Who is IRMAA?

IRMAA is an acronym for Medicare’s Income-Related Monthly Adjustment Amount (IRMAA). This is a higher premium charged by Medicare Part B and Medicare Part D to individuals with higher incomes.

Social Security uses the most recent tax return provided by the IRS. This means that the IRMAA determination ends up being based on a tax return from two years ago. For example, the 2020 IRMAA determination is based on 2018 tax return.

The number used is the Modified Adjusted Gross Income (MAGI) and it is a sliding scale. The sliding scale currently starts at $85,000 for individual income and $170,000 for married filing jointly income.

Unlike late enrollment penalties, which can last as long as you have Medicare coverage, IRMAA is calculated every year. You may have to pay the adjustment one year, but not the next if your income falls below the threshold.

So if you will be starting Medicare in the next few years make sure are aware of this increase to your costs.  Let us know if you have any questions.

Below are links to Medicare’s website that has the charts for what you will pay for part B and part D premiums.