What is IRMAA? Well, IRMAA is not a beautiful woman! Income Related Monthly Adjustment Amount is a surcharge added to the Medicare Part B and Medicare Part D standard premiums for persons who have incomes above the income thresholds set annually by the Social Security Administration.
These thresholds are calculated using a person’s MAGI (modified adjusted gross income) from the two years prior as reported on your federal income tax returns. The MAGI combines your adjusted gross income and any non-taxable interest earned during the year.
In 2024, the base Medicare part B premium will be $174.70. The base part D premium varies. For individuals earning between $103,000 to $129,000 or couples earning between $206,000 to $258,000 their part B premium will be $244.60, which is $12.90/month surcharge. For individuals earning between $129,000 to $161,000 or couples earning between $258.000 to $322,000 the part B premium will be $349.40, which is a surcharge of $33.30/month. Individuals earning between $161,000 to $193,000 and couples between $322,000 to $386,000 pay $454.20, surcharge is $53.80/month. Individuals earning between $193,000 to $500,000 and couples between $386,000 to $750,000 pay $559.00, surcharge is $74.20/month. Finally, those earning over $500,000 both individuals or couples pay $594.00, which is $81.00/ month surcharge.
Events such as marriage, divorce, death, job changes, cashing out a retirement account or selling home or property can affect your adjusted gross income up or down and thus affect your Medicare Part B and D premiums. A person or couple can request Social Security to review their IRMAA due to qualifying life changing event such as: marriage, divorce, spouse’s death, reduced hours or loss of job, loss of income generating property, loss or reduction in pension or settlement from an employer. Events that will not qualify for review are loss of alimony or child support, voluntary sale of real estate and higher healthcare costs. Your AGI can be affected by selling property, taking minimum deductions from your retirement accounts, transactions that create a large capital gain or converting all funds in a traditional IRA to a Roth IRA in one transaction. It’s important to talk with a financial planner, CPA or your tax preparer to help you plan these transactions.
If you have an IRMAA and feel a life changing event created an increase in your AGI contact Social Security and request a SSA-44 form (Medicare Income-Related Monthly Adjustment Amount-Life-Changing Event). You can also schedule an interview by calling 1-800-772-1213.