What is IRMAA?
Income-related monthly adjustment amounts (IRMAAs) refer to an amount a person pays in addition to their Medicare premiums if their income is above a certain level.
IRMAAs are based on a person’s adjusted gross income and may affect their Medicare premiums. The Social Security Administration (SSA) determines a person’s IRMAA. This is based on information provided by the Internal Revenue Service (IRS)
When a person makes more than the allowed income, Medicare adds a charge to the Part B premium, Part D (Medicare prescription drug coverage) premium, or both.
A person will get a notice about the adjusted amount and may make an appeal. The IRMAA charge can apply to a person who has enrolled in either Medicare Part B or Part D, or in both parts.
What is Medicare?
Medicare is a federal insurance plan for people aged 65 and over. Younger people may be eligible if they have a disability or end stage renal disease (ESRD). Medicare parts include:
Original Medicare, which includes Part A and Part B. Medicare Part A pays hospital costs. Medicare Part B pays outpatient doctor visits, provider services, durable medical equipment, and some home health care.
Medicare Part C, also called Medicare Advantage. This policy combines the benefits of Medicare Part A and Part B. People pay a premium for Medicare Part B and for Medicare Advantage.
Medicare Part D, a prescription drug plan. Some Medicare Advantage plans also include prescription drug plans.
Medicare Supplement Insurance, also called Medigap. These are policies that help pay out-of-pocket costs of original Medicare.
Private insurance companies supply Medicare Advantage, Medicare Part D, and Medigap.
Who decides the IRMAA?
The Centers for Medicare & Medicaid Services (CMS) calculate IRMAA and publish this amount yearly in the Federal Register.
Once the IRMAA calculations are complete, CMS inform the Social Security Administration (SSA). The SSA determine whether a person must pay more than the standard premium.
People must pay a premium for Medicare Part B and Part D. In 2024, the standard premium for Part B is $174.70. Medicare Part D premiums vary depending on the plan a person chooses.
The amount of an individual’s Part B premium, Part D premium, or both, may change based on their modified adjusted gross income (MAGI), which their Internal Revenue Service (IRS) tax return will report.
How IRMAA is applied
The SSA use the tax return from the IRS to decide whether there is a reason for an IRMAA. A person’s income from 2 years prior determines the surcharge.
Medicare may add an extra charge to the individual’s Medicare Part B basic premium charge, the Part D premium, or both.
A person will then get a written notice about the adjusted amount. The letter specifies the amount that the SSA will charge. A person has the right to appeal the adjustment.
IRMAA exceptions
Individuals who are eligible for supplemental security income (SSI) or Extra Help are exempt from getting an IRMAA notice.
SSI is a program that the SSA administer. It is a monthly benefit. People qualify if they:
have a low income
have a disability
are blind
are aged 65 and over
Extra Help is a program to help pay some of the out-of-pocket costs of Medicare Part D premiums. To get Extra Help, a person must:
have Medicare Part A, Part B, or both
live in the United States
have income and assets below specified limits
What details are in the IRMAA notice?
People get a cost-of-living adjustment notice explaining the IRMAA in detail.
In the notice, a person will find the following information:
what information the CMS used to determine the IRMAA
what the individual can do if the tax information is wrong
what the individual can do if the SSA used the wrong tax year
how to appeal if a life-changing event reduced reported income from the relevant tax year
How IRMAA is calculated
An individual’s IRMAA calculation is based on the person’s MAGI, together with their tax filing status. Since MAGI gets reported each year, the IRMAA can change every year.
Medicare Part B
If yearly income in 2022 was:
Individual tax return | Joint tax return | Married & separate tax return | Premium cost |
$103,000 or less | $206,000 or less | $103,000 or less | $174.70 |
above $103,000 up | above $206,000 up to | not applicable | $244.60 |
above $129,000 up | above $258,000 up to | not applicable | $349.40 |
above $161,000 up | above $322,000 up to | not applicable | $454.20 |
above $193,000 and | above $386,000 and | above $103,000 and | $559.00 |
$500,000 or above | $750,000 or above | $397,000 or above | $594.00 |
Medicare Part D
If yearly income in 2022 was:
Individual tax return | Joint tax return | Married & separate tax return | Premium cost |
$103,000 or less | $206,000 or less | $103,000 or less | Plan |
above $103,000 up | above $206,000 up to | not applicable | $12.90 + |
above $129,000 up | above $258,000 up to | not applicable | $33.30 + |
above $161,000 up | above $322,000 up to | not applicable | $53.80 + |
above $193,000 and | above $386,000 and | above $103,000 and | $74.20 + |
$500,000 or above | $750,000 or above | $397,000 or above | $81.00 + |
Premium calculation
Medicare may add the IRMAA surcharge, plus any late filing charges, to the Part B premium, Part D premium, or both.
If a person is enrolled in Medicare Advantage, there may be a reduction in the total charge.
Appealing the decision
The Office of Medicare Hearing and Appeals handle all appeals for Medicare Part B premiums. Individuals have the right to appeal if they believe that the adjusted premium is incorrect.
Several situations may indicate that an individual qualifies for a new determination. These include:
Situation | Cause |
|---|---|
a person filed an amended return for the tax year used to make the IRMAA determination | |
marriage |
The first step is to request a reconsideration of the determination. People can do this by calling the SSA at 800-772-1213.
Summary
The CMS calculates the IRMAA then sends this information to the SSA to determine whether a person must pay more than the standard premium. When a person makes more than the allowed income amount, Medicare may add an IRMAA to the Part B premium, Part D premium, or both.
The amounts are based on a person’s adjusted gross income, and Medicare adds them every month. This amount can change each year based on a person’s income.
If a person believes that there is a mistake with the assessment, they can go through an appeal process. An oral request for a reconsideration of the determination is the first step of an appeal.
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