OFFICIAL 2026 EDUCATIONAL RESOURCE BY WALTER JOHNSON, LICENSED INSURANCE AGENT (CA #0J15814).
Understanding income-based costs, IRMAA, and what affects your Medicare premiums
Written by Walter Johnson, Licensed Insurance Agent
This article is for educational purposes only and is not a solicitation for insurance
Why is your Medicare premium so high? Learn how IRMAA works, what income affects your costs, and how to potentially lower your Medicare premiums.
Why Is My Medicare Premium So High?
If your Medicare premium seems higher than expected, it’s usually due to your income.
Medicare uses something called Income-Related Monthly Adjustment Amount (IRMAA) to determine if you should pay more for:
Medicare Part B
Medicare Part D
If your income is above certain thresholds, your monthly premium increases.
👉 Start here: Medicare Costs
What Is IRMAA?
IRMAA is an additional charge added to your Medicare premiums based on your income.
It applies to:
Part B (medical insurance)
Part D (prescription drug coverage)
The Social Security Administration determines your IRMAA using your tax return from two years ago.
👉 Learn more: IRMAA Explained (Income-Based Costs)
What Income Triggers Higher Medicare Premiums?
If your income exceeds certain limits, you’ll pay more for Medicare.
Common triggers include:
Higher retirement income
Selling investments or property
Large withdrawals from retirement accounts
One-time financial events
Even a temporary increase in income can raise your Medicare premiums.
How Much Higher Can Your Premium Be?
Your premium can increase significantly depending on your income level.
Instead of paying the standard Part B premium, you may pay:
A higher monthly premium
Additional charges for Part D
👉 Learn more: Medicare Part B Premium Explained
Why Your Income From Two Years Ago Matters
Medicare does not use your current income.
Instead, it uses your Modified Adjusted Gross Income (MAGI) from two years prior.
For example:
Your 2026 premiums are based on your 2024 tax return
This can be confusing if your income has recently decreased.
Can You Lower Your Medicare Premium?
In some cases, yes.
You may be able to request a reduction if you’ve experienced a life-changing event, such as:
Retirement
Loss of income
Divorce
Death of a spouse
These events may allow you to file an appeal and lower your premium.
Other Reasons Your Medicare Costs May Be Higher
In addition to IRMAA, your costs may be higher due to:
Choosing a Medicare Advantage plan with additional benefits
Higher prescription drug costs
Out-of-pocket expenses like deductibles and coinsurance
👉 Learn more: Medicare Out-of-Pocket Costs
How to Plan for Medicare Costs
To avoid surprises, it helps to:
Estimate your future income
Understand how IRMAA thresholds work
Plan withdrawals from retirement accounts carefully
Review your coverage options annually
Good planning can help you manage your healthcare costs more effectively.
Why This Matters
Many people are surprised when their Medicare premiums increase.
Understanding why your premium is higher helps you:
Avoid unexpected costs
Plan your retirement income
Make informed financial decisions
Next Step
Now that you understand why your Medicare premium may be higher, the next step is reviewing your total monthly costs.
👉 Continue to: How Much Does Medicare Cost Per Month
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