What Is a Medicare Income Related Monthly Adjustment Amount (IRMAA)?

If you recently retired from a high-paying job, you may be surprised at the cost of your Medicare premiums.

That’s because high-income earners pay more for two different monthly Medicare premiums.

An income-related monthly adjustment amount, or IRMAA, is an extra Medicare cost added to your Part B and Part D premiums.

The Social Security Administration determines whether you’re required to pay an IRMAA based on the modified adjusted gross income reported on your IRS tax return from two years prior.

This additional health insurance cost rises on a sliding scale as income increases.

Of Medicare’s 62 million beneficiaries, about 7 percent — 4.3 million people — face higher Medicare premiums as a result of their income, according to CNBC.

If you’re one of those beneficiaries, you’ll receive two letters from the Social Security Administration.

The first is an IRMAA predetermination notice. It will encourage you to contact the Social Security Administration within 10 days if you believe the IRMAA information is incorrect.

If you don’t respond, you’ll receive a second letter — known as an IRMAA initial determination notice — 20 days or more after the first letter.

Unlike late enrollment penalties, which can last as long as you have Medicare, the IRMAA is calculated each year. Depending on your income, an IRMAA can be added, increased, decreased or removed each year.

IRMAAs don’t apply to Part A premiums or Medicare Advantage plans without prescription drug coverage. IRMAAs also don’t impact your Medicare deductibles.

In 2024, the standard premium for Medicare Part B — which covers doctor visits, outpatient services and durable medical equipment — is $174.70 a month.

Most people pay the standard Part B premium amount.

The 2024 Medicare IRMAA surcharge kicks in when modified adjusted gross income exceeds $103,000 for single taxpayers or $206,000 for married couples filing jointly.

The extra charge for Part B starts at $69.90 per month for those in the lowest income-adjustment bracket. This can add up to $839 more a year for Part B — in addition to the standard Part B premium you already pay.

The highest IRMAA bracket applies to married couples with incomes of $750,000 or more and single filers with incomes of $500,000 or more.

The maximum total cost for Part B for the highest income earners in 2024 is $594 a month for beneficiaries in that bracket.

Medicare prescription drug coverage is also affected by IRMAA. Like the Part B IRMAA, the Part D surcharge is based on your income tax information from two years prior.

In 2024, the extra Part D charge starts at $12.90 a month for single filers earning $103,000 to $129,000 a year and married couples filing jointly who earn $206,000 to $258,000 a year.

The highest Part D IRMAA is $81 a month in 2024 and affects single filers who earn $500,000 or more a year and married couples filing jointly who earn $750,000 or more a year.

These IRMAAs apply whether you receive coverage through a standalone Part D plan or a Medicare Advantage plan that includes drug coverage.

The surcharge for Part D is paid directly to Medicare, not to your plan provider.

Most people have their Part D IRMAA taken out of their Social Security check. If it isn’t deducted from your check, you’ll receive a separate bill from Medicare.

If you don’t pay the Part D IRMAA, you’ll lose your Part D coverage.

The Medicare surcharge is based on your tax return from two years prior — which may not accurately reflect your current financial situation.

Filling out a readjustment form can resolve the problem and save you money.

Appeals are processed by the Social Security Administration, not the U.S. Centers for Medicare & Medicaid Services.

You must either call the Social Security Administration at 800-772-1213 or request an adjustment in writing.

If you believe your IRMAA should be adjusted due to a life changing event, you need to fill out Form SSA-44 and provide supporting documents to prove your income is lower.

The form includes a list of eight situations that may eliminate or reduce your income-based premium hike.

If you’ve retired or transitioned to a part-time job, you may qualify to have your Medicare premiums reduced due to work stoppage or work reduction.

Supporting documents may include a marriage certificate, a spouse’s death certificate and copies of your pay stubs.

If the Social Security Administration reviews and approves your appeal, your monthly premiums will be corrected.

If your request is denied, you have a right to appeal the denial in a hearing.

In other cases, you may disagree with the tax information used to determine your IRMAA.

In these situations, you may not need to fill out the life-changing event IRMAA form. Contact the Social Security Administration directly to verify.

Other documentation, such as a signed copy of your tax return or a transcript from the IRS, will be required.

If the Social Security Administration reviews and approves your appeal, your monthly premiums will be adjusted or eliminated.

If your request is denied, you have a right to appeal the denial in a hearing.