Medicare Premium Adjustments (IRMAA)
How income and life-changing events can affect Medicare Part B and Part D premiums
How income affects Medicare premiums
Most people pay a standard monthly premium for Medicare Part B and Medicare Part D. However, individuals with higher incomes may pay an additional amount known as the Income-Related Monthly Adjustment Amount (IRMAA).
IRMAA is determined using income information from your federal tax return from two years earlier. Because of this two-year look-back period, Medicare premiums may be based on income levels that no longer reflect your current financial situation.
Understanding Medicare Premiums
What Is IRMAA?
IRMAA stands for Income-Related Monthly Adjustment Amount.
It is an additional premium that applies to individuals with higher incomes who are enrolled in Medicare.
IRMAA may increase the monthly cost of:
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- Medicare Part B (medical insurance)
- Medicare Part D (prescription drug coverage)
The adjustment amount varies depending on income levels reported to the Social Security Administration.
The Two-Year Look-Back Rule
The Social Security Administration determines Medicare premium adjustments based on your Modified Adjusted Gross Income (MAGI) reported on your federal tax return.
They typically review the tax return filed two years prior to the year of coverage.
If your income exceeded certain thresholds during that tax year, you may pay higher premiums for Part B and Part D
Life-Changing Events
Sometimes income decreases significantly after a major life event, but Medicare premiums may still reflect higher income from two years earlier.
In these situations, it may be possible to request a review of your premium adjustment.
Examples of qualifying life-changing events include:
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- Retirement or reduction in work hours
- Loss of income-producing property
- Divorce or annulment
- Death of a spouse
- Loss or reduction of pension income
- Employer settlement payments
If a life-changing event significantly reduced your income, you may be able to request a reconsideration of your IRMAA determination.
Requesting an IRMAA Review
If you experience a qualifying life-changing event, you may request a review using:
This form allows you to report the life-changing event, provide your updated income information, and submit documentation supporting the change.
The Social Security Administration reviews the request and determines whether your Medicare premium can be reduced.