What is IRMAA?

If you've ever opened your Medicare statement and thought, “Why is my premium higher than someone else's?” you are not alone. Many people are surprised to learn that Medicare premiums aren’t always one-size-fits-all. For higher earners, there's a little-known surcharge that can impact your monthly costs. It’s called IRMAA, and understanding what it is (and how it’s calculated) can make your Medicare costs feel more predictable.

Why Your Medicare Premium Might Be Higher Than Expected

IRMAA stands for Income Related Monthly Adjustment Amount. In short, IRMAA is a potential extra charge added to your Medicare Part B or Part D premium that is determined based on your income taxes from 2 years prior.

In 2025, the standard Medicare Part B premium amount is $185. Most people pay that standard Part B premium amount. However, if your modified adjusted gross income (as reported on your IRS tax return from 2 years ago) is above a certain amount, you’ll pay the standard premium amount as well as an Income Related Monthly Adjustment Amount (IRMAA) on both Part B and D.

Related: Are Medicare Premiums Income Based?

How You'll Find Out If You're Paying More

When you first enroll in Medicare, the Social Security Administration will review your income and send a letter if IRMAA applies to you. After that, they’ll reassess your income each year and send an updated notice if your premium changes, often in January. These letters typically arrive by mail and are sent separately from your standard Medicare communications.

IRMAA and Medicare Part D Drug Costs

If you have a higher income, you will also pay more for your Medicare Part D drug coverage. You’ll also have to pay this extra amount if you’re in a Medicare Advantage Plan that includes drug coverage, even if your premium is supposed to be $0 per month. 

Can You Appeal an IRMAA Decision?

If you are wondering if you can appeal an IRMAA decision, the answer is yes, and in some cases, you should. If you believe the income used to calculate your IRMAA is incorrect or no longer reflects your current situation, you have the right to appeal. This often applies if you've experienced a life-changing event such as:

• The death of a spouse
• Divorce/annulment or marriage
• A significant loss of income
• An inheritance or sale of property that increased your income
• Work reduction or job loss
• Loss of pension income
• Employer settlement payment

The Social Security Administration allows you to request a reconsideration and submit documentation to support your case. While not guaranteed, a successful appeal can lower or even remove the IRMAA charge.

No matter what, the increase could be temporary, lasting about one year if the reason for the increased income was for something that happened one time. Again, the IRMAA assessment is made based on information presented in income taxes filed 2 years prior.

Even before you begin Medicare, it’s helpful to have a clear picture of your potential healthcare expenses. If you have questions about your Medicare costs or coverage, our team of licensed insurance professionals is here to provide answers and offer unbiased guidance tailored to your needs.

Source: Medicare.gov

This is an updated blog that was originally published in 2022.

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