How Medicare Defines Income for IRMAA:
Not all types of income are taken into consideration, however Medicare defines income for IRMAA to be “your adjusted gross income plus any tax-exempt interest you may have” or everything on lines 2a and 8b or the IRS form 1040 in tax-year 2020. Some examples of IRMAA income are:
|Social Security Benefits||Distributions From: |
|Wages||Traditional 401(k) |
|Pensions and Rental Income||Traditional IRA |
|Interest||Traditional 403(b) |
|Capital Gains||Traditional Sep-IRA |
|Dividends||Qualified Investments and Annuities |
Medicare IRMAA brackets for 2023:
Annually Medicare IRMAA brackets are reviewed and adjusted for both income levels and surcharge amounts for both Medicare Part B and Part D. Below you will find the current brackets and surcharges for both Medicare Parts B and D.
|Individual MAGI||Couple MAGI||Part B||Part D (per/mo) |
|< $97,000||< $194,000||$164.90||Premium (varies) |
|$97,000 - $123,000|
|$194,000 - $246,000||$230.80||Premium + $12.40 |
|$123,000 - $153,000||$246,000 - $306,000||$329.70||Premium + $32.10 |
|$153,000 - $183,000||$306,000 - $366,000||$428.60||Premium + $51.70 |
|$183,000 - $500000||$366,000 - $750,000||$527.50||Premium + $71.30 |
|>$500,000 ||>$750,000||$560.50||Premium + $77.90 |
How is IRMAA Determined:
Medicare will look at your past two years tax returns, which they receive from the IRS. Based on those tax returns, income levels will be identified and it will be determined where you fall on the scale of IRMAA income categories. If your income is at a level that you do reach an IRMAA bracket you will be notified by Social Security that your premiums will be adjusted and you will be automatically bill charged at that level.
Please note: Medicare can only charge you on income that you earn while you are enrolled in Medicare.
If you feel as though as you should not be in an IRMAA bracket, there is always the option to appeal. >In retirement income is a must, but it must be the right kind of income.
How to pay your Part B and Part D IRMAA
Part B IRMAA is automatically added to your monthly premium bill. Here are 5 ways you can pay your Part B premium:
Part D IRMAA must be paid directly to Medicare—not your plan or employer. It’s your responsibility to pay it even if your employer or a third party (e.g., retirement system) pays your Part D plan premiums. You’ll get a bill each month from Medicare for your Part D IRMAA and can pay it the same way you pay your Part B premiums.5
Can I appeal the IRMAA determination?
You can appeal the IRMAA determination – filing for a redetermination – if you believe that your calculation is erroneous. In addition, if you have had a life-changing event such as a loss of income or divorce, then you can refile or you can file for a redetermination using Form SSA-44.
If you do not agree with a redetermination, there is a formalized appeal process – the third level of appeal – technically called the Decision by Office of Medicare Hearings and Appeals (OMHA). (Note that this a different procedure from the appeal or grievance procedure when you receive denials of service from Medicare Parts A, B, or D.)