It is well known that MultiLevel Coding (MLC) and MultiStage Decoding (MSD) suffice to approach capacity if the rates at different levels are chosen appropriately. In most of the practical cases, however, the rate design rule for MSD doesn't leave any room for coding at higher levels of the MLC scheme, which is very important in fading environments. In this paper, the rate design rule for multilevel coding using iterative multistage decoding is investigated, and it is shown that using iterative MSD with updated a priori probabilities of the constellation points, a broader subregion of the capacity region of the MLC scheme can be achieved.