Medicare is an essential part of healthcare for millions of Americans over 65, providing much-needed coverage for doctor visits, outpatient services, and preventive care. However, Medicare premiums, particularly for Part B, aren't a one-size-fits-all affair. You may be required to pay more based on your income, a system known as Income-Related Monthly Adjustment Amount (IRMAA).
Understanding how income impacts your Medicare Part B premium can help you plan your budget better and avoid surprises. In this article, we’ll explore how IRMAA works, who it affects, and what you can do if you disagree with your premium.
What is Medicare Part B?
Before diving into income-related adjustments, it’s important to review what Medicare Part B covers. Medicare Part B covers the outpatient side of your care, such as:
- Doctor visits
- Preventive screenings
- Outpatient tests
- Durable medical equipment
- Some injections and treatments received in a clinic
Everyone with Part B pays a monthly premium. Most people pay the standard premium, but higher-income individuals pay more.
What Is IRMAA?
IRMAA is an additional surcharge added to your Part B premium if your income is above a certain level. Medicare looks at your modified adjusted gross income (MAGI) from two years prior to decide if you owe IRMAA.
That means:
- Your 2026 premium is based on your 2024 tax return.
This system allows Medicare to adjust premiums fairly based on income, while keeping standard premiums lower for most beneficiaries.
When Does IRMAA Apply?
Most people do not pay IRMAA. You will only owe the surcharge if your income exceeds set limits.
In 2025, IRMAA applies if your 2023 modified adjusted gross income is above these levels:
- If your income in 2023 was above $106,000 (individual)
- Or above $212,000 (married filing jointly)
How IRMAA Affects Your Part B Premium
IRMAA adds an extra amount on top of the standard Part B premium. The higher your income, the higher the adjustment. There are several income brackets, and each bracket has a different surcharge.
You don’t have to calculate anything yourself. If you owe IRMAA:
- Medicare reviews your IRS tax information
- You receive an official letter with your adjusted premium
- The amount is automatically deducted from your Social Security benefit
If you’re not collecting Social Security yet, you’ll receive a bill instead.
Can You Appeal an IRMAA Decision?
Yes — and many people successfully do.
You can appeal IRMAA if you experience a life-changing event that significantly reduces your income, such as:
- Retirement
- Divorce
- Death of a spouse
- Loss of income
- Loss of property
- Marriage
- Reduction in work hours
To appeal, you complete a form (Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event) through Social Security and provide proof of your change in income.
If approved, your IRMAA charge can be lowered or removed.
Planning Ahead for IRMAA
Because IRMAA is based on your tax return from two years earlier, planning ahead can help you avoid unnecessary costs. Strategies some people use include:
- Coordinating withdrawals from retirement accounts
- Paying attention to capital gains before Medicare begins
- Timing large one-time distributions
- Working with a financial advisor who understands Medicare rules
These simple steps can help you control your future Medicare premium.
Final Thoughts
If your income is higher, IRMAA may increase your Medicare Part B premium — but understanding how it works empowers you to plan, appeal when needed, and stay in control of your healthcare costs.
To feel more confident about Medicare and get answers to your questions, join a Medicare class on GetSetUp’s Medicare Hub. You’ll learn directly from expert instructors who break Medicare down into simple, easy-to-understand steps.
Reviewed By: Keith Gilbert