New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Navigating Rising Medicare Costs: A UPS Employee’s Guide

Healthcare Provider Update: Healthcare Provider for UPS: UPS is served by the UPS Health and Wellness Program, which provides a range of health benefits through various partnerships with healthcare providers and facilities aimed at supporting the well-being of its employees. Potential Healthcare Cost Increases in 2026: As 2026 approaches, healthcare costs are anticipated to surge significantly, primarily driven by the expiration of enhanced federal premium subsidies and rising medical expenses. Many states are facing projected premium increases, with some exceeding 60%. This scenario poses a daunting challenge as over 22 million Marketplace enrollees-92% of policyholders-could experience out-of-pocket premium hikes surpassing 75%. With insurers anticipating aggressive rate hikes and a landscape already strained by increased healthcare utilization, families and individuals will need to navigate these financial pressures carefully to maintain access to necessary healthcare services. Click here to learn more

“In light of projected Medicare Part B premium increases, UPS employees should proactively adjust their retirement income projections and consult with a financial advisor to address rising health care expenses.” – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

“In anticipation of significant Medicare Part B premium hikes, UPS employees would benefit from integrating health care cost projections into their retirement plans and seeking guidance from professional advisors on potential relief strategies.” – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

The upcoming Medicare Part B premium increase and its impact on retirement budgets.
How Medicare Part B is funded and how COLA adjustments compare to premium hikes.
Strategic planning tips to help UPS retirees manage rising health care costs.

There will soon be a significant shift in Medicare expenses that could affect your retirement budget. According to the 2025 Medicare Trustees Report, the average Part B premium will jump by 11.6%—rising from $185 in 2025 to $206.50 in 2026 ¹ —outpacing most Social Security cost of living adjustments (COLA) over the last decade. UPS employees should begin factoring this increase into their long-term financial plans.

Benefit Structure for Medicare Part B

Outpatient and preventative care are covered under Part B, including:

- Cancer screenings, diagnostic procedures, and doctor visits
- Durable medical equipment and mental health counseling
- Prescription medications for outpatients and ambulance transportation
- Skilled nursing services and home health care

In 2025, beneficiaries must pay a $185 monthly premium, a $257 annual deductible, and a 20% co-insurance on most services—important information for any UPS retiree’s annual budget.

History of Premiums (2015–2025)

Year	Standard Premium	Dollar Change	Percentage Change
2015	—	—	—
2016	$121.80	+$16.90	16.1%
2017	$134.00	+$12.20	10.0%
2018	$134.00	+$0.00	0.0%
2019	$135.50	+$1.50	1.1%
2020	$144.60	+$9.10	6.7%
2021	$148.50	+$3.90	2.7%
2022	$170.10	+$21.60	14.5%
2023	$164.90	–$5.20	–3.1%
2024	$174.70	+$9.80	5.9%
2025	$185.00	+$10.30	5.9%

The 2022 increase—a 14.5% rise driven by higher drug costs and pandemic-related utilization—served as a warning sign that’s echoed in the projected 2026 jump.

Estimated Premiums (2026–2034)

Year	Estimated Premium	Dollar Growth	Percentage Growth
2026	$206.50	+$21.50	11.6%
2027	$218.60	+$12.10	5.9%
2028	$231.30	+$12.70	5.9%
2029	$247.40	+$16.10	5.8%
2030	$264.70	+$17.30	7.0%
2031	$281.60	+$16.90	6.4%
2032	$300.80	+$19.20	6.8%
2033	$325.90	+$25.10	7.0%
2034	$347.50	+$21.60	6.6%

Part B premiums alone could approach $350 per month by 2034—a 231% increase since 2015—underscoring why UPS retirees should plan now to mitigate long-term budget shocks.

The Funding Mechanisms

There are two primary sources of funding for Medicare Part B:

1. 75% from general U.S. Treasury revenues

2. 25% from premiums paid by beneficiaries

Premium income reached $139.8 billion in 2024, ² with additional support from brand name drug fees and trust fund interest—details that UPS retirees may find crucial when reviewing their future health care funding.

