Summary: High-income Medicare beneficiaries may have to pay higher premiums, known as the Medicare Income Related Monthly Adjustment Amount (IRMAA). Below, you’ll learn more about IRMAA and how income brackets affect Medicare Part B and Part D monthly premiums. Estimated Read Time: 6 min
Medicare is the federal health insurance program for those over 65 or those with disabilities. When you enroll in Medicare, you must pay monthly premiums to maintain your medical and prescription drug coverage.
Some Medicare premiums are subject to adjustment based on your income. The Medicare Income-Related Monthly Adjustment Amount or IRMAA helps balance premium costs for high-earning beneficiaries.
This premium increase allows the federal government to assist low-income individuals by increasing the monthly premium cost for those with a higher monthly income. Thus, Medicare premiums more fairly fit everyone’s budget.
What Is Medicare IRMAA?
The Medicare Income-Related Monthly Adjustment Amount (IRMAA) is an additional fee that high-income individuals pay in addition to their monthly Medicare Part B premium and Medicare Part D prescription drug plan premium. IRMAA is determined by the Social Security Administration and is based on your tax return from two years prior. Currently, IRMAA is only applied to Medicare Part B and Medicare Part D premiums.
For 2023, IRMAA only applies to you if your Modified Adjusted Gross Income is more than $97,000 annually as an individual or above $192,000 as a married couple filing jointly. If your income is below these thresholds, you will not be responsible for paying additional fees on top of your standard premiums.
If IRMAA applies to you, you will receive a notice in the mail with your adjusted amount. This letter will also go into detail about the following:
- Social Security benefits
- Social Security Disability Income benefits
- Annual salary
- Retirement plan income
Once you are notified of your IRMAA determination, the additional charges will automatically apply to your monthly Medicare premiums. Each year, your IRMAA determination will be reviewed by Social Security to ensure you still qualify for the premium increase.
How is IRMAA Calculated?
Medicare’s IRMAA is calculated based on income brackets. You can determine which bracket you fall in by referring to your Modified Adjusted Gross Income (MAGI) from two years ago. Your MAGI is your adjusted gross income (found on line 11 of your IRS 1040 tax return form) plus any tax-exempt interest income found on line 2a.
For 2023, if your 2021 income was below $97,000 as an individual or below $194,000 as a married couple, you will not be subject to IRMAA.
However, if your income is higher than these threshold limits, your monthly premium for Medicare Part B and Medicare Part D will be higher. The charts below summarize the different income brackets and how they affect your monthly Medicare Part B and Part D premiums.
Medicare Part B IRMAA
Income-Related Monthly Adjustment Amounts (IRMAA) were implemented for Medicare Part B in 2007. Since then, high-income individuals enrolled in Medicare Part B pay a higher premium based on their income. According to the Centers for Medicare & Medicaid Services, roughly 7% of people with Medicare Part B pay a higher premium due to IRMAA.
2023 Medicare Part B IRMAA Premium Chart
|Individual Tax Return (in 2021)||Joint Tax Return (in 2021)||File Married & Separate Tax Return||2023 Monthly Part B Premium|
|$97,000 or less||$194,000 or less||$97,000 or less||$164.90|
|above $97,000 up to $123,000||above $194,000 up to $246,000||N/A||$230.80|
|above $123,000 up to $153,000||above $246,000 up to $306,000||N/A||$329.70|
|above $153,000 up to $183,000||above $306,000 up to $366,000||N/A||$428.60|
|above $183,000 and less than $500,000||above $366,000 and less than $750,000||above $97,000 and less than $403,000||$527.50|
|$500,000 or above||$750,000 or above||$403,000 or above||$560.50|
Medicare Part D IRMAA
Medicare Part D IRMAA went into effect in 2011 after the passing of the Affordable Care Act in 2010. As a result, high-income individuals enrolled in a Medicare Part D plan must pay an income-related monthly adjustment amount in addition to their plan premium. Per the Centers for Medicare & Medicaid Services, roughly 8% of people with Medicare Part D pay an income-related monthly adjustment amount.
Medicare Part D IRMAA amounts are either deducted from your Social Security benefit check or paid directly to Medicare, even if you typically pay your plan premium directly to your Part D plan carrier.
2023 Medicare Part D IRMAA Chart
|Single Tax Return (in 2021)||Joint Tax Return (in 2021)||File Married & Separate (in 2021)||2023 Monthly Part D Premium|
|$0 – $97,000||$0 – $194,000||$0 – $97,000||Your Part D plan premium|
|$97,001 – $123,000||$194,001 – $246,000||N/A||Your Part D plan premium +$12.20|
|$123,001 – 153,000||$246,001 – $306,000||N/A||Your Part D plan premium + $31.50|
|$153,001 – $183,000||$306,001 – $366,000||N/A||Your Part D plan premium + $50.70|
|$183,001 – $499,999||$366,001 – $749,999||$97,001 – $403,000||Your Part D plan premium + $70.00|
|$500,000 +||$750,000 +||$403,001 +||Your Part D plan premium + $76.40|
How to Appeal IRMAA
If you believe you unfairly received an IRMAA determination or have had a substantial change in income over the last two years, you can appeal Social Security’s decision. An appeal must be received within 60 days of the initial determination for the year to be processed by Social Security.
There are two situations where Social Security may grant an appeal. These are:
- Incorrect tax information was used to determine IRMAA
- A life-changing situation significantly impacted your annual income
If you believe that the IRS provided incorrect tax information to Social Security when determining IRMAA, you must be able to prove this. In many cases, an amended tax return will be sufficient evidence for Social Security.
If you have experienced a life-changing event drastically impacting your income, Social Security will consider this when reviewing your appeal application.
Life-changing events can include:
- Death of a spouse
- Loss or reduction of pensions
- Reduction in working hours/salary
- Cessation of work
- Loss of income from income-generating property
Providing ample documentation as evidence will help the appeal process go quicker. The more evidence you have to support your appeal, the easier it will be for Social Security to make its new determination. You can provide original documents or certified copies as evidence of your life-changing event. Preferred documentation includes:
- Federal income tax returns from the years in question
- Marriage/death certificate
- Divorce decree
- Copy of recent pay stubs
- Letter indicating reduction/loss of pension
- Statement from insurance adjuster indicating loss of an income-generating property
- Signed statement from an employer indicating cessation/reduction of work
In some cases, Social Security may accept additional evidence or documentation if you do not have one of the preferred documents available. You must contact Social Security and speak with a representative to explore your options.
You can contact your local Social Security office to submit your appeal and supporting documentation. You can also download the Medicare Income-Related Monthly Adjustment Amount Life Changing Event (SSA-44) and fax or mail it to the nearest Social Security office.
Are Medicare IRMAA Payments Tax Deductible?
Your Medicare Part B and Part D premiums, including IRMAA, are tax deductible. For your Medicare premiums to be tax deductible, you must complete a Schedule A (Form 1040) to itemize your deductions. You can only deduct your Medicare premiums if your total medical and dental deductions exceed 7.5% of your adjusted gross income.
How To Get Help Understanding IRMAA
If you believe you may be subject to IRMAA, it is vital to budget for the additional monthly premium costs. If you need help understanding your Medicare costs, our licensed insurance agents can help. Call us and our team can help walk you through your Medicare premium costs and help you determine whether you’ll need to worry about IRMAA.
2023 Medicare Parts A & B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts, Centers for Medicare & Medicaid Services. Accessed August 2023
Medicare Costs, Medicare.gov. Accessed August 203