Seniors eagerly await two announcements every autumn: first, how large their Social Security pay raise will be the following year and, weeks later, how much of it will be eaten by Medicare premiums.
Medicare premiums are usually deducted automatically from monthly Social Security checks and announced between late October and early November.
Medicare Part B premiums, which cover medically necessary services and supplies and preventive care, have increased faster than Social Security’s cost-of-living adjustment for three consecutive years and in seven of the last 10 years, according to The Seniors Citizens League. Over the last decade, Part B premiums have increased by an average of 5.3% per year, while COLAs have averaged 3.1%, the advocacy group said.
For people whose income crosses certain thresholds, even by $1, Medicare costs can suddenly jump by more than $1,000 per year because of the income-related monthly adjustment amount, or IRMAA. That makes keeping track of inflation-adjusted annual income thresholds key to keeping health insurance costs down, but that’s easier said than done, especially for 2027.
Not only must Medicare enrollees remember that IRMAA is based on what they earned two years ago, in 2025, but calculating the thresholds to avoid escalating IRMAA may be harder than usual. IRMAA income thresholds are adjusted each year using 12-month inflation data through August, but a government shutdown from Oct. 1 to Nov. 12, 2025, prevented the Bureau of Labor Statistics from tallying October 2025 inflation data.
“We have all 11 data points needed for the 2027 IRMAA brackets … but it’s still not clear how the Social Security Administration will calculate the 12-month average with only 11 data points,” wrote Harry Sit in The Finance Buff blog.
How IRMAA Works
Medicare surcharges are based on modified adjusted gross income, or MAGI, from two years ago. That means the Medicare premium you pay in 2027 will be determined by your 2025 MAGI. MAGI equals adjusted gross income plus tax-exempt interest from your tax return.
The higher the MAGI, the higher the premium because of tiered IRMAA surcharges. Medicare Part B prices begin with the standard premium at the lowest end, and depending on MAGI, people can pay between 1.4 and 3.4 times the standard premium. The 2026 Medicare Trustees Report forecasts the standard Part B monthly premium at $209.50 in 2027, up $6.60, or about 3.25%, from $202.90 this year.
Part D drug plans are also subject to IRMAA, so MAGI will determine how much surcharge enrollees pay for their drug plan as well.
How CMS Might Calculate the 2027 Brackets
The Centers for Medicare & Medicaid Services can calculate IRMAA brackets in one of two ways, Sit said.
CMS can use only 11, instead of 12, months of data, or it can use the inflation number Treasury used for October 2025 to calculate interest on Treasury inflation-protected securities, or TIPS. The face values of TIPS are adjusted for inflation, so when inflation rises, their face values rise as well. If inflation falls, their principal values fall.
The two calculations produce a difference in brackets of $1,000 for individuals and $2,000 for joint filers, with the calculation using Treasury’s October 2025 inflation number coming in lower, Sit estimated.
Below are Sit’s projected 2027 IRMAA brackets. An asterisk marks the projections based on Treasury’s October 2025 data point.
Part B Premium2027 Coverage Based on 2025 Income
StandardSingle: $112,000 or less; married filing jointly: $224,000 or less; married filing separately: $112,000 or less
1.4 times standardSingle: $141,000* or $142,000 or less; married filing jointly: $282,000* or $284,000 or less
2.0 times standardSingle: $176,000* or $177,000 or less; married filing jointly: $352,000* or $354,000 or less
2.6 times standardSingle: $211,000* or $212,000 or less; married filing jointly: $422,000* or $424,000 or less
3.2 times standardSingle: less than $500,000; married filing jointly: less than $750,000; married filing separately: less than $388,000
3.4 times standardSingle: $500,000 or more; married filing jointly: $750,000 or more; married filing separately: $388,000 or more
How to Limit IRMAA
Some ways to limit IRMAA, according to Nick Bour, founder and chief planning strategist at Inspire Wealth, include:
- Early Roth conversions, more than two years before starting Medicare, can provide income without triggering taxable income later that would be counted toward MAGI, financial advisers said.
- Qualified charitable distributions, or donations made directly to charity from a traditional retirement account, can help satisfy a required minimum distribution if you’re at least 70½ years old without counting toward MAGI.
- Health Savings Account and Roth IRA withdrawals are tax-free and don’t count toward MAGI.
Medora Lee is a money, markets and personal finance reporter at USA TODAY.
Add a Comment