What is Medicare’s IRMAA?

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The Income Related Monthly Adjustment Amount, better known as IRMAA, is a surcharge that is added to the current year’s Medicare Part B (hospital coverage) and Part D (prescription drug coverage) premiums for those who have earned “too much” income in a given year.

The income that used to determine Medicare’s IRMAA is defined by the Centers for Medicare Services (CMS) as ““adjusted gross income plus any tax-exempt interest” or everything on lines 2a and 8b of the IRS form 1040.

Some examples of income are: Wages, Social Security Benefits, Capital Gains, Dividends, Pension and Rental Income and distributions from tax-deferred investments like a Traditional 401(k) or IRA.

IRMAA is broken into 6 different income brackets which each bracket having its own income levels and surcharges for the current year.

The IRMAA brackets in 2021 are:

< $88k< $176k$148.50Premium (varies)
$88k – $111k $176k – $222k$207.90Premium + $12.30
$111k – $138k$222k – $276k$297.00Premium + $31.80
$138k – $165k $276k – $330k$386.10Premium + $51.20
$165k – $500k$330k – $750k$475.20Premium + $70.70
>$500k>$750k$504.90Premium + $77.10
2021 IRMAA Brackets

According to federal legislation Medicare’s IRMAA brackets are not slated to be changed until at least 2028, but have been increased slight in the past.

The first 4 brackets have been risen by just over 2.00% in 2020 and 2021 while the 5th and largest surcharge bracket has not

The Medicare Board of Trustees in its 2019 Annual Report is projecting that through 2028 the IRMAA brackets themselves will remain constant while the surcharges will increase at close to a 6.21% rate of inflation annually.

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