With more and more people receiving IRMAA Letters from Social Security the question that is starting to arise is where will the 2025 IRMAA Brackets be?
With any luck and an absence of Congress they will hopefully be much higher than where they are today.
What is IRMAA?
IRMAA is short for Medicare’s Income Related Monthly Adjustment Amount. It is a surcharge on top a Medicare beneficiaries Part B and Part D medicare prescription, if they are earning too much taxable income.
Simply put, IRMAA is a tax on income through Medicare.
What are IRMAA Brackets?
According to Social Security.gov IRMAA brackets are “a set of statutory percentage-based tables used to adjust Medicare Part B and Part D prescription drug coverage premiums.
“The higher the beneficiary’s range of modified adjusted gross income (MAGI), the higher the IRMAA. There are three sets of tables”.
These brackets “use the beneficiary’s tax status when using the table”. The tax status is broken into:
- Single, head–of–household, or qualifying widow(er) with dependent child tax filing status.
- Married filing jointly.
- Married filing separately.
The 2023 IRMAA Brackets are:
| 2023 IRMAA Brackets | ||
| Individual’s MAGI | Part B Premium | Part D Premium |
| < $97,000 | $164.90 | Premium (varies) |
| $97,000 to $123,000 | $230.80 | $12.20 |
| $123,000 to $153,000 | $329.70 | $31.50 |
| $153,000 to $183,000 | $428.60 | $50.70 |
| $183,000 to $500,000 | $527.50 | $70.00 |
| > $500,000 | $560.50 | $76.40 |
| Couple’s MAGI | Part B Premium | Part D Premium |
| < $194,000 | $164.90 | Premium (varies) |
| $194,000 to $246,000 | $230.80 | $12.20 |
| $246,000 to $306,000 | $329.70 | $31.50 |
| $306,000 to $366,000 | $428.60 | $50.70 |
| $366,000 to $750,000 | $527.50 | $70.00 |
| > $750,000 | $560.50 | $76.40 |
| Married filing separately | Part B Premium | Part D Premium |
| < $194,000 | $164.90 | Premium (varies) |
| $97,000 to $403,000 | $527.50 | $70.00 |
| > $403,000 | $560.50 | $76.40 |
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If you are here you already know about IRMAA..but do you know how much it will reduce your clients retirement income?
Do IRMAA Brackets change?
Yes, the IRMAA Brackets should change annually if there is inflation.
According to legislation Congress passed in the 2003 Medicare Modernization Act (MMA) the IRMAA Brackets must adjust annually based on inflation.
The reason why the IRMAA Brackets should change is that in 2010 with the passing of the Affordable Care Act the IRMAA Brackets were legislated to NOT change until 2028.
Starting in 2010 the IRMAA Brackets did not adjust at all regardless of what inflation was doing. By 2018 with the passing of the Bi-Partisan Budget Act (BBP 2018) not only did the IRMAA Brackets start to adjust again but the 5th IRMAA Threshold was created.
Since the passing of the BBPA in 2018 the IRMAA Thresholds have adjusted each year based on inflation.
Keep in mind that Congress at any time can pass legislation not only preventing the IRMAA Brackets from adjusting but they can also change any aspect of them at any point. Remember IRMAA is a tax on income that generates revenue for the government.
How the IRMAA Brackets adjust:
When Congress created Medicare IRMAA back in 2003 through the passing of the Medicare Moderniztion Act, they ruled that the IRMAA Brackets would adjust by
“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.”
So, if the CPI-U at the end of August of the current year is greater than the previous August then the IRMAA Brackets will increase. Note the inflation rate does not determine IRMAA costs.
By the way there is no language that would stop the IRMAA Brackets from going down if the CPI-U would actually deflate from year to year.
In terms of the all the Thresholds within the IRMAA Brackets, due to the passing of the Bi-Partisan Budget Act of 2018 the 5th Threshold in the IRMAA Brackets will not adjust for inflation until 2028.
What is the CPI-U:
The CPI-U is short for the Consumer Price Index for Urban Consumers which, according to the Bureau of Labor, is:
“A monthly measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services”.
The CPI-U tracks the inflation rate as it places a number on the on the spending patterns of consumers in cities.
If the CPI-U number is higher than the previous month then the goods and services you typically buy most likely increased in price.
The 2024 IRMAA Brackets
At the time of this report the average annual rate of inflation was higher by 5.43% from last year. The IRMAA Brackets by law should be higher.
