The Income-Related Monthly Adjustment Amount (IRMAA) is a surcharge added to Medicare Part B and Part D premiums, known as the IRMAA amount, for beneficiaries whose modified adjusted gross income exceeds specific thresholds. As detailed in MedigapSeminars.org’s comprehensive guide, IRMAA is determined by income levels from two years prior, meaning 2023 income affects 2025 premiums. This adjustment ensures that higher-income individuals contribute more to the Medicare program. Understanding IRMAA is crucial for effective retirement planning, as it can significantly impact healthcare costs. The article provides insights into how IRMAA is calculated, the income brackets involved, and strategies to manage or appeal the surcharge. For a thorough exploration of IRMAA and its implications on Medicare expenses, refer to the full article on MedigapSeminars.org.
Who is Affected by Medicare IRMAA?
The Income-Related Monthly Adjustment Amount (IRMAA) primarily impacts Medicare beneficiaries with higher incomes. The Social Security Administration (SSA) determines who is subject to IRMAA based on their modified adjusted gross income (MAGI) from two years prior. If your MAGI exceed certain thresholds, you will be required to pay an additional amount on top of your standard Medicare Part B and Part D premiums.
For 2026, the Income Related Monthly Adjustment Amount applies to individuals with a MAGI less than or equal to $109,000 for single filers, $218,000 for joint filers, and $109,000 for married individuals filing separately. This includes those enrolled in both Original Medicare and Medicare Advantage plans. Those who file separate tax returns face different income thresholds and potentially higher IRMAA amounts compared to those who file jointly.
It’s important to understand that the Income Related Monthly Adjustment Amount (IRMAA) is calculated on a sliding scale that increases each year with inflation. This means the amount you pay increases as your income increases. The SSA uses your tax filing status, whether it is an individual or joint tax return, to determine your IRMAA, and the higher your income, the higher your related monthly adjustment amount will be. This ensures that Medicare beneficiaries with higher incomes contribute more towards the cost of their Medicare coverage.
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When Can I Appeal My IRMAA Charge?
People often know they will owe an IRMAA fee ahead of time and wish to appeal. You cannot appeal your IRMAA charge until after you have received a notice from Social Security that you will be charged the surcharge. That notice typically comes after your initial Part B Premium notice (without the surcharge).
Only after you receive the official notice that IRMAA surcharges are due, you can appeal the decision.
Medicare Part B
Medicare Part B is your outpatient Medicare coverage. The primary foundations of the federal Medicare program are Medicare Part A and Medicare Part B. Medicare Part A is paid for from the Medicare deduction out of your paycheck during your working years. Medicare Part B and Medicare Part D have monthly Medicare premiums you must pay for the insurance coverage.
The standard Medicare Part B medical insurance premium is paid by everyone. Your Part D premiums can vary by your choice of Medicare Part D Plan. When you apply for Medicare Part B or Part D the IRS will look at your income as of two years ago and make an IRMAA determination. If your annual income as reported on your IRS tax return is high enough, your Medicare premiums will be adjusted higher using the IRMAA determination. You will pay higher Medicare premiums. This includes your Medicare Part B premium and your Medicare Part D premiums.
It may be confusing, but your first Medicare premium bill from the Federal Government does not typically include the amount due from initial IRMAA determination. The Income Related Monthly Adjustment Amount is typically added to your monthly premium bill a few months later. This is because it takes extra time as Social Security determines if your modified adjusted gross income is high enough to impact your Medicare Part B costs.
Medicare Part B and Part D Monthly Adjustment Amount IRMAA
Medicare Part B and Part D IRMAA are surcharges added to your standard Medicare premiums, affecting your total premiums if you have a higher income. The IRMAA for Part B is calculated based on your modified adjusted gross income (MAGI) and tax filing status, with amounts ranging from $185.00 to $628.90 per month. Similarly, the IRMAA for Part D prescription drug coverage ranges from $13.70 to $85.80 per month, depending on your income and tax filing status.
