Why Medicare Surcharges in 2027 May Be Tougher to Forecast

A missing inflation report could change proposed income thresholds by $1,000 for individuals and $2,000 for married couples filing jointly in 2027.

Each fall, older Americans wait for two key announcements: first, the size of the next Social Security increase, and later, how much of that gain Medicare premiums will absorb.

Medicare premiums are typically withheld automatically from monthly Social Security payments and are usually announced in late October or early November.

Medicare Part B premiums, which pay for medically necessary services, supplies, and preventive care, have risen faster than Social Security’s cost-of-living adjustment for three straight years and in seven of the past 10 years, according to The Senior Citizens League. Over the last decade, the group said, Part B premiums have climbed an average of 5.3% a year, compared with 3.1% for COLAs.

For people whose income crosses certain limits, even by $1, Medicare costs can jump by more than $1,000 a year because of the income-related monthly adjustment amount, or IRMAA. That makes tracking inflation-adjusted income thresholds important for keeping health costs lower, though that may be especially difficult for 2027.

Enrollees not only have to remember that IRMAA is based on income from two years earlier, in 2025, but also that the threshold calculation may be more complicated than usual. IRMAA income limits are adjusted each year using 12 months of inflation data through August, but a government shutdown from Oct. 1 to Nov. 12, 2025, kept the Bureau of Labor Statistics from compiling 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 tied to modified adjusted gross income, or MAGI, from two years earlier. In other words, the premium paid in 2027 will depend on 2025 MAGI. MAGI is adjusted gross income plus tax-exempt interest reported on a tax return.

The higher the MAGI, the larger the premium, because IRMAA uses tiered surcharges. Medicare Part B starts with the standard premium at the low end, and based on MAGI, beneficiaries can pay between 1.4 and 3.4 times that amount. The 2026 Medicare Trustees Report projects the standard monthly Part B premium at $209.50 in 2027, an increase of $6.60, or about 3.25%, from $202.90 this year.

Part D drug plans are also subject to IRMAA, so MAGI also determines the size of the surcharge for prescription coverage.

How CMS Might Calculate the 2027 Brackets

The Centers for Medicare & Medicaid Services has two possible ways to calculate the IRMAA brackets, Sit said.

CMS can either rely on 11 months of data instead of 12, or use the inflation figure Treasury applied for October 2025 when calculating interest on Treasury inflation-protected securities, or TIPS. TIPS principal values are adjusted for inflation, so they rise when inflation increases and fall when inflation decreases.

The two methods would create a bracket difference of $1,000 for individuals and $2,000 for joint filers, with the Treasury-based October 2025 inflation number producing the lower thresholds, 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 Premium 2027 Coverage Based on 2025 Income

Standard Single: $112,000 or less; married filing jointly: $224,000 or less; married filing separately: $112,000 or less
1.4 times standard Single: $141,000* or $142,000 or less; married filing jointly: $282,000* or $284,000 or less
2.0 times standard Single: $176,000* or $177,000 or less; married filing jointly: $352,000* or $354,000 or less
2.6 times standard Single: $211,000* or $212,000 or less; married filing jointly: $422,000* or $424,000 or less
3.2 times standard Single: less than $500,000; married filing jointly: less than $750,000; married filing separately: less than $388,000
3.4 times standard Single: $500,000 or more; married filing jointly: $750,000 or more; married filing separately: $388,000 or more

How to Reduce IRMAA

According to Nick Bour, founder and chief planning strategist at Inspire Wealth, a few strategies may help limit IRMAA:

• Doing Roth conversions early, more than two years before enrolling in Medicare, can create income without later adding taxable income that would count toward MAGI, financial advisers said.
• Qualified charitable distributions, or gifts sent directly to charity from a traditional retirement account, can satisfy a required minimum distribution if you are at least 70½ without increasing MAGI.
• Withdrawals from a Health Savings Account and a Roth IRA are tax-free and do not count toward MAGI.