Your Money
SURPRISE! IT’S YOUR EXTRA MEDICARE CHARGE
Why you might pay a higher premium … and what you can do about it
BY ANN KAYRISH
It can be a shock to learn that you’ll have to pay extra for Medicare—perhaps hundreds of dollars per month on top of standard premiums. But millions of people must pay an add-on charge, known as the Income-Related Monthly Adjustment Amount (IRMAA). “Medicare premiums are means-tested,” explains Samuel Philipson, a partner at accounting firm PKF O’Connor Davies in Bethesda, Maryland. “Higher income can mean higher premiums.”
IRMAA, which can apply if you have original Medicare, Medicare Advantage or Part D drug coverage, typically hits well-off enrollees, but many others have to pay it too. You can appeal the charge, though, and with some planning avoid IRMAA altogether.
HOW IRMAA WORKS
To determine whether you owe IRMAA and, if so, how much, the Social Security Administration (SSA) looks at your income from two years earlier; your 2026 IRMAA, for example, is based on your tax return for 2024. If your modified adjusted gross income—your adjusted gross income plus any tax-exempt interest—is above a certain amount, you’ll pay both the standard premium and an IRMAA surcharge. IRMAA amounts and income brackets are updated each year.
APPEALING THE CHARGES
The SSA sends out IRMAA notices annually. Broadly speaking, you can appeal the charge for two reasons. One, the SSA used the wrong tax information, which can happen if you filed an amended return. Two, your income has dropped due to what the SSA terms a “life-changing event.”
The most common life-changing event behind an appeal is retirement. If that or another form of work stoppage applies to you, advisers say you definitely should appeal.
The end of a marriage is another common life-changing event. If you’re newly single because of a divorce or your spouse’s death, IRMAA might be triggered by a joint return that no longer reflects your financial situation. This can be especially devastating for some widows and widowers, says Paula K. Almgren, an elder-law attorney in Lenox, Massachusetts. “Just when your income is going down, you’re being asked to pay more,” she says.
Other qualifying life-changing events have to do with loss of income beyond your control, including loss of pension income and loss of income-producing property because of natural disaster, disease, fraud or theft.
What won’t qualify you for an appeal, however, is selling your home, making a large traditional IRA withdrawal, or losing income because you’ve transferred or sold an income-producing property. The SSA considers these moves voluntary and routine—not reasons to reduce Medicare premiums. Fortunately, relief from IRMAA surcharges should come the following year, when a later tax return shows lower income.
You can begin the appeal process by calling the SSA at 800-772-1213 or going to ssa.gov to download Form SSA-561-U2 (for reconsideration based on incorrect tax information) or Form SSA-44 (to appeal based on a life-changing event). If you’re married, each spouse must separately file an appeal. If your appeal is approved, your premiums will be adjusted and any overpayments you’ve made will be refunded.
PLAN AND SAVE
You can avoid IRMAA, or at least minimize it, by thinking strategically. “Smart tax planning before retirement can lead to lower taxable income—and lower Medicare premiums later,” says Jarred Berman, a CPA from Northport, New York. Some moves to consider:
▶︎ Use the two to five years before retirement, before you’re on Medicare and when your income is already high, to cash in investments or sell a property so it doesn’t show up on a tax return used to determine IRMAA.
▶︎ Instead of taking a large withdrawal from a traditional IRA, spread withdrawals out over several years to keep your annual income lower. If you’re 70½ or older, you can also donate directly from your IRA to a charity via a qualified charitable distribution, which won’t be used in calculating income taxes or IRMAA.
▶︎ Draw on income that doesn’t count toward IRMAA. Health savings account withdrawals used for qualified medical expenses, Roth IRA withdrawals and reverse mortgage proceeds are all excluded.
Ann Kayrish writes the Bulletin’s Medicare Made Easy column.
AARP Is Fighting to Keep Medicare Strong for Older Americans
Medicare is a lifeline for millions of older Americans, helping them see doctors, afford prescriptions and live independently as they age. But the program must keep evolving to serve people’s needs.
That’s why AARP is pushing Congress to strengthen and protect both traditional Medicare and Medicare Advantage.
We’re calling on lawmakers to:
▶︎ Improve access to dental, vision and hearing services.
▶︎ Reduce out-of-pocket costs and ensure timely access to care.
▶︎ Crack down on misleading Medicare Advantage marketing and unfair denials of coverage.
▶︎ Support the Improving Seniors’ Timely Access to Care Act, which would streamline prior authorization in Medicare Advantage.
▶︎ Pass the bipartisan No UPCODE Act to end wasteful billing practices that drive up costs.
AARP won a historic victory that allowed Medicare to negotiate prescription drug prices—a long-overdue reform that is already saving older Americans billions. Now we’re working to protect that win against lobbying by the drug industry to weaken, delay or undo the law.
“As health care evolves, so must Medicare,” says AARP Chief Advocacy and Engagement Officer Nancy LeaMond. “That means protecting what works, fixing what doesn’t and ensuring every part of the program is delivering for the people it’s meant to serve.”