The Social Security Administration (SSA) determines your IRMAA based on your income from two years ago. If you are required to pay an IRMAA, you will receive a notice in the mail detailing the additional amount. If you believe the SSA’s determination was incorrect or if your circumstances have changed, you have the right to appeal.
It’s crucial to understand that the monthly adjustment amount IRMAA is not a penalty. Instead, it is a mechanism to help fund Medicare Part B and Part D prescription drug coverage by adjusting premiums based on income. This helps ensure the sustainability of Medicare for all beneficiaries.
If you are affected by IRMAA, you can expect to pay a higher monthly premium for your Medicare Part B and Part D coverage. This surcharge is ongoing and will be added to your total premiums as long as your income remains above the threshold. Understanding how IRMAA works can help you plan your finances and avoid unexpected costs.
Modified Adjusted Gross Income
The Centers for Medicare & Medicaid Services (CMS) and the Social Security Administration determine your eligibility for IRMAA payments by calculating your annual Modified Adjusted Gross Income (MAGI). This is simply your Adjusted Gross Income from your tax return with some deductions added back to your income. The MAGI used is as of two years ago. In other words, CMS recalculates your MAGI on a rolling two-year lookback. CMS then informs Social Security of their determination.
Some of the deductions added back to your income to determine your MAGI include:
Taxable Social Security payments
IRA Contributions
Any passive income loss
Deductions for tuitions and fees
Capital gains
Your MAGI is then matched with tax filing status and income levels in the table below to determine the amount due. For 2026 the Part B premium ranges from $202.90 per month (standard) to a high of $689.90 per month for those in the highest income bracket.
What are IRMAA brackets, costs, and calculations
Income-related monthly adjustments are calculated based on adjusted gross income and may affect Medicare premium payments. Generally, Medicare adds the premium on Part D or Medicare’s prescription medications coverage if a user earns a greater amount of income. An individual will be notified of the adjustments and will be entitled to appeal. The charge is imposed by IRMAA on individuals with Medicare Part B or Part C, or both.
The impact on Medicare Part D premiums is not as substantial on a net dollar basis. But on a percentage basis of the total Part D premium, it is meaningful in terms of cost sharing, as it affects the overall expenses beneficiaries need to cover, including premiums, deductibles, and coinsurance amounts.
| 2026 Medicare Part B and Part D IRMAA (Income Related Monthly Adjustment Amount) | ||||
|---|---|---|---|---|
|
If your yearly MAA income in 2023 was |
||||
|
File individual tax return |
File joint tax return |
File married & separate tax return |
You pay each month (in 2026) |
|
|
Part A |
Part B |
|||
|
$109,000 or less |
$218,000 or less |
$109,000 or less |
$202.90 |
Plan premium only |
|
above $109,000 up to $137,000 |
above $218,000 up to $274,000 |
Not applicable |
$284.10 |
Premium + $14.50 |
|
above $137,000 up to $171,000 |
above $274,000 up to $342,000 |
Not applicable |
$405.80 |
Premium + $37.50 |
|
above $171,000 up to $205,000 |
above $342,000 up to $410,000 |
Not applicable |
$527.50 |
Premium + $60.40 |
|
above $205,000 less than $500,000 |
above $410,000 less than $750,000 |
above $109,000 less than $391,000 |
$649.20 |
Premium + $83.30 |
|
$500,000 or above |
$750,000 and above |
$391,000 and above |
$689.90 |
Premium + $91 |
Rolling Two-year Lookback
It is important to stress that your IRMAA status can change each calendar year. This may be due to a change in your income and/or a change in the income table. Every year the Social Security Administration (SSA) reviews your tax returns to see if you reached an income limit. Your income is matched to the IRMAA income bracket table to see if you must pay the IRMAA. They make a new initial determination and add it to the Medicare beneficiaries Part B premium and Part D monthly premium if you qualify.
