IRMAA is an acronym for Income-Related Monthly Adjustment Amounts which can impact Medicare Part D (prescription drug benefit) premiums and Medicare Part B (medical insurance) premiums.
The IRMAA could apply to your Part B and Part D premiums if your annual income exceeds a certain amount and the government will review your taxable income every couple of years to determine if it should be adjusted.
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To be clear, IRMAA represents the amount of money you may have to pay for Medicare Part B and Part D (if purchased). It stands for Income Related Monthly Adjustment Amount. Typically, IRMAA only impacts individuals with high incomes.
First, the Basics for Medicare Part B, Part C, and Part D
Medicare Part B is part of Original Medicare works like typical medical insurance (for doctor visits and other services) and Part A is hospital insurance. You can check your red, white, and blue Medicare card to confirm that you have Medicare Part A and Part B.
Medicare Part D is a stand-alone optional Medicare prescription drug plan and provides coverage for prescription drugs that are self-administered (retail purchases). Part D is available through private insurance companies approved by Medicare.
Medicare Part C typically called Medicare Advantage is healthcare coverage sold and administered by private insurance companies approved by CMS (Center for Medicare and Medicaid Services). Part C replaces original Medicare Part A and B but enrollees must still pay the Medicare Part B premium.
Many Medicare Advantage plans include prescription drug coverage and if select one of these plans, the IRMAA rule will apply to the Medicare Advantage plan prescription drug coverage.
What is the IRMAA Part D for 2022?
For Medicare Part D in 2022, the IRMAA amounts (surcharge) will be added to the normal premium for the individual’s Part D plan.
Moreover, if an individual has a Medicare Advantage plan (Medicare Part C) that includes prescription drug coverage (many do) the IRMAA surcharge will be added to the prescription drug premium included in that plan.
Remember, the government uses your taxable income for the prior 2 years. Here is a table showing the IRMAA surcharges for a Part D plan in 2022:
|$91,000 or less||$182,000 or less||$0.00|
|> $91k – $114k||> $182k – $228k||$12.40|
|> $114k – $142k||> $228k – $284k||$32.10|
|> $142k – $170k||> $284k – $340k||$51.70|
|> $170k – $500k||> $340k – $750k||$71.30|
|> $500k||> $750k||$77.90|
What is the IRMAA for Medicare Part B in 2022?
The Part B premium you pay will also depend on your taxable income from 2 prior years. This means that your 2022 Medicare Part B premium will be calculated from your 2020 tax return.
Here is a table showing the IRMAA premiums you’ll pay in 2022:
|$91,000 or less||$182,000 or less||$170.10|
|> $91k – $114k||> $182k – $228k||$238.10|
|> $114k – $142k||> $228k – $284k||$340.20|
|> $142k – $170k||> $284k – $340k||$442.30|
|> $170k – $500k||> $340k – $750k||$544.30|
|> $500k||> $750k||$578.30|
Can I Appeal the IRMAA?
Yes, you can appeal your IRMAA determination if you believe there is an error in the calculations by filing for a redetermination through the Social Security Administration. You can write to SSA or call them at 800-772-1213.
Listed below are the conditions that may qualify you for a new Part B determination or Part D surcharge:
|The tax return used was out of date or inaccurate.||> You filed an amended return for the year that was used in making your IRMAA determination|
> You found an error in the data provided by the IRS
> The IRS provided older data and you want SSA to use newer data
> You experienced a major life event that has dramatically impacted your income
|Life events that impacted your modified adjusted gross income||The 7 life events that qualify for a redetermination are:|
1. Death of your spouse
4. Reduced work hours
5. Layoff or termination
6. Loss of income from income-producing property
7. Reduced or loss of pension income
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According to HHS.gov, “Events that result in the loss of dividend income or affect a beneficiary’s expenses, but do not affect the beneficiary’s modified adjusted gross income are not considered qualifying life-changing events.”
Is Part D IRMAA Separate from Part D Late Enrollment Penalties?
IRMAA Part D and IRMAA Part B surcharges are different from a late enrollment penalty. Both can be added to your monthly premiums and it’s completely possible that high-income individuals who are late enrollees in Part B or Part D will have to pay both the IRMAA surcharge and the late enrollment penalty. Here are the differences:
|IRMAA Surcharges||Late Enrollment Penalties|
|> Are based on your income from the previous 2 years and regularly reviewed|
> Are only implemented if your income is more than a certain amount
|Are charged if an individual fails to enroll in Medicare Part B or Part D when first eligible. The penalty is based on how long you were without Part B or Part D coverage when finally decide to enroll.|
How Will I Know about the Penalty and How do I Pay It?
The Social Security Administration will notify you of an IRMAA surcharge for Part B and/or Part D. You will receive an Initial IRMAA Determination in the mail that will explain how much your surcharge amounts to and your right to appeal SSA’s determination.
If you receive an IRMAA notification and believe that there is an error in the determination, you should file your appeal to Social Security using the “Medicare Income-Related Monthly Adjustment Amount Life-Changing Event” form (SSA-44).
If you are charged an IRMAA surcharge, the amount will typically be taken out of your monthly Social Security or your Railroad Retirement Board benefit.
Please note that an IRMAA can change annually and you are required to pay it to maintain your Medicare Part B and/or Part D benefits. If you don’t pay it, you will likely lose your Medicare Part A and /or Part D benefits.
Will my Medicare Supplement Plan be Impacted by IRMAA Part B or IRMAA Part D?
If you are enrolled in a Medicare Supplement (Medigap) plan, an IRMAA surcharge will not affect your Medicare Supplement premium since the plan is designed to supplement your Medicare benefits, not replace them.
However, if you are enrolled in Medicare Part C (Medicare Advantage) the IRMAA surcharge will likely have an impact on your prescription drug benefit cost. Since you must continue paying your Medicare Part B premium, the IRMAA will impact that as well.
Frequently Asked Questions
IRMAA is an acronym for Income-Related Monthly Adjustment Amounts which can impact Medicare Part D (prescription drug benefit) premiums.
Once your income exceeds $91k for individuals or $182k for joint filers, the IRMAA surcharge will be activated.
Yes, you can appeal your IRMAA surcharge by filing form SSA-44 and if you qualify under one or more of the 7 eligibilities.
Yes, if your amended tax return indicates that you had a lower income for the year used to determine the IRMAA surcharge, you should contact the SSA or file an appeal form.
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