits-all answer; the right fit depends on your doctors, your medications, and your budget.

If you have Medicaid or Extra Help

Since 2025, people with Medicaid or Extra Help have a monthly Special Enrollment Period to move to Original Medicare with a stand-alone Part D plan, or to switch stand-alone Part D plans. Full-benefit dual-eligible individuals can also join an integrated Dual Eligible Special Needs Plan (D-SNP) in any month. That flexibility can be especially useful if a sudden change in your Social Security check prompts you to rethink coverage.

Where to go next

• For overpayment questions — appeals, waivers, or asking for a lower withholding rate — contact SSA directly.
• For Medicare coverage questions, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227), available 24 hours a day, 7 days a week.

Reading the notice carefully, acting within the 60-day window, and knowing that your Part B premium is protected first can turn a stressful letter into a manageable set of decisions.