Have you met IRMAA? She's rather quiet and sometimes sneaks up on you. Don't be caught unaware!
Many Medicare recipients don’t realize how even one dollar of extra income can affect their premiums. IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge that some Medicare beneficiaries may have to pay in addition to their regular Medicare premiums. The surcharge is based on a person's modified adjusted gross income (MAGI) and is intended to help fund Medicare Part B and Part D programs.
Who Pays IRMAA: Medicare beneficiaries with higher incomes may be subject to IRMAA. The income thresholds vary depending on your filing status (individual or joint return). If your MAGI exceed the thresholds in the image above, you'll likely be subject to higher Medicare premiums.
IRMAA Calculation: The IRMAA surcharge is calculated based on your MAGI from two years ago. For example, your 2023 IRMAA is based on your 2021 income tax return. The surcharge is added to your regular Medicare Part B and Part D premiums.
IRMAA Tiers: The exact amounts can change annually, so it's essential to check the Medicare website or contact the Social Security Administration for the most up-to-date information.
How to Get a Refund: If your income has significantly decreased since the two-year lookback period used for calculation, you can request a refund or reconsideration. There are seven approved reasons for IRMAA refunds: death of a spouse; marriage; divorce; work reduction; work stoppage; loss of income from income producing property; and loss or reduction of certain pension income. To request a refund, you must file an appeal with the Social Security Administration (SSA). You will need to provide evidence of your reduced income, such as tax returns or other financial documents. The SSA will review your appeal and adjust your IRMAA surcharge if your income qualifies for a lower rate.
Read more here and contact your advisor today to further the conversation!
Harvest Point Wealth Management and LPL Financial are not endorsed by or affiliated with the U.S. Centers for Medicare and Medicaid Services or any government agency.