How the IRMAA Surcharge Affects Your Medicare Premiums

The Income-Related Monthly Adjustment Amount (IRMAA) is an extra charge added to your Medicare Part B and Part D premiums if your income is above a certain level. IRMAA does not replace your regular premium, it stacks on top of it, so higher earners pay more each month for the same coverage as everyone else. The Social Security Administration (SSA), the federal agency that determines IRMAA based on your tax return, notifies you by mail if you owe the surcharge.

How IRMAA Is Calculated

The Centers for Medicare & Medicaid Services (CMS), the federal agency that administers Medicare, sets IRMAA using your modified adjusted gross income (MAGI), your adjusted gross income plus tax-exempt interest, from your tax return filed two years before the current coverage year. For example, your 2026 Medicare premiums are based on the income reported on your 2024 tax return. This two-year look-back means a high-income year, even one that's now in the past, can still raise your premiums today.

IRMAA uses a tiered structure: as your MAGI rises past each threshold, you move into a higher surcharge bracket. There are separate, but related, brackets for Part B and Part D, and both are recalculated and published annually by CMS. Because the exact dollar thresholds change most years, always check the current figures on Medicare.gov or CMS.gov rather than relying on a prior year's numbers.

How It Affects Your Monthly Bill

If you're subject to IRMAA, the extra amount is added directly to your standard Part B premium and, if you have Part D drug coverage, to your Part D premium as well. If you're enrolled in a Medicare Advantage plan that includes drug coverage, the Part D portion of IRMAA still applies and is typically billed separately by Social Security, not through your plan's premium. This can catch people off guard because the surcharge doesn't show up on the plan's bill, it comes through your Social Security deduction or a separate invoice.

For most people, IRMAA is deducted automatically from a Social Security or Railroad Retirement Board benefit payment, similar to how your standard premium is handled, see Medicare and Social Security for how these deductions typically work together. If you don't receive Social Security benefits, you'll get a bill from Medicare directly.

Appealing an IRMAA Determination

You can request a reconsideration if you believe SSA used outdated or incorrect income information, or if you've had a life-changing event since the tax year used in the calculation. Recognized life-changing events include marriage, divorce, death of a spouse, work stoppage or reduction, loss of income-producing property, loss of pension income, or an employer settlement payment. To appeal, you file Form SSA-44 with documentation showing the change, such as a more recent tax return or proof of the qualifying event.

This appeal process matters because IRMAA is reassessed every year based on updated tax data, so a surcharge tied to a one-time event, like a large retirement account withdrawal or a home sale, isn't necessarily permanent. If your income drops the following year, your premiums should adjust down in the corresponding coverage year without you needing to do anything extra, though filing an appeal for a documented life-changing event can speed up the correction.

Where IRMAA Fits Into Your Overall Medicare Costs

IRMAA is just one piece of what determines your total Medicare spending. Understanding how it interacts with your broader coverage choices, including whether you stay on Original Medicare or a Medicare Advantage plan, and whether you carry a Medigap policy, helps you plan more accurately. For a broader breakdown of premiums, deductibles, and out-of-pocket costs, see Medicare cost explained. If you're weighing supplemental options, comparing Medigap Plan G vs. Plan N can also help you budget around IRMAA rather than being surprised by it.

It's also worth understanding how IRMAA differs from other cost-related Medicare rules, such as the Medicare late enrollment penalty, which is based on enrollment timing rather than income. These are separate charges that can both appear on the same bill, so knowing which is which helps you address the right issue if your premium looks higher than expected. If you're navigating coverage alongside other benefits, resources on Medicare and Medicaid or Medicare and employer coverage can clarify how those programs interact with income-based rules like IRMAA.