IRMAA Explained (Income-Based Costs)
How income affects your Medicare Part B and Part D costs
Written by Walter Johnson, Licensed Insurance Agent
This article is for educational purposes only and is not a solicitation for insurance
OFFICIAL 2026 EDUCATIONAL RESOURCE BY WALTER JOHNSON, LICENSED INSURANCE AGENT (CA #0J15814).
How income affects your Medicare Part B and Part D costs
Written by Walter Johnson, Licensed Insurance Agent
This article is for educational purposes only and is not a solicitation for insurance
Learn what IRMAA is, how income affects Medicare premiums, and how the Income-Related Monthly Adjustment Amount impacts Part B and Part D costs.
What Is IRMAA?
IRMAA (Income-Related Monthly Adjustment Amount) is an additional cost added to your Medicare premiums if your income is above certain thresholds.
It affects:
Medicare Part B (medical insurance)
Medicare Part D (prescription drug coverage)
IRMAA is designed so that higher-income individuals pay more for Medicare coverage.
👉 Start here: Medicare Costs
How IRMAA Works
IRMAA increases your monthly premium based on your income level.
Key points:
It is added on top of your standard premium
It applies only if your income exceeds certain limits
It is recalculated each year
This means your Medicare costs can change depending on your financial situation.
How Medicare Determines Your Income
IRMAA is based on your Modified Adjusted Gross Income (MAGI) from two years prior.
For example:
Your 2026 Medicare premiums are based on your 2024 income
This information is typically provided by the IRS to Medicare.
Which Parts of Medicare Are Affected?
IRMAA applies to:
Medicare Part B
Increases your monthly premium
Paid in addition to the standard Part B premium
👉 Learn more: Medicare Part B Premium Explained
Medicare Part D
Adds an extra charge to your drug plan premium
Paid separately from your plan’s premium
👉 Learn more: Does Medicare Cover Prescription Drugs
Who Pays IRMAA?
Most people do not pay IRMAA.
It typically applies to:
Individuals with higher income levels
Married couples filing jointly with higher combined income
If your income is below the threshold, you will pay the standard Medicare premiums.
Can IRMAA Change?
Yes, IRMAA can change based on your income.
Changes may occur due to:
Retirement
Loss of income
Life events such as divorce or death of a spouse
If your income decreases, you may be able to request a reduction.
How to Appeal IRMAA
If your income has changed significantly, you can request a reconsideration.
This may apply if you experience:
Retirement
Work reduction
Loss of income-producing property
Other qualifying life events
Appealing IRMAA may lower your Medicare premiums.
Why IRMAA Matters
IRMAA can significantly increase your Medicare costs if your income is above certain levels.
Understanding how it works helps you:
plan your retirement income
anticipate healthcare costs
avoid surprises in your Medicare premiums
Next Step
Now that you understand how income affects Medicare costs, the next step is learning how Medicare works if you are still working.
👉 Continue to: Medicare and Working
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