Medicare IRMAA Income Thresholds Expected to Increase Over 3% from 2024
The Unofficial 2025 IRMAA Thresholds should increase by over 3.00% from 2024. Congress can change that before end of year though.
With the Bureau of Labor reporting that the Consumer Price Index for Urban Consumers (CPI-U) for August is 314.796, Medicare's unofficial 2025 IRMAA Thresholds should increase by over 3.00%.
The official definition of IRMAA, according to Social Security's Program Operations Manual system (POMs) is:
"Who have modified adjusted gross income (MAGI) above the threshold for their tax filing status pay an IRMAA in addition to the monthly premium."
IRMAA is simply a surcharge or tax on your income through Medicare that is easily avoidable with proper financial planning.
IRMAA is comprised of 5 different income levels that gradually increase in surcharges once the thresholds have been reached.
For reference, here are the current 2024 IRMAA thresholds:
| Individual MAGI | Couples MAGI |
|---|---|
| < $103,000 | < $206,000 |
| $103,000 to $129,000 | $206,000 to $258,000 |
| $129,000 to $161,000 | $258,000 to $322,000 |
| $161,000 to $193,000 | $322,000 to $386,000 |
| $193,000 to $500,000 | $386,000 to $750,000 |
| > $500,000 | > $750,000 |
Based on the CPI-U growth, the projected 2025 IRMAA thresholds are:
| Individual MAGI | Couple MAGI |
|---|---|
| < $106,000 | < $212,000 |
| $106,000 to $133,000 | $212,000 to $266,000 |
| $133,000 to $166,000 | $266,000 to $332,000 |
| $166,000 to $199,000 | $332,000 to $398,000 |
| $199,000 to $500,000 | $398,000 to $750,000 |
| > $500,000 | > $750,000 |
The first tier threshold increased from $103,000 to $106,000 for individuals and from $206,000 to $212,000 for couples.
According to the Medicare Modernization Act of 2003 (MMA), the IRMAA Thresholds are to adjust annually based on:
"The percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period."
Please note that Congress also specified that "if any dollar amount after being increased is not a multiple of $1,000, such dollar amount shall be rounded to the nearest multiple of $1,000".
Ultimately, the CPI-U grew by 3.12% from last year which means the IRMAA Thresholds should increase by that much too.
BUT, remember the rule created by Congress, the IRMAA Thresholds are supposed to be "rounded to the nearest multiple of $1,000".
If the Centers for Medicare Services (CMS) follows current federal law the IRMAA Thresholds should increase by at least 3.00% (remember rounding).
If the CPI-U increases then the IRMAA Thresholds will increase, but if the CPI-U decreases then the IRMAA Thresholds will remain the same. There is no provision in the law for thresholds to decrease.
Understanding IRMAA thresholds is crucial for retirement income planning. The key strategies include:
Learn more about strategies to reduce your MAGI and potentially avoid IRMAA surcharges.
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