Legislation enacted in 2020 linked the above IRMAA income brackets to the Consumer Price Index for Urban Consumers (CPI-U). This is good news because it can reduce the impact of rising incomes due to higher inflation.
Tax Filing Status
To be clear, the IRMAA determination amount differs by tax filing status, whether it is an individual return or a joint return. Medicare Beneficiaries who are married filing separately have a different level of annual income to meet than those who file individually. As your yearly income changes it can affect your IRMAA monthly premium.
Can I Avoid an IRMAA Surcharge with Medicare Advantage Plans?
You cannot avoid paying IRMAA charges if you get an Advantage Plan. You will still be charged the extra premium for both Part B and Part D. IRMAA charges are based on your income and will be assessed regardless of how you get your Medicare. IRMAA charges for both Medicare Part B and Medicare Part D will be charged even if you get a Medicare Advantage Plan (also known as Medicare Part C). Because many Medicare Advantage Plans include a bundled Part D prescription drug plan, you will also be charged for the Part D IRMAA through the Medicare Advantage Plan. IRMAA charges must be paid directly to Medicare, regardless of how you receive your Medicare coverage.
I should also not here that if you are subject to IRMAA, the Medicare Hold Harmless provision will not apply to you. The hold harmless provision is designed to protect very low income individuals. If you qualify for IRMAA, you are not considered low income.
Do I Pay Extra for a Medicare Supplement?
insurance is not impacted by your IRMAA status, but your Part B coverage will be. A Medicare beneficiary will pay IRMAA monthly plan premium that increases the cost of Part B and Part D only.
How To Appeal an IRMAA Surcharge
If it is determined that you should pay an IRMAA surcharge, you will receive an Initial Determination notice from Social Security. The notice will include information on how to request a new initial determination, considering factors such as your social security benefits.
You will want to appeal the IRMAA decision if you believe the was incorrect. For example, if you had corrected or amended tax return resulting in a lower reported income. Also, there are certain life-changing events that will be considered in reevaluating your IRMAA plan premium.
Social Security will consider these life changing events when re-examining your IRMAA status
The death of spouse
Marriage
Divorce or annulment
You or your spouse stopped working or reduced the hours worked.
Loss of pension
Involuntary loss of income-producing property
Receipt of settlement payment from a former or current employer due to closure or bankruptcy
Reductions or losses in pension income can also significantly affect your income calculations used by the Social Security Administration for determining healthcare surcharges.
To request a new determination, you will use form SSA-44 “Medicare IRMAA Life-Changing Event” or schedule an appointment at a Social Security office.
How to Avoid an IRMAA Surcharge
Of course, appealing the IRMAA plan premium bills is something you can do after-the-fact. We encourage our clients to, where possible, avoid IRMAA surcharges in the first place. Effective personal finance strategies can help you avoid IRMAA surcharges in the first place. Naturally, those of us with high a enough yearly income to be impacted by the initial IRMAA determination should be grateful for what we have. But we should not pay any higher a Medicare Part B premium than we have to. A life changing event is not the only way to reduce or avoid the higher plan premium.
Below are a list of ways a person can avoid the IRMAA surcharge.
Plan Ahead to Avoid IRMAA
Now that you know the IRMAA calculation uses your income as of two years ago, avoid actions that will influence your income up to two years prior to starting Medicare. Remember that capital gains count towards your MAGI, which can impact your IRMAA status. For example, we often come across people who have sold a home and downsized to prepare for retirement. That downsizing can result in a capital gain that catapults your income into the IRMAA status. If you plan to downsize, do it early. Downsize before the two-year window prior to starting Medicare.
Roth Conversions Can Trigger IRMAA
Because the prevailing belief is that tax rates will increase in the future, many people are converting their traditional IRA’s to Roth IRA’s. The benefit would be to pay the current tax rate on the distribution now so as not to pay a higher rate later. When making that calculation, consider the impact on your Part B premium. Your MAGI determines your IRMAA, so consider the impact of Roth conversions on your income. You can accidentally push your Part B premium from $170 a month to nearly $600 a month.
