IRMAA Thresholds Are No Longer Frozen
Higher-income Individuals must pay an extra amount every month for Medicare Part B, medical insurance, and Part D, prescription drug coverage. This extra premium amount, the Income-related Monthly Adjustment Amount (IRMAA), is based on the beneficiary’s income tax return.
The Affordable Care Act (ACA) of 2010 imposed a freeze on the income thresholds that was in place through the year 2019. As of 2020, the Centers for Medicare and Medicaid Services (CMS) will take into consideration any percentage increase in the Consumer Price Index (CPI-U) when setting the modified adjusted gross income (MAGI) ranges. However, CMS will not adjust the top two tiers until 2028. Tiers can then change on a yearly basis.
In 2020, the most significant impact of this change is on the initial thresholds. Single filers with a modified adjusted gross income (MAGI) of $87,000 and a married individual filing a joint return with a MAGI of $174,000 were subject to paying more for Part B and Part D. For 2023, the thresholds are $97,000 and $194,000.
The Kaiser Family Foundation projected the number of beneficiaries paying Part B IRMAA would be 5.4 million in 2019 and then drop to 3.7 million, after the inflation adjustments.
Code of Federal Regulations, § 418.1105.
Kaiser Family Foundation Medicare Policy Issue Brief, January 13, 2014.
Federal Register, November 7, 2018.