Cost of Living Adjustments vs. Premium Increases

In 2026, the “hold harmless” provision that protects most Social Security benefits from Part B hikes may not apply. The anticipated 2.5% Social Security COLA—roughly $50 per month—still falls short of the $21.50 premium increase. Only recipients with monthly benefits under $800 will see any net gain, so UPS employees relying on Social Security should plan for most of their increase to be offset.

Strategic Planning Tips

To manage rising health care costs, UPS employees should consider the following proactive steps:

Forecast Health Care Inflation: Incorporate rising out-of-pocket costs and premiums into your annual budgeting.
Compare Plans Online: Use the official Medicare Plan Finder to evaluate alternatives beyond agent recommendations.
Manage IRMAA Exposures: Employ tax-sensitive strategies—such as income smoothing withdrawals—to help limit future surcharges.
Explore Local Tax Relief: Research state and municipal programs offering property tax exemptions or rebates for seniors.
Stress-Test Your Retirement Portfolio: Model health care inflation scenarios over multiple decades and adjust allocations to safeguard purchasing power.

Extended Consequences

By 2034, annual Part B costs alone could top $3,000–$4,000 if current trends persist—one of the fastest rising expense categories for retirement households. UPS retirees who plan early can navigate budgetary shocks to help maintain their lifestyle goals.

According to Wealth Enhancement’s Patrick Ray, this premium surge ranks among the steepest retirement cost increases, and prudent investors must factor health care inflation into their retirement forecasts to mitigate unwelcome surprises.

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Sources:

1. USA Today. ' Social Security 2026 COLA estimated at 2.7%, but much of it will go to Medicare Part B ,' by Medora Lee. 17 July 2025.

2. Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. ' 2025 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds ,' U.S. Department of Health and Human Services, 18 June 2025.

Other Resources:

1. Kaiser Family Foundation. “ FAQs on Medicare Financing and Trust Fund Solvency .” Kaiser Family Foundation, 15 June 2024.

3. Urban Institute. “ Applying a Premium Cap in Medicare Part B and Part D .” Urban Institute, Mar. 2023.

4. “ Social Security’s 2026 COLA: Recipients Could Get More Money Next Year .” LiveNOW from FOX, 15 June 2025.

5. Kiplinger Staff. “ Medicare Premiums 2026: Projected IRMAA Brackets and Surcharges for Parts B and D .” Kiplinger, 26 June 2025.

How can employees take full advantage of the retirement benefits offered by UPS, including the pension plan enhancements implemented in 2024, and what specific eligibility criteria must they meet to secure these benefits? In your experience, how have changes in the UPS pension plan over the years, especially the recent increases to service pension benefits, impacted the financial planning of UPS employees nearing retirement?

To fully take advantage of the UPS retirement benefits, including the pension plan enhancements implemented in 2024, employees must meet specific eligibility criteria, such as length of service and retirement age, which are outlined in the company's pension plan documents. Recent increases in service pension benefits, particularly for employees nearing retirement, have allowed UPS workers to better secure their financial future, giving them a more stable foundation as they transition out of the workforce. These changes have made financial planning more predictable for those close to retirement.

What are the steps that part-time employees at UPS need to follow to transition to full-time status, and how does this transition affect their eligibility for the UPS Pension Plan? Additionally, can you outline how the accrual of Credited Service works for both part-time and full-time UPS employees under the current plan rules?

Part-time employees at UPS must follow an established process to transition to full-time status, often based on seniority, availability, and performance reviews. Once they transition to full-time, their eligibility for the UPS Pension Plan improves, allowing for faster accrual of service credits. Accrual of Credited Service for part-time employees is typically prorated based on the hours worked, while full-time employees accumulate service credits more quickly, based on a 40-hour workweek under the current plan rules.

Considering the rise in healthcare costs, what healthcare options are available to UPS employees upon retirement, and how do the TeamCare plans differ between full-time and part-time retirees? How does the retiree medical coverage through TeamCare ensure that UPS employees maintain health insurance access without significant financial burden after retirement?

UPS offers comprehensive healthcare options through TeamCare for retirees, which vary for full-time and part-time employees. Full-time retirees generally receive more extensive coverage, while part-time retirees may have more limited options. TeamCare ensures that UPS retirees have access to affordable healthcare coverage post-retirement by providing plans designed to reduce the financial burden of rising healthcare costs, helping retirees maintain health insurance with manageable out-of-pocket expenses.

