Income Related Monthly Adjustment Amount (IRMAA)

Income-related monthly adjustments took effect beginning January 1, 2011. If your income is above a certain level, you may have to pay an Income Related Monthly Adjustment Amount (IRMAA) in addition to your Part B premium and Part D premium.

Medicare Part B
By law, Medicare Part B premiums must cover 25% of the costs incurred by that part of the program. The Centers for Medicare and Medicaid Services estimate the cost to cover all Part B services on an annual basis and set the standard premium to equal 25% of that cost. However, if you earn more than certain levels, you may have to pay a greater percentage of the program costs.

Medicare Part D
If your income is above a certain level, then you are responsible for a larger portion of the total cost of your Part D benefit coverage. In addition to the normal premium paid to a plan for drug coverage, whether through a Medicare Advantage or stand alone Part D plan, you will pay an income-related monthly adjustment amount (IRMAA). Each insurance company determines its own Part D premium. The additional charge for the IRMAA is generally paid separately.

The IRMAA for Part B and Part D is calculated according to the adjusted gross income you reported on your IRS tax return two years ago.

Your Part B premium and, if applicable, Parts B and D IRMAA is withheld from your Social Security benefit payment.

If you are not yet receiving your Social Security benefit payment and are paying your Part B premium directly, you will receive a Medicare premium bill from CMS. This bill will include the Parts B and D IRMAA amounts due, if this applies to you.

For questions about your Part B or Part D-IRMAA amount, call Social Security at 1-800-772-1213.

Q: Can the IRMAA be reduced?
A: If you had a major life-changing event and your income has decreased, you may request a reduction in your income related monthly adjustment amount. The Social Security Administration will request you download and complete Form SSA-44 and documentation of the adjusted income and life changing event.

Q: Is the IRMAA amount permanent or will it change?
A: The 2023 IRMAA amount is based on your 2021 tax filing. Under the current law, any 2024 Part B and D IRMAA will be based on your 2022 tax filing. So, yes, future fluctuations of income could reduce, eliminate or increase your IRMAA. Talk with your financial advisor and tax preparer about the timing of any taxable events.

Q: Is IRMAA included in my Part C Medicare Advantage or Part D Prescription drug plan premium?
A: No, you pay the IRMAA separately and along with your Part B premium. When your local agent quotes you a Part C or Part D premium, they are unaware of whether you are subject to IRMAA. In our Medicare 101 educational webinar, when we discuss the Part B premium we point out it could be higher or lower based on your income.


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