The Centers for Medicare Services (CMS) is announcing the 2024 IRMAA Thresholds now that the August CPI-U is official.
The 2024 IRMAA Thresholds will increase by over 5.00% from 2023 and begin at $103,000 for an individual.
Now please keep in mind that at any point between now and the beginning of the 2024 Congress or the current Presidential Administration can alter these IRMAA Brackets, but if they do not then there will be at least a little bit of good news for seniors.
How the 2024 IRMAA Brackets adjust:
With the passing of the Medicare Modernization Act, the IRMAA Thresholds are to 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.”
With the CPI-U in August being at 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.
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, according to the Bureau of Labor, is short for the Consumer Price Index for Urban Consumers and 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 prices of goods consumers are purchasing and places a number on the on the spending patterns of consumers in cities. If the CPI-U or spending patterns are higher than the previous month then the goods and services most likely are increasing in price.
Calculating the 2024 IRMAA Thresholds:
The 12-month CPI-U average ending in August of 2022 = 285.8483333.
In 2023 the CPI-U average = 301.3741667.
This is an increase from 2022 to 2023 of = 5.43%.
What are IRMAA Brackets:
Social Security defines IRMAA Thresholds as:
“Set of tables containing modified adjusted gross income (MAGI) ranges and income-related monthly adjustment amounts (IRMAA). There are 3 tables, each based on a person’s income tax filing status”.
The IRMAA Thresholds and corresponding surcharges per tax filing status in 2023 are:
| Single, head of household or qualifying widow(er) with dependent child | ||
| MAGI | Part B Premium is | Part D Premium is |
| < $97,000 | $164.90 | Premium (varies) |
| $97,000 to $123,000 | $230.80 | Premium + $12.20 |
| $123,000 to $153,000 | $329.70 | Premium + $31.50 |
| $153,000 to $183,000 | $428.60 | Premium + $50.70 |
| $183,000 to $500,000 | $527.50 | Premium + $70.00 |
| > $500,000 | $560.50 | Premium + $76.40 |
| Tax Filing Status: Married, filing jointly | ||
| MAGI | Part B Premium is | Part D Premium is |
| < $194,000 | $164.90 | Premium (varies) |
| $194,000 to $246,000 | $230.80 | Premium + $12.20 |
| $246,000 to $306,000 | $329.70 | Premium + $31.50 |
| $306,000 to $366,000 | $428.60 | Premium + $50.70 |
| $366,000 to $750,000 | $527.50 | Premium + $70.00 |
| > $750,000 | $560.50 | Premium + $76.40 |
| Tax filing Status: Married, Filing Separately | ||
| MAGI | Part B Premium is | Part D Premium is |
| < $97,000 | $164.90 | Premium (varies) |
| $97,000- $403,000 | $527.50 | Premium + $70.00 |
| >$403,000 | $560.50 | Premium + $76.40 |
The 2024 IRMAA Thresholds are:
| Single, head of household or qualifying widow(er) with dependent child | ||
| MAGI | Part B Premium is | Part D Premium is |
| < $103,000 | $174.70 | Premium (varies) |
| $103,000 to $129,000 | $244.60 | Premium + $12.90 |
| $129,000 to $161,000 | $349.40 | Premium + $33.30 |
| $161,000 to $193,000 | $454.20 | Premium + $53.80 |
| $193,000 to $500,000 | $559.00 | Premium + $74.20 |
| > $500,000 | $594.20 | Premium + $81.00 |
| Tax Filing Status: Married, filing jointly | ||
| MAGI | Part B Premium is | Part D Premium is |
| < $206,000 | $174.70 | Premium (varies) |
| $206,000 to $258,000 | $244.60 | Premium + $12.90 |
| $258,000 to $322,000 | $349.40 | Premium + $33.30 |
| $322,000 to $386,000 | $454.20 | Premium + $53.80 |
| $386,000 to $750,000 | $559.00 | Premium + $74.20 |
| > $750,000 | $594.00 | Premium + $81.00 |
| Tax filing Status: Married, Filing Separately | ||
| MAGI | Part B Premium is | Part D Premium is |
| < $103,000 | $174.80 | Premium (varies) |
| $103,000- $397,000 | $559.20 | Premium + $74.20 |
| >$397,000 | $594.20 | Premium + $81.00 |
What is IRMAA:
IRMAA, according the Code of Federal Regulations is the Income Related Monthly Adjustment Amount which by definition is:
“An amount that you will pay for your Medicare Part B and D coverage when your modified adjusted gross income is above the certain thresholds.”
In simple terms IRMAA is a tax on income through Medicare Part B and Part D coverage for those who generate too much income throughout retirement.
Who will reach the 2024 IRMAA Thresholds:
The Medicare Board of Trustees in its 2022 Annual Report is stating that there are over 6.8 million people in IRMAA. These people in IRMAA make up close to 17% of all eligible Medicare beneficiaries.
By 2031 the Trustees of Medicare are projecting that the number of people in IRMAA will double to 13.8 million eligible people in IRMAA.
Over the next 7 years more and more retirees will reach IRMAA until there are at least 25% of all eligible Medicare beneficiaries in IRMAA.
Ultimately, IRMAA is a revenue generator for both the Medicare and Social Security programs and if you have the wrong type of income, you will reach it at some point.
How do people reach the 2024 IRMAA Thresholds
IRMAA is all about MAGI or Modified Adjusted Gross Income.
The greater a MAGI a person has the greater the chances that they will reach IRMAA.
How to calculate MAGI:
Social Security defines MAGI as the total of your adjusted gross income (AGI) and any tax-exempt interest you may have in a tax year.
To calculate your MAGI, gather your most recent IRS form 1040 and add the lines 2a and 11 together. The total amount of these 2 lines determines the amount of income that the IRS will provide to Social Security when they are determining your eligibility for IRMAA.
Some examples of what counts towards your MAGI are:
| Taxable Social Security benefits | Traditional 401(k) Withdrawals |
| Wages | Traditional IRA Withdrawals |
| Pension & Rental Income | Traditional 403(b) Withdrawals |
| Capital Gains | Qualified Annuities |
| Dividends | Interest |
To completely avoid IRMAA all together then your goal should be to generate an income from financial instruments that do not count towards MAGI which include:
| Roth Account Withdrawals |
| Life Insurance Loans |
| Non-Qualified Annuities* |
| Health Saving Account Withdrawals |
| 401(h) Plans |
| Home Loans or Reverse Mortgages |
*Non-Qualified Annuities – can generate a portion of income that has an exclusion ratio. Meaning a percentage of the income generated by a Non-Qualified Annuity will not count as taxable income.
For a complete list of what does and does not count towards IRMAA please click here.
Conclusion:
The 2024 IRMAA Thresholds are thankfully increasing, but, unfortunately, according to the Trustees of Medicare the odds of you or someone you know reaching IRMAA at some point are also increasing.
To learn more about IRMAA and how to avoid it or appeal it if you do reach it please contact an IRMAA Certified Professional in your area.
A directory of local IRMAA Certified Planners an be accessed at our “Resources” tab which you can find here.