How does the UPS pension plan accommodate employees who have worked in multiple states or for different employers within the Teamsters system? What provisions are in place to ensure that their service credits are recognized and valued, particularly for those who may approach retirement age with a patchwork of employment history?

The UPS pension plan accommodates employees who have worked in multiple states or for different employers within the Teamsters system by recognizing their service credits across various jurisdictions. This ensures that even employees with patchwork employment histories can count their service toward pension eligibility, helping them qualify for retirement benefits despite moving between employers or locations within the Teamsters network.

What specific provisions exist for retirees at UPS who may choose to return to part-time employment post-retirement? Can you detail how this affects their pension benefits and any other retirement-related income they might receive, alongside UPS's policies regarding reemployment for retirees?

UPS retirees who choose to return to part-time work after retirement can do so under certain conditions without affecting their pension benefits. However, there may be limits on how much they can work without reducing their pension income. UPS’s policies on reemployment allow retirees to maintain some of their retirement-related income while taking on part-time roles, ensuring financial stability alongside continued employment.

How can employees at UPS navigate the process of filing a grievance if they feel their retirement benefits have not been administered fairly? What are the resources available to them, and how does the grievance procedure relate to the overall benefits they receive under the UPS pension and welfare plans?

If employees feel their retirement benefits have been unfairly administered, they can file a grievance through the UPS grievance procedure. This process often begins with discussions between the employee and management, with the option to escalate the issue to the union for formal dispute resolution. Resources such as union representatives and detailed plan documents are available to help employees navigate these disputes under the UPS pension and welfare plans.

With the introduction of new benefit contribution rates in 2024, how do these changes reflect UPS's commitment to its employees' financial futures? In what ways are employees encouraged to participate in decision-making regarding their benefits, and how might this shift impact employee satisfaction and retention rates at UPS?

The new benefit contribution rates introduced by UPS in 2024 reflect the company’s commitment to securing the financial futures of its employees. These changes encourage employees to be more engaged in the decision-making process regarding their benefits, which can lead to greater satisfaction and retention. UPS fosters this involvement by providing clear communication about how benefits are structured and how employees can contribute to their long-term financial health.

For employees looking to enhance their retirement savings beyond the UPS Pension Plan, what additional options are available, such as 401(k) or health savings accounts, and how do these integrate with the retirement benefits provided by UPS? Additionally, how can employees get the most out of these supplemental plans during their working years at UPS?

Beyond the UPS Pension Plan, employees have additional retirement savings options, such as 401(k) plans and health savings accounts (HSAs). These plans complement the pension benefits and allow employees to further enhance their retirement savings during their working years. UPS offers matching contributions for the 401(k), and employees are encouraged to maximize these plans to ensure robust retirement savings.

How does UPS support employees facing long-term disabilities in relation to their pension plans and health care coverage? Can you explain the interaction between long-term disability benefits and retirement benefits, particularly for employees who may leave the workforce earlier than anticipated due to health issues?

For employees facing long-term disabilities, UPS provides both long-term disability benefits and continued healthcare coverage, which are integrated with their pension plans. Employees who leave the workforce early due to health issues can rely on these benefits to maintain financial stability, as the long-term disability benefits help bridge the gap until they reach retirement age and are eligible for pension payments.

For employees seeking more information on their retirement benefits and options available through UPS, what channels are best for contacting the benefits department? Are there specific representatives dedicated to assisting employees with retirement questions to ensure they understand the nuances of their benefits effectively?

UPS employees seeking more information about their retirement benefits can contact the benefits department through designated channels, such as the employee portal or direct phone lines. UPS also provides representatives who specialize in retirement benefits, ensuring employees receive personalized guidance to understand the nuances of their pension plans and other retirement options effectively.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

UPS offers both a traditional defined benefit pension plan and a defined contribution 401(k) plan. The defined benefit plan includes a cash balance component, where benefits grow based on years of service and compensation, with interest credits added annually. The 401(k) plan offers company matching contributions and various investment options such as target-date funds and mutual funds. UPS also provides financial planning resources and tools to help employees manage their retirement savings.

UPS offers RSUs that vest over time, giving employees shares upon meeting vesting conditions. Stock options are also provided, allowing employees to purchase shares at a fixed price.