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

Navigating Rising Medicare Costs: A FedEx Employee’s Guide

“In light of projected Medicare Part B premium increases, FedEx 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, FedEx 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 FedEx 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. FedEx 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 FedEx 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 FedEx 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 FedEx 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 FedEx employees relying on Social Security should plan for most of their increase to be offset.

Strategic Planning Tips

To manage rising health care costs, FedEx 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. FedEx 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.

What are the implications of the Funding Target Attainment Percentage for FedEx Corporation employees, and how does it impact the security of the pension benefits offered by FedEx Corporation? This question seeks to explore the nuances of the funding target attainment percentage as reported in the annual funding notice, examining how this metric not only reflects the financial health of FedEx Corporation's pension plan but also how it affects employee confidence in future benefit payments and retirement planning.

Funding Target Attainment Percentage: The Funding Target Attainment Percentage for FedEx Corporation indicates the degree to which the pension plan is funded. A percentage of 101.33% for 2022 suggests that the plan has sufficient assets to cover its liabilities, providing security for employees' pension benefits. This high percentage likely increases employee confidence in the stability and reliability of their future pension payouts, essential for long-term retirement planning.

How does the merger of the FedEx Freight Pension Plan into the FedEx Corporate Employeesâ€™ Pension Plan influence the benefits currently available to FedEx Corporation employees? This question aims to delve into the practical changes that may arise due to this merger, assessing whether it aligns with employee expectations regarding their pension benefits and how the transition process is managed by FedEx Corporation.

Merger of Pension Plans: The merger of the FedEx Freight Pension Plan into the FedEx Corporate Employees’ Pension Plan appears to have been strategically managed to maintain benefit stability. Despite increasing liabilities by 5.3%, the merger was structured to ensure no negative impact on the benefit amounts payable to participants from either plan, preserving the expected pension benefits for all affected FedEx Corporation employees.

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Investment Strategies: FedEx Corporation employs a diversified investment strategy across equities, fixed income, and alternative investments, aiming to meet long-term pension liabilities. This approach, which includes both active management strategies and the limited use of derivatives, is designed to generate returns that exceed market indices, thus ensuring adequate funding of pension obligations.

What options do employees of FedEx Corporation have for accessing their pension plan statements, and how frequently are these statements generated? The focus here is to understand the communication strategies employed by FedEx Corporation regarding pension benefit statements, including technological access points and the importance of these documents for employee financial planning.

Pension Plan Statements: FedEx Corporation provides annual pension plan statements through their Retirement Service Center, available electronically each fall. Employees can access their statements online or request them if notifications are not received, ensuring transparency and aiding in personal financial planning.

How are contributions to the FedEx Corporation Employeesâ€™ Pension Plan determined, and what role do excess contributions play in the plan's overall funding strategy? This question aims to educate employees about how the company balances mandatory contribution levels with potential excess contributions, exploring how these factors interact to influence the plan's solvency and employee benefits.

Contributions to the Pension Plan: Contributions to the FedEx Corporation Employees' Pension Plan are calculated to meet at least the minimum legal requirement and potentially include voluntary excess contributions. These excess contributions can help manage the plan's funding level and ensure its solvency, benefiting overall pension security for employees.

What types of benefits are guaranteed under the Pension Benefit Guaranty Corporation (PBGC) for FedEx Corporation employees, and what limitations exist that employees should be aware of? By focusing on the guaranteed benefits, this question prompts a discussion on the security of specific benefits provided by FedEx Corporation and highlights limitations, allowing employees to understand their rights fully.

PBGC Guarantee: The Pension Benefit Guaranty Corporation guarantees certain types of benefits for FedEx Corporation employees, such as pension benefits at normal retirement age and most early retirement benefits. However, there are limitations, such as exclusions for benefits without vested rights and recently increased benefits, which employees should be aware of to fully understand their pension security.

In what ways does the FedEx Corporation plan to adjust its pension funding strategy in light of changing federal laws that impact pension obligations? Employees are encouraged to consider how legislative changes influence corporate policies surrounding retirement benefits and the proactive strategies FedEx Corporation might take to remain compliant while ensuring the security of employee pensions.

Adjustments to Funding Strategy: FedEx Corporation is likely to adjust its pension funding strategy in response to legislative changes affecting pension obligations, such as those introduced by recent acts adjusting how pension liabilities are calculated. This proactive approach aims to ensure compliance with new laws while continuing to secure the financial health of the pension plan.

What are the steps that FedEx Corporation employees must take if they are considering retirement, particularly in how to navigate the pension plan and gain access to their benefits? This question aims to provide clarity on the retirement process, ensuring that employees are equipped with the necessary information regarding required documentation, timelines, and points of contact within FedEx Corporation.

Steps for Retirement Planning: Employees considering retirement should contact the FedEx Retirement Service Center to navigate their pension plan benefits. This process involves understanding necessary documentation, timelines, and available support, facilitating a smooth transition into retirement.

How does FedEx Corporation plan to manage potential funding shortfalls in the pension plan, and what mechanisms are in place for notifying plan participants should such an event occur? Employees would need to understand the proactive measures put in place by FedEx Corporation to address funding-related challenges while also knowing what this means for their benefits.

Managing Funding Shortfalls: In the event of potential funding shortfalls, FedEx Corporation has policies in place to manage such situations, including strategic contributions to mitigate shortfalls. The company maintains transparency with plan participants about funding levels and any significant changes affecting the pension plan.

For those seeking more information about their pensions and retirement options, how can FedEx Corporation employees contact relevant departments, and what resources are available for assistance? This question provides an opportunity for employees to familiarize themselves with contact points such as the FedEx Retirement Service Center, emphasizing the importance of open communication channels for addressing inquiries related to their pensions. Feel free to consult the provided document for more in-depth exploration of these topics.

Contacting for Pension Information: FedEx Corporation employees seeking more information about their pensions or retirement options can contact the FedEx Retirement Service Center. This center provides essential resources and support, ensuring employees have access to all necessary information regarding their retirement planning.

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For more information you can reach the plan administrator for FedEx at 942 south shady grove rd Memphis, TN 38120; or by calling them at 901-818-7500.