What is IRMAA?
By Christopher L. Hudson, CIMA
IRMAA, or Medicare’s income-related monthly adjustment amount, is a surcharge above and beyond the standard Medicare Part B and Part D premiums for people with income above a certain level.
IRMAA is determined by your Modified Adjusted Gross Income (MAGI), as shown on your federal tax return, from two years prior (meaning your 2023 Medicare premiums will be based on your Modified Adjusted Gross Income from 2021). This amount is recalculated each year.
For 2023 there are five IRMAA related brackets. The size of the surcharge is based on a sliding scale and increases as one’s income passes through each of the brackets.
IRMAA initially kicks in if your 2021 Modified Adjusted Gross Income (MAGI) was over $97,000 for a single tax filer and over $194,000 for a married couple filing jointly. If you are above the income limit for the first bracket, your Part B monthly premium will increase to $238.10 in 2023 and your monthly Part D premium will be your plan premium plus an additional $12.40. For individuals in the highest income bracket (2021 MAGI of $500,000+ for a single filer and $750,000 for a married couple filing jointly), the Part B monthly premium would be $578.30 and the Part D monthly premium would be the plan premium plus an additional $77.90.
If both you and your spouse are on Medicare, you file a joint tax return, and your household MAGI is above the income threshold, you will both pay the premium adjustment.
Part B IRMAA will automatically be added to your Part B premium bill. If you already have your Part B premium deducted from your Social Security check, the additional IRMAA amount will automatically be deducted each month. Your Medicare Part D IRMAA will also automatically be deducted from your Social Security check. If your Social Security benefit is not large enough to cover the additional amount, or if you are not yet receiving Social Security retirement benefits, you will receive a separate bill. Your Part D IRMAA is paid directly to Medicare, not to your plan or former employer. You are the one responsible for paying the Part D IRMAA, even if your employer or a third party (like a teacher’s union or retirement system) pays for your Part D plan premium.
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