What Is IRMAA
IRMAA, or the Income-Related Monthly Adjustment Amount, is a premium surcharge applied to
Medicare Part B (medical insurance) and Part D (prescription drug coverage) for individuals with
high income. It is an important aspect of the Medicare program that affects a small percentage
of beneficiaries but has a significant impact on their out-of-pocket costs for healthcare.
How IRMAA works
IRMAA is determined based on an individual’s Modified Adjusted Gross Income (MAGI), which
is the total of their taxable income and tax-exempt interest income, as reported on their federal
tax return two years prior to the current year. The MAGI threshold for IRMAA is updated
annually and is based on the Social Security Administration’s (SSA) national average premium.
For the current year (2024), individuals with a MAGI above $103,001 for single
filers and above$206,000 for joint filers are subject to IRMAA for Medicare
Part B & D. For those with a MAGI above $129,000 for single filers and above $258,000 for joint
filers, the IRMAA amount increases based on the individual’s income level.
Here are the brackets for Part B:
| Beneficiaries who file individual tax returns with modified adjusted gross income: | Beneficiaries who file joint tax returns with modified adjusted gross income: | Income-Related Monthly Adjustment Amount |
Total Monthly Premium Amount |
| Less than or equal to $97,000 | Less than or equal to $194,000 | $0.00 | $174.70 |
| Greater than $97,000 and less than or equal to $123,000 | Greater than $194,000 and less than or equal to $246,000 | $65.90 | $244.60 |
| Greater than $123,000 and less than or equal to $153,000 | Greater than $246,000 and less than or equal to $306,000 | $164.80 | $349.40 |
| Greater than $153,000 and less than or equal to $183,000 | Greater than $306,000 and less than or equal to $366,000 | $263.70 | $454.20 |
| Greater than $183,000 and less than $500,000 | Greater than $366,000 and less than $750,000 | $362.60 | $559.00 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | $395.60 | $594.00 |
Here are the brackets for Part D:
| Beneficiaries who file individual tax returns with modified adjusted gross income: | Beneficiaries who file joint tax returns with modified adjusted gross income: | Income-related monthly adjustment amount |
| Less than or equal to $97,000 | Less than or equal to $194,000 | $0.00 |
| Greater than $97,000 and less than or equal to $123,000 | Greater than $194,000 and less than or equal to $246,000 | 12.90 |
| Greater than $123,000 and less than or equal to $153,000 | Greater than $246,000 and less than or equal to $306,000 | 33.30 |
| Greater than $153,000 and less than or equal to $183,000 | Greater than $306,000 and less than or equal to $366,000 | 53.80 |
| Greater than $183,000 and less than $500,000 | Greater than $366,000 and less than $750,000 | 74.20 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | 81.00 |
The IRMAA surcharge ranges from 35% to 85% of the standard Part B premium and is applied monthly to the individual’s Part B premium amount. Similarly, the IRMAA surcharge for Medicare Part D ranges from 15% to 35% of the national base premium.
Impact of IRMAA on beneficiaries
IRMAA can have a significant impact on Medicare beneficiaries, as it can add hundreds of dollars to their monthly premium costs for Part B and Part D coverage. The surcharge can result in a significant increase in out-of-pocket expenses for high-income individuals, making Medicare less affordable for them.
It is important for individuals to understand the impact of IRMAA on their Medicare coverage and to take steps to manage their costs, such as considering alternative coverage options or adjusting their income to stay below the IRMAA threshold.
Appealing IRMAA
Individuals who believe they have been wrongly assessed with IRMAA can file an appeal with the Social Security Administration (SSA). The SSA will review the individual’s circumstances, such as changes in their income or marital status, and determine if they are eligible for a lower IRMAA amount or if they are exempt from the surcharge altogether.
Appealing IRMAA can be a complex process, and individuals may need to provide evidence of their income and other financial information to support their case. It is important to work with a Medicare specialist or financial advisor to understand the appeal process and gather the necessary information for a successful appeal.
Conclusion
IRMAA is a premium surcharge applied to Medicare Part B and Part D for high-income individuals. The surcharge can result in a significant increase in out-of-pocket costs for healthcare, making Medicare less affordable for those affected. Understanding IRMAA and the impact it can have on their coverage is important for individuals, and they should consider appealing IRMAA if they believe they have been wrongly assessed. With the help of a Medicare specialist or financial advisor, individuals can navigate the IRMAA process and ensure they have the coverage they need at a price they can afford.