How many people are in Medicare’s IRMAA?

How many people are in Medicare’s IRMAA?

That is the question.

When it comes to figuring out how many people are in Medicare’s IRMAA the number comes down to who you ask and what they really want you to know when they are answering it.

Within the financial industry the reply is typically “less than 5% of Medicare beneficiaries reach IRMAA” as there seems to be a acceptance of a report from Medicare.org that is most likely using a study from back in 2009.

Recently, CNBC, when it comes to IRMAA,  published that “roughly 7% of all retirees or 4.3 million people enrolled into Medicare reached IRMAA”.

So, now it comes down to who you should believe or if IRMAA really even matters. We know that as less than 10% of all Medicare beneficiaries reach IRMAA and that is most likely what those telling you these numbers want you to believe.

The reality, though, of how many people are in Medicare’s IRMAA can easily be found through the sources provided by those who created it in the first place which is the Federal Government.

The first step in figuring out how many people are in Medicare’s IRMAA is to look at the rules and regulations of retirement first.

The rules and regulations are:

1. In retirement, to receive your Social Security benefit you must accept Medicare Part A…that is the law.

Unfortunately, there are other Parts to Medicare, Parts B and D, and these Parts not only have costs you must pay, but they are also the ones specifically associated with IRMAA.

2. Under federal law when it comes to IRMAA only those who are enrolled into Medicare Parts B and D can be subject to IRMAA.

Meaning if you are not enrolled into either or Medicare Part B and Part D you can not be charged IRMAA.

3. When to comes to federal law anyone who is “receiving Extra Help” in terms of affording their Medicare Part B and or Part D premiums can not be charged IRMAA too.

So, if we ask the same question to the Federal Government the answer will be quite different than almost everyone in the financial industry.

According to the federal government, through the Medicare Board of Trustees (MBT) Report of 2022, there were 58.3 million people enrolled into Medicare Part B and 49.9 million people enrolled into Part D in 2021.

Roughly 27% of both Medicare Part B and D beneficiaries were receiving “Extra Help” in affording their premiums which disqualifies them from being in IRMAA.

That leaves 42.6 million Part B beneficiaries and 36.5 million Part D beneficiaries subject to IRMAA.

The MBT Report of 2022 is also reporting that in 2021 over 4.8 million Part B beneficiaries were subject to IRMAA or 11.26% while 3.9 million Part D beneficiaries reached it or 10.70%.

By 2022 the MBT reported that the number of Medicare beneficiaries in IRMAA increased by about a 1 full percentage point as 12.22% of available Part B beneficiaries were in IRMAA while 11.97% of Part D beneficiaries reached it.

Where are retirees headed in terms of IRMAA?

The Trustees of Medicare have also gone out of their way to project how many Medicare beneficiaries will reach IRMAA annually over the next 8 years.

In 2023 roughly 15.29% of available Part B Medicare beneficiaries will reach IRMAA while 14.94% of Part D beneficiaries will reach it. Projections are stating they will pay $16.1 billion in IRMAA surcharges.

By 2026 the percentage are 18.95% for Part B and 18.39% for Part D. They should expect to pay an extra $32.3 billion in IRMAA surcharges.

Finally, in 2031 25.57% of available Part B beneficiaries will be in IRMAA along with 24.91% for Part D. The total in IRMAA surcharges will reach $63.8 billion.

Here is a breakdown of the MBT’s 2022 projections of IRMAA:

The number of people reaching IRMAA is much higher than being advertised by the financial industry and with Medicare premiums projected to inflate by over 6.00% the amount of costs may be more than anyone has planned for.