What Is IRMAA and How Does It Affect Your Medicare Costs?

If you're enrolled in Medicare—or planning to be—you may have heard of something called IRMAA. No, it's not a new type of Medicare plan. It stands for Income-Related Monthly Adjustment Amount, and it can significantly impact what you pay each month for your Medicare Part B and Part D coverage.

Let’s break down what IRMAA is, who it affects, and how to plan for it.

What Is IRMAA?

IRMAA is an additional monthly premium charged to higher-income Medicare beneficiaries. It applies to both:

• Part B (Medical Insurance) — which covers things like doctor visits and outpatient care.
• Part D (Prescription Drug Coverage) — which helps pay for medications.

While most Medicare enrollees pay a standard monthly premium, those with higher incomes pay an extra amount on top of that. This extra cost is what’s referred to as IRMAA.

Who Has to Pay IRMAA?

IRMAA applies if your Modified Adjusted Gross Income (MAGI) from two years ago exceeds certain thresholds. That means your 2023 tax return is used to determine your 2025 premiums.

For 2025, IRMAA kicks in if your MAGI is:

• Over $106,000 (single filers)
• Over $212,000 (married couples filing jointly)

If your income falls below those thresholds, you’ll only pay the standard premiums.

How Much More Could You Pay?

The amount of IRMAA you pay depends on your income tier. The higher your income, the higher your IRMAA surcharge. These amounts are set annually by the Social Security Administration and apply in addition to your regular Part B and Part D premiums. The 2025 IRMAA premiums can be found at Medicare.gov.

It’s important to note that Part D IRMAA is paid separately—not to your plan provider, but directly to Medicare.

Can You Appeal IRMAA?

Yes, you can. If your income has dropped due to a life-changing event, such as:

• Retirement
• Loss of income-producing property
• Divorce
• Death of a spouse

…you may be able to request a reduction or removal of your IRMAA. You’ll need to file Form SSA-44 with documentation that supports your case. If approved, your IRMAA amount will be adjusted accordingly.

How Is IRMAA Paid?

• If you receive Social Security or Railroad Retirement benefits, IRMAA is automatically deducted from your benefit check.
• If you don't receive those benefits, you’ll get a bill from Medicare that can be paid online, via online banking, or by check through the mail.

Why It Matters for Your Planning

If you’re approaching Medicare eligibility and have higher income, IRMAA should be part of your financial planning. Your current income may qualify you for IRMAA, but if you're retiring soon, your income may drop, and you could avoid or reduce these extra costs using the appeals process. Knowing that helps you avoid surprises—and gives you time to file an appeal if needed.

The Bottom Line

IRMAA can come as a surprise if you’re not expecting it, but it’s manageable with a little preparation. Understanding how your income affects your Medicare premiums can help you make smarter decisions about retirement timing, tax strategies, and health plan choices.

Need help?

Do you have questions about how IRMAA might impact you—or need help navigating your Medicare options? We’re here to help. Contact our office for personalized guidance tailored to your income and healthcare needs.