What is IRMAA and how much can it add to my Medicare costs?
The short answer
IRMAA is an income-related surcharge added to Medicare Part B and Part D premiums for people above certain income thresholds. It can add a few hundred to over a thousand dollars per year depending on your income.
The full explanation
IRMAA stands for Income-Related Monthly Adjustment Amount. It is not a penalty for doing anything wrong. It simply means that Medicare charges higher-income beneficiaries more for their Part B and Part D coverage than the standard premium.Social Security determines whether you owe IRMAA by looking at your tax return from two years prior. So if you are enrolling in Medicare in 2025, they are looking at your 2023 income. The surcharge kicks in above a certain income threshold, which adjusts slightly each year, and then increases in steps as income rises. At the highest income tier, the added amount for Part B alone can be several hundred dollars per month on top of the standard premium.Part D plans also carry an IRMAA surcharge at those same income levels, billed separately from whatever your plan's premium is.If your income has dropped significantly since that two-year-old tax return, because of retirement, the death of a spouse, or another life-changing event, you can appeal IRMAA using Form SSA-44. This allows Social Security to use a more recent income figure instead.The specific dollar amounts change annually, so rather than cite figures here that may be outdated, it is worth checking the current IRMAA brackets at medicare.gov or talking with an advisor who tracks those numbers.
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