IRMAA, or Income-Related Monthly Adjustment Amount, affects the Medicare Part B premium by increasing the amount higher-income beneficiaries must pay. Here’s how it works:

  1. Income Brackets: IRMAA is applied based on your modified adjusted gross income (MAGI) from two years prior. For example, 2024 premiums are based on 2022 income.
  2. Thresholds and Tiers: There are several income thresholds, and each tier has a corresponding additional premium amount. As income increases, so does the IRMAA surcharge.
  3. Standard Premium: For those with incomes below the IRMAA thresholds, they pay the standard Medicare Part B premium, which is determined annually. For 2024, this standard premium is $174.70 per month.
  4. IRMAA Adjustments: The following are examples of how IRMAA can affect the Part B premium:
  • For individual filers with a MAGI above $103,000 and up to $129,000, or joint filers with a MAGI above $206,000 and up to $258,000, the Part B premium would be the standard amount plus an IRMAA of $70.00.
  • As the income brackets increase, the additional amount added to the standard premium also increases. The highest tier for individuals with a MAGI above $500,000 or joint filers above $750,000 includes an IRMAA of $395.60, resulting in a total monthly premium of $570.30.
  1. Notification: Beneficiaries receive a notice from the Social Security Administration informing them of their IRMAA and adjusted premium amount.
  2. Reevaluation: If you experience a significant life-changing event (such as retirement, marriage, divorce, etc.) that reduces your income, you can request a re-evaluation of your IRMAA.

Understanding how IRMAA impacts your Medicare Part B premium can help you better plan for healthcare costs in retirement, particularly if your income varies significantly year-to-year.

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