Required Minimum Distributions (RMDs)
If you are close to the next higher bracket for IRMAA costs, look at the impact of RMDs. If an RMD will push you into a higher bracket you can use charitable contributions to lower your income. If you don’t need the income from your RMD, your philanthropy can benefit you as well as your favorite charity.
If your income is less than $500,000, you may still be subject to IRMAA based on your RMDs.
Annuity Income to Avoid IRMAA
Consider the tax advantaged income of annuities and life insurance. Annuity income is considered in part a return of principle. Instead of automatically taking taxable income from deferred income accounts, you can structure your portfolio towards guaranteed tax advantaged income. The result will be a more secure income, lower taxes and possible IRMAA avoidance.
Annuity income can help keep your MAGI less than $750,000, potentially avoiding higher IRMAA surcharges.
Medigap Seminars Can Help You Understand Your IRMAA
Because we are a premier Medicare Insurance broker, we help many thousands of people with their Medicare questions, including about IRMAA. If you have your Medicare plan through us, we help you understand, avoid and appeal IRMAA charges. We also provide guidance on Medicaid services to ensure you have comprehensive healthcare coverage. We are the “Medicare Insurance Broker near me“, only a phone call away.
Conclusion
IRMAA surcharges are a frustrating but necessary feature of Medicare, ensuring that higher-income beneficiaries contribute more towards the benefits they receive. Even with the surcharges, in all but the highest level of income the consumer is sharing the cost of Medicare with the U.S. Government. IRMAA surcharges help keep the Medicare program active and extend its life expectancy.
With planning, you may be able to avoid the IRMAA surcharge or reduce it.
Medicare does not intend to charge an IRMAA to those who cannot afford it. As such, there is an appeals process to reduce or eliminate the IRMAA surcharge if a life changing event has impacted your income.
IRMAA is an extra surcharge on Medicare Part B and Part D premiums for high-income beneficiaries. The SSA checks your tax returns from two years ago, comparing your Modified Adjusted Gross Income (MAGI) to IRMAA brackets. If your income exceeds $109,000 (individual, 2026), premiums increase, e.g., Part B from 202.90 to $689.00 monthly. Brackets adjust with inflation via CPI-U. IRMAA applies to both Original Medicare and Medicare Advantage Plans.
To avoid IRMAA, keep your MAGI below thresholds ($109,000 individual, $218,000 joint, 2026). Plan home sales or Roth conversions outside the two-year lookback. Use charitable contributions to offset RMDs. Consider tax-advantaged annuities to lower taxable income. Early downsizing helps. A Medicare broker can offer tailored strategies to reduce MAGI and premiums.
Appeal an IRMAA notice if incorrect by filing Form SSA-44 or visiting a Social Security office. Valid reasons include amended tax returns or life-changing events like marriage or job loss. Provide documents like tax returns or marriage certificates. Quick appeals prevent overpayment, potentially lowering Part B and Part D premiums. A Medicare broker can assist.
Yes, IRMAA surcharges apply to Medicare Advantage Plans. High-income beneficiaries pay extra for Part B and Part D, even with bundled drug coverage. Surcharges, based on MAGI from two years prior, are paid to Medicare. For example, Part B may rise to $689.90 monthly. IRMAA is income-based, not plan-based, affecting total costs.
Social Security reconsiders IRMAA for events like spouse’s death, marriage, divorce, reduced work hours, pension loss, or property loss due to disaster. File Form SSA-44 with proof (e.g., death certificate). Events must lower MAGI significantly, e.g., below $109,000 for individuals. Prompt action adjusts Part B and Part D premiums, saving costs.
Roth conversions and RMDs raise MAGI, potentially triggering IRMAA. A large conversion may push Part B premiums from $202.90 to $689.90. RMDs, required after age 73, also increase MAGI. Spread conversions over years or use charitable distributions to offset RMDs. Planning with an advisor minimizes MAGI and IRMAA costs.