Again, Congress can change the rules at any point and still has time to do, but if Congress does NOT change the rules the IRMAA Brackets next year should be:
| Individual’s MAGI | Part B Premium | Part D Premium |
| < $102,000 | $174.80 | Premium (varies) |
| $102,000 to $130,000 | $244.70 | $12.90 |
| $130,000 to $161,000 | $349.60 | $33.30 |
| $161,000 to $193,000 | $454.40 | $53.80 |
| $193,000 to $500,000 | $559.20 | $74.20 |
| > $500,000 | $594.20 | $81.00 |
| Couple’s MAGI | Part B Premium | Part D Premium |
| < $204,000 | $174.80 | Premium (varies) |
| $204,000 to $260,000 | $244.70 | $12.90 |
| $260,000 to $322,000 | $349.60 | $33.30 |
| $322,000 to $386,000 | $454.40 | $53.80 |
| $386,000 to $750,000 | $559.20 | $74.20 |
| > $750,000 | $594.20 | $81.00 |
| Married filing separately | Part B Premium | Part D Premium |
| < $102,000 | $174.80 | Premium (varies) |
| $102,000 to $403,000 | $559.20 | $74.20 |
| > $403,000 | $594.20 | $81.00 |
What about IRMAA Brackets for 2025?
Believe it or not we can calculate the 2025 IRMAA Brackets and even the corresponding surcharges for that year.
Each year the federal government releases projections of where the Medicare program will need to be to continue to remain functioning in terms of money.
In both 2024 and 2025 the costs within Medicare, including surcharges, must increase by close to 6.00%
As for the 2025 IRMAA Brackets, historically, the rate of inflation runs at roughly 2.55% annually.
If inflation continues to cool down as the media is reporting as of today, and inflation grows at this historic consistent rate then the IRMAA Brackets will increase by that 2.55% inflation rate.
So we know what the 2025 IRMAA Brackets may be through the history of inflation in the country and what the government is telling us about surcharges.
In 2025 IRMAA Brackets are projected to be:
| 2025 | ||
| Individual’s MAGI | Part B Premium | Part D Premium |
| < $105,000 | $185.00 | Premium (varies) |
| $105,000 to $133,000 | $259.00 | $13.70 |
| $133,000 to $165,000 | $369.90 | $35.30 |
| $165,000 to $198,000 | $480.80 | $57.00 |
| $198,000 to $500,000 | $591.90 | $78.60 |
| > $500,000 | $628.90 | $85.80 |
| Couple’s MAGI | Part B Premium | Part D Premium |
| < $210,000 | $185.00 | Premium (varies) |
| $210,000 to $266,000 | $259.00 | $13.70 |
| $266,000 to $330,000 | $369.90 | $35.30 |
| $330,000 to $396,000 | $480.80 | $57.00 |
| $396,000 to $750,000 | $591.90 | $78.60 |
| > $750,000 | $628.90 | $85.80 |
| Married filing separately | Part B Premium | Part D Premium |
| < $102,000 | $185.00 | Premium (varies) |
| $102,000 to $403,000 | $591.90 | $78.60 |
| > $403,000 | $628.90 | $85.80 |
Conclusion
When it comes to the 2025 IRMAA Brackets there is one fact that should stand out – IRMAA is a tax on income that generates revenue for the federal government.
By current law the IRMAA Brackets must adjust with the rate of inflation on an annual basis, but at any point Congress can change the rules.
Without any interference from Congress then the 2025 IRMAA Brackets will be significantly higher than they are today, but do not keep your hopes up.
Recent reports from the federal government are projecting that for Medicare to have enough money to stay open more people will need to be in IRMAA each year.
Currently, about 15% of all eligible Medicare beneficiaries are in IRMAA and by 2025 that percentage will be close to 17.5%,
Unfortunately, even at these percentages the Medicare program is still expected to run out of money in 3 years.
The IRMAA Brackets must change, or all taxes must increase for Medicare to remain functional for retirees.
The question now comes down to if Congress wants to tax everyone or will it just tax those who have money?
To learn how to avoid IRMAA all together you can always speak with an IRMAA Certified Professional which you can find here.
Streamlining the Medicare IRMAA Surcharge Calculation Process.
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Frequently asked questions
How can I Learn More about IRMAA as a financial professional
If you would like to learn more you can go to www.irmaacertifiedplanner.com for certification and designation to be an IRMAA Certified Planner
What is IRMAA?
The Medicare Income-Related Monthly Adjustment Amount (IRMAA) is an amount you may pay in addition to your Part B or Part D premium if your income is above a certain level.
Does everyone have to pay IRMAA
How do I calculate my IRMAA exposure over the duration of a retirement?
Using the software provided by www.healthcareretirementplanner.com
Why Become IRMAA Certified?
About 99% of American pre-retirees or retirees, financial advisors, CPAs, and attorneys are not familiar with IRMAA or what it is. If a pre-retiree or retiree generates a certain level of taxable retirement income in retirement, they run the risk of their Social Security Net Benefit being greatly reduced or eliminated upon retirement.
Our chief mission is to provide you, as a Financial Professional with the highest level of education about the risks of IRMAA in retirement, along with the tools to help your clients plan more appropriately. By providing this education, tools, and situational IRMAA cases, you will be able to implement IRMAA planning into your client’s retirement strategy.
With the certification program, you will get:
• Self direct study materials
• Industry recognized designation
• IRMAA Certified Planner Certificate
Become an industry leader, opening up access to more clients by being the first to show them how to change the way they plan and ensure retirement success.
