IRMAA

WHAT IS IRMAA (INCOME-RELATED MONTHLY ADJUSTED AMOUNT)?

IRMAA (Income-Related Monthly Adjustment Amount) is an extra premium added to Medicare Part B and Part D premiums. This addition is for individuals who are disqualified from other plans due to a higher income that exceeds the thresholds set by Medicare.

HOW IS YOUR PREMIUM CALCULATED?

Your premium is determined by your yearly income on your tax return two years prior. Your Modified Adjusted Gross Income (MAGI) is determined according to your annual earnings.

What Counts as Income?

Income is based on Modified Adjusted Gross Income (MAGI) from your federal tax return two years prior. The income considered in the calculation includes:

• Wages
• Self-employment income
• Investment Income/ Capital gains
• Rental income
• Retirement account distributions
• Taxable Social Security benefits
• Even if some income isn’t taxed, it may still count toward IRMAA calculations.

It does not matter whether the income is recurring or one-time. Large one-time events, such as selling a home or converting a retirement account to a Roth IRA, can temporarily increase Medicare premiums.

You compare the income to the current rate to determine your bracket. This will show you how much you pay.

Medicare Part B and IRMAA

Your  Medicare Part B or outpatient coverage premium will be higher than the standard premium. Unlike standard Part B increases, adjustments are not protected by the Hold Harmless rule. This means higher-income beneficiaries may see larger increases in total Medicare costs, even in years of small COLA adjustments.

Medicare Part D and IRMAA

Also, the Medicare Part D or prescription drug coverage premium will include a surcharge.

IRMAA Brackets -Updated

Medicare organizes income into tiers called brackets. Each bracket determines how much extra you pay for Part B and Part D. While exact dollar amounts can change annually, the structure typically has moderate and higher income brackets. Each step up in income results in an increase in your monthly Medicare costs.

IRMAA Rates

The rates are adjusted annually. While the structure has remained stable, premium amounts and income thresholds shift each year, making it important to review the current rates annually.

Each year, we publish a downloadable version that is easy to follow and perfect for Medicare planning.  To learn more about the rates for this year, click the links below.

Click to download the IRMAA Part D Rates

Click to download the IRMAA Part B Rates

CAN IRMAA BE APPEALED?

If your income has decreased due to certain life-changing events, you may be able to request a reconsideration. An appeal does not guarantee approval, but it can significantly reduce premiums if granted. In these cases, you can submit an appeal to Social Security to potentially reduce your rates. Qualifying events may include:

• Retirement
• Marriage
• Divorce
• Death of a spouse
• Loss of pension income
• Loss of income-producing property
• If your income has decreased due to a life-changing event, you may request a review.

ARE THERE ANY BENEFITS?

While IRMAA itself is not a benefit, from a planning perspective, understanding how it works can help you:

• Better estimate your healthcare costs
• Align income strategies with Medicare expenses
• Avoid unexpected premium increases

IRMAA reflects a broader structure of Medicare because it :

• Helps fund the Medicare system
• Adjusts costs based on income levels
• Ensures standard premiums remain lower for many beneficiaries

MEDICARE PLANNING

IRMAA is often overlooked during Medicare planning, but it plays a key role in:

• Budgeting for retirement
• Understanding total healthcare costs
• Evaluating income sources

Even small planning adjustments can make a difference over time.  Some scenarios where planning is helpful include:

• Large withdrawals from retirement accounts may increase your rates.
• Selling assets may temporarily raise income
• Timing income can impact future Medicare premiums

COMMON QUESTIONS

Does everyone pay IRMAA?

No. IRMAA only applies to individuals whose income exceeds Medicare’s thresholds.

Does IRMAA apply forever?

Not necessarily. It is recalculated each year based on updated income information.

Does IRMAA affect all parts of Medicare?

IRMAA applies to:

• Part B premiums
• Part D premiums

It does not apply to:

• Part A (for most people)
• Medicare Advantage plan premiums

GET HELP WITH IRMAA PLANNING

Understanding IRMAA Medicare adjustments is an important part of preparing for retirement. While it may not apply to everyone, those who fall into higher income brackets should be aware of how it can impact their monthly premiums.

By reviewing your income, planning, and understanding how the brackets work, you can avoid surprises and make more informed decisions about your Medicare coverage. If you have questions about how IRMAA may affect your specific situation, fill out the form below to speak with a licensed Medicare professional and get help evaluating your options.