By law the IRMAA Thresholds, at least the first 4 of them are supposed to adjust on annual basis based on the Consumer Price Index for Urban Consumers or the CPI-U from a year-to-year point ending every August.
If the CPI-U increases and or decreases within that time period, then the first 4 IRMAA thresholds are supposed to increase or even decrease by that percentage.
Please keep in mind that for the 2023 IRMAA Thresholds CMS used the change of CPI-U from 2021 to 2022 as the information for 2023 is not actually known yet.
In 2021 the CPI-U was 265.447 while in 2022 the average CPI-U for those 12 months was 285.848. This is a 7.69% increase in the CPI-U.
The IRMAA Thresholds in 2022 were:
|Individual MAGI ||Couple MAGI||Part B Premium||Part D Premium |
|< $91,000||< $182,000||$170.10||Premium (varies) |
|$91,000 - $114,000||$182,000 - $228,000||$238.10||Premium + $12.40 |
|$114,000 - $142,000||$228,000 - $284,000||$340.20||Premium + $32.10 |
|$142,000 - $170,000||$284,000 - $340,000||$442.30||Premium + $51.70 |
|$170,000 - $500,000||$340,000 - $750,000||$544.30||Premium + $71.30 |
|> $500k||> $750k||$578.30||Premium + $77.90 |
The IRMAA Thresholds in 2021 were adjusted upwards by that amount and then rounded down to the nearest $1,000 to end with $97,000.
The calculation to determine the IRMAA Threshold was:
1st IRMAA Threshold – $91,000 X 1.0769 = $97,997.90, rounded down to $97,000.
2nd IRMAA Threshold – $114,000 X 1.0769 = $122,766.60 rounded up to $123,000.
3rd IRMAA Threshold – $142,000 X 1.0769 = $152,919.80 rounded up to $153,000.
4th IRMAA Threshold – $170,000 X 1.0769 = $183,073 rounded down to $183,000.
With the creation of the Bi-Partisan Budget Act of 2018 by Congress the 5th IRMAA Threshold is not scheduled to adjust for inflation until 2028.
But what if the CPI-U goes down?
Since the inception of the IRMAA Thresholds in 2003 the CPI-U has never decreased, but with the unprecedented increase in inflation within the United States, which is being addressed at the time of this writing, that may in fact happen.
Since October of 2022 the CPI-U has decreased month after month. If this is to continues and the 12-month average is lower than it was from 2022 then the IRMAA Thresholds may in fact decrease – though this has never since 1954.
Medicare’s Income Related Monthly Adjustment Amount or IRMAA is something every person should be made aware of and have planned for.
According to the Medicare Board of Trustees the bulk of Medicare premiums, Parts B and D are projected to inflate by close to 6.00% for at least the next 8 years.
Within 10 to 15 years these surcharges, as they are paid directly out of Social Security benefits being received may be more harmful than many think.