There’s a common misconception about Medicare: that it’s free.
“Medicare definitely is not free,” said Jen Teague, NCOA’s Director for Health Coverage and Benefits. “While true that most enrollees don’t pay premiums for Part A coverage, they are responsible for a number of other expenses each year.”
Under Original Medicare, those expenses include Part B premiums as well as Part A and Part B deductibles and co-pays. Medicare Part D (prescription drug coverage) carries out-of-pocket costs as well, including premiums, deductibles, and coinsurance.
And then there’s IRMAA—an additional expense that some Medicare enrollees must pay. If you’re wondering, “What is IRMAA and how is it calculated?” you’ve come to the right place.
What is the Medicare income-related monthly adjustment amount, or IRMAA?
Short for the “income-related monthly adjustment amount,” IRMAA is a surcharge imposed on higher-income Original Medicare and Medicare Advantage enrollees. Currently, approximately 7% of Medicare Part B and 8% of Medicare Part D beneficiaries are subject to IRMAA.1
First established as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, IRMAA’s purpose is to help ensure the program’s financial viability and stability.2 Initially, the surcharge applied only to Part B premiums. The Affordable Care Act expanded it to include Part D prescription drug coverage as well.2
How is IRMAA calculated?
The Social Security Administration (SSA) decides whether or not you must pay this additional monthly fee using your modified adjusted gross income (MAGI) from two years prior.1 (2023 IRMAA calculations are based on 2021 tax returns, for example). Your MAGI is your adjusted gross income with a few additional untaxed items added in.
Each year, the SSA establishes income brackets that determine your IRMAA responsibility. The agency will mail you an official notice, called an Initial IRMAA Determination, if you are subject to additional Part B and Part D payments.
The amount you pay depends on whether you file an individual or joint tax return. In 2024, those numbers are:
Medicare Part B | |||
|
Individual filers with a MAGI of: |
Joint filers with a MAGI of: |
IRMAA adjustment amount: |
Total monthly premium amount: |
|
≤ $103,000 |
≤ $206,000 |
$0 |
$174.70 |
|
$103,001–$129,000 |
$206,001–$258,000 |
$69.90 |
$240.60 |
|
$129,001–$161,000 |
$258,001–$322,000 |
$174.40 |
$349.40 |
|
$161,001–$193,000 |
$322,001–$386,000 |
$279.50 |
$454.20 |
|
$193,001–$500,000 |
$386,001–$750,000 |
$384.30 |
$559 |
|
≥ $500,000 |
≥ $750,000 |
$419.30 |
$594 |
Source: CMS.gov
Medicare Part D | ||
|
Individual filers with a MAGI of: |
Joint filers with a MAGI of: |
IRMAA adjustment amount: |
|
≤ $103,000 |
≤ $206,000 |
$0 |
|
$103,001–$129,000 |
$206,001–$258,000 |
$12.90 |
|
$129,001–$161,000 |
$258,001–$322,000 |
$33.30 |
|
$161,001 –$193,000 |
$322,001–$386,000 |
$53.80 |
|
$193,001–$500,000 |
$386,001–$750,000 |
$74.20 |
|
≥ $500,000 |
≥ $750,000 |
$81 |
Source: CMS.gov
Note that Part D monthly premiums vary depending on what plan you may be enrolled in. Simply add the IRMAA amount to what you currently pay to determine what your adjusted premium cost will be.
Am I eligible for an IRMAA adjustment?
Under certain circumstances, you might be. These include:4,5
- Your income has decreased due to a life-changing event (such as marriage, divorce, or unemployment)
- You filed an amended tax return to correct a mistake on it, but the SSA used the wrong one for your IRMAA determination
How do I request an IRMAA adjustment?
If you received an Initial IRMAA Determination letter and you disagree with it, you may request a “reconsidered determination” (also known as a Level 2 Appeal).
If you’ve experienced a life-changing event, you can ask the Social Security Administration to reduce or eliminate your IRMAA amount by completing and submitting Form SSA-44.
You may be wondering, “what documentation do I need to provide to support my request?” The SSA requires that you provide proof of income reduction when you ask for an IRMAA adjustment. Before you get started on the form, it’s helpful to have the following information on hand:
- Your applicable 1040 tax return(s)
- Evidence of your life-changing event (official marriage certificate, divorce decree, or employer separation letter, for example)
Once you’ve gathered your documentation and completed the form, you may fax or mail it to your local Social Security office. If you have questions or need help filling it out, you may call 1-800-772-1213, Monday – Friday, 8 a.m. – 7 p.m. (TTY: 1-800-325-0778).
If you filed an amended tax return that demonstrates reduced income, you may request an IRMAA adjustment by calling 1-800-772-1213.
Can I appeal my IRMAA decision?
Yes. If you disagree with the SSA’s reconsidered determination for any reason, you have a right to file a Level 3 (OMHA) Appeal.
To do so, you must:6
- File a request for a hearing within 60 days of receiving your reconsideration denial.
- Submit any new evidence you may have to support your appeal request.
“I like to warn people that this is a rather complicated process,” Teague advised. “There are specific steps to follow and Medicare lays them out. That said, there’s a lot of legalese to wade through and decipher.”
For this reason—while not required—you may wish to consult a lawyer or other professional adviser familiar with how the Medicare appeals process works.
Your reconsidered determination denial letter includes instructions on how to make a Level 3 Appeal. If you’ve misplaced the letter or have questions, contact Social Security at 1-800-772-1213, Monday – Friday, 8 a.m. – 7 p.m. (TTY: 1-800-325-0778).
Need additional help with Medicare? NCOA is here for you.
NCOA partners with licensed Medicare benefits advisers who are committed to helping you choose the right Medicare coverage. These partners all meet our strict Standards of Excellence, which means their advice will be practical, easy to understand, and focused on your unique needs. Learn more.
You may also get in touch with your local State Health Insurance Assistance Program (SHIP) for personalized, one-on-one Medicare counseling.
"I encourage everyone to appeal the SSA denial if that happens," Teague said. "It doesn't hurt to try."
Sources
1. Centers for Medicare & Medicaid Services. 2023 Medicare Parts A & B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts. Sept. 27, 2022. Found on the internet at https://www.cms.gov/newsroom/fact-sheets/2023-medicare-parts-b-premiums-and-deductibles-2023-medicare-part-d-income-related-monthly
2. Kitces.com. Nerd’s Eye View. New IRMAA Surcharges on Medicare Part B and Part D Taking Effect in 2018. November 29, 2017. Found on the internet at https://www.kitces.com/blog/irmaa-medicare-part-b-part-d-premium-surcharges-new-2018-magi-thresholds/
3. Centers for Medicare & Medicaid Services. 2023 Medicare Parts A & B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts. Sept. 27, 2022. Found on the internet at https://www.cms.gov/newsroom/fact-sheets/2023-medicare-parts-b-premiums-and-deductibles-2023-medicare-part-d-income-related-monthly
4. Social Security Administration. Request to lower an Income-Related Monthly Adjustment Amount. Found on the internet at https://www.ssa.gov/medicare/lower-irmaa
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