Ask the Expert: Is Medicare surcharge threshold adjusted?
You recently wrote that the modified adjusted gross income thresholds that trigger a 2023 Medicare surcharge — above $97,000 for individuals or above $194,000 for joint filers — are based on their 2021 tax returns. Does the MAGI figure increase every year with inflation? Has Social Security announced what MAGI amounts will be used in calculating 2024 Medicare premiums?
The 2024 Medicare premiums and the income levels that are subject to premium surcharges won’t be announced until September or October.
Yes, the income amounts that trigger a Medicare premium surcharge are adjusted annually for inflation. (In 2022, for example, the $97,000-plus and $194,000-plus MAGI amounts you cited were $91,000-plus and $182,000-plus.)
For readers who don’t know, the surcharge in question is called IRMAA (for income-related monthly adjustment amount) — a benign sounding acronym for a big fee that often catches retirees by surprise. IRMAA is always based on income reported two years earlier. The 2023 IRMAA is based on 2021 tax returns; the 2024 IRMAA will be based on 2022 tax returns.
IRMAA surcharges rise across five income brackets and apply to both Medicare Part B and Part D premiums.
The standard monthly Part B premium this year is $164.90. At the first income level subject to IRMAA — individual taxpayers with MAGI greater than $97,000 but under or equal to $123,000, and couples with MAGI greater than $194,000 but under or equal to $246,000 — the surcharge is $65.90. In other words, it boosts the standard Part B premium to $230.80.
At the highest income level (individuals with MAGI of $500,000 or more, and couples with MAGI of $750,000 or more), IRMAA adds $395.60 to the standard Part B premium, increasing it to $560.50 a month.
The bottom line
Income brackets that trigger Medicare premium surcharges are adjusted yearly for inflation.