What (or Who) Is IRMAA and How Does It Affect Me?

Medicare is a federal health insurance program for people ages 65 and over and those with certain health conditions. It’s made up of several parts. In 2019, Medicare covered about 61.5 million Americans and is predicted to increase to 75 million by 2027.

Many parts of Medicare involve paying a monthly premium. In some cases, your monthly premium may be adjusted based on your income. One such case might be an income-related monthly adjustment amount (IRMAA).

IRMAA applies to Medicare beneficiaries who have higher incomes.

The main part of Medicare — Part A coverage — is hospital insurance. It covers inpatient stays at locations such as hospitals, skilled nursing facilities, and mental health facilities. IRMAA doesn’t affect Part A. In fact, most people don’t pay anything for Part A coverage.

Part B is medical coverage for various outpatient services, durable medical devices, and preventative care. An IRMAA can affect your Part B premium cost. Based on your annual income, a surcharge can be added to the standard Part B premium. Part D coverage is for prescriptions and IRMAA can also affect these premiums.

How much will my IRMAA be?

In 2022, the standard monthly premium for Part B is $170.10, which is up 15% from 2021. Depending on your yearly income, you may have an additional IRMAA surcharge.

This amount is calculated using your income tax information from two years ago. So, for 2022, your tax information from 2020 will be assessed.

Surcharge amounts vary based on your income bracket and how you filed your taxes. The table below can give you an idea of what costs to expect in 2022.

Yearly income in 2020: individualYearly income in 2020: married, filing jointlyYearly income in 2020: married, filing separatelyPart B monthly premium for 2022
≤ $91,000≤ $182,000≤ $91,000$170.10
> $91,000–$114,000> $182,000–$228,000$238.10
> $114,000–$142,000> $228,000–$284,000$340.20
> $142,000–$170,000> $284,000–$340,000$442.30
> $170,000–
< $500,000
> $340,000–
< $750,000
> $91,000–
< $409,000
≥ $500,000≥ $750,000≥ $409,000$587.30

There’s no standard monthly premium for Part D plans. The company offering the policy will determine its monthly premium.

The surcharge for Part D is also determined based on your income tax information from two years ago. As with Part B, things like your income bracket and how you’ve filed your taxes impact the surcharge amount.

The additional surcharge for Part D is paid directly to Medicare, not to your plan’s provider. The table below provides information on the Part D surcharge amounts for 2022.

Yearly income in 2020: individualYearly income in 2020: married, filing jointlyYearly income in 2020: married, filing separatelyPart D monthly premium for 2022
≤ $91,000≤ $182,000≤ $91,000your regular plan premium
> $91,000–$114,000> $182,000–$228,000your plan premium + $12.40
> $114,000–$142,000> $228,000–$284,000your plan premium + $32.10
> $142,000–$170,000> $284,000–$340,000your plan premium + $51.70
> $165,000–
< $500,000
> $340,000–
< $750,000
> $88,000–
< $409,000
your plan premium + $71.30
≥ $500,000≥ $750,000≥ $409,000your plan premium + $77.90

What can I do if I don’t think I should pay an IRMAA?

If you don’t believe you should owe an IRMAA, you can appeal the decision on an SSA-44 form. Let’s take a closer look at how this process works.

When can I appeal?

You can appeal an IRMAA decision within 60 days of receiving an IRMAA determination notice in the mail using the SSA-44 form. Outside of this time frame, the SSA will evaluate whether you have good cause for a late appeal.

In what situations can I appeal?

There are two situations when you can appeal an IRMAA.

The first situation involves the tax information used to determine the IRMAA. Some examples include:

  • The data used by the SSA to determine the IRMAA is incorrect.
  • The SSA used older or out-of-date data to determine the IRMAA.
  • You filed an amended tax return during the year the SSA is using to determine the IRMAA.

The second situation involves life changing events that significantly impact your income. There are seven qualifying events:

  • marriage
  • divorce or marriage annulment
  • death of a spouse
  • reduction in work
  • cessation of work
  • loss or reduction of specific types of pensions
  • loss of income from an income-generating property

This is likely to be the case when someone retires and their income goes down significantly.  This can also happen if two years before you file for Medicare you sold an asset, such as a business interest or commercial property which obviously affects your tax return.

What documentation will I need to provide?

The documents you need to provide as a part of your appeal, in addition to the SSA-44 form, depend on your situation. They might include:

  • federal income tax returns
  • marriage certificate
  • decree of divorce or marriage annulment
  • death certificate
  • copies of pay stubs
  • signed statement from your employer indicating reduction or stoppage of work
  • letter or statement indicating a loss or reduction of a pension
  • statement from an insurance adjuster indicating loss of an income-generating property

How do I submit an appeal?

An appeal may not be necessary. The SSA will sometimes perform a new initial determination using updated documentation. If you’re not eligible for a new initial determination, you can appeal the IRMAA decision.

You can contact the SSA to begin the appeals process. Your initial determination notice should also have information for how to do this. If the SSA reviews and approves your appeal, your monthly premiums will be corrected. If your appeal is denied, the SSA can provide you with instructions on how to appeal the denial in a hearing.

Go to the SSA website or contact your local Social Security Administration office with questions. As always, this is not intended to be tax advice. Please consult your CPA for your specific situation.

The views or opinions in this article are those of the author and do not necessarily represent the views of Washington Trust Bank or senior management. Washington Trust Bank believes that the information used in this blog was obtained from reliable sources, but we do not guarantee its accuracy. Neither the information nor any opinions expressed constitutes a solicitation for business or a recommendation of the purchase or sale of securities or commodities.

About The Author

As Vice President and Senior Wealth Advisor, Greg provides financial analysis to high net worth individuals. He is the author of several articles for various publications and nonprofit organizations on estate and financial planning subjects.