Social Security COLA 2025: 5 Reasons Why Rising Medicare Premiums Could Wipe Out Your Raise Next Year

3.     Higher-Income Retirees Will Feel the Biggest Impact Due to IRMAA

For individuals whose income is above a specific limit, the federal government adds an extra charge to their monthly premium. An estimated 8% of Medicare recipients pay higher premiums for parts B and D because of these Income-Related Monthly Adjustment Amounts (IRMAA). The IRMAA is calculated based on the modified adjusted gross income (MAGI) from the previous two year’s IRS tax return.

With Medicare premiums rising, those who have higher incomes are bound to see larger increases due to the IRMAA. This will in turn reduce the impact of the COLA increase they would have otherwise received.