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Medicare plays a critical role in providing healthcare coverage to millions of Americans.
For higher-income beneficiaries, there’s an additional surcharge called the Income-Related Monthly Adjustment Amount (IRMAA). This surcharge aims to maintain the financial stability and fairness of the Medicare system. It also helps ensure that those with higher incomes contribute proportionally.
It’s essential to stay informed about updates to IRMAA for those affected by it. Understanding these changes helps beneficiaries make informed decisions about their Medicare premiums and plan their healthcare expenses.
In this comprehensive guide, we will explore the key concepts of IRMAA, its eligibility criteria, how it affects Medicare premiums, and important changes and updates to it in 2024.
IRMAA Basics: Key Concepts and Eligibility
IRMAA is a surcharge applied to Medicare Part B (Medical Insurance) and Part D (Prescription Drug) premiums. The purpose behind IRMAA is to make sure higher-income individuals contribute a fair share for their Medicare coverage.
IRMAA primarily affects Medicare beneficiaries whose modified adjusted gross income (MAGI) exceeds certain thresholds.
The following charts outline IRMAA premium brackets based on income levels and tax filing statuses for Medicare Part B and Part D. Consult them to assess whether your income falls within the range that triggers an IRMAA surcharge.
2024 Medicare Part B IRMAA
| Individual tax return (2022 income) | Joint tax return (2022 income) | Married & separate tax return (2022 income) | Monthly Medicare Part B premium |
| Less than or equal to $103,000. | Less than or equal to $206,000. | Less than or equal to $103,000. | $174.70. |
| Greater than $103,000 and less than or equal to $129,000. | Greater than $206,000 and less than or equal to $258,000. | Not applicable. | $244.60. |
| Greater than $129,000 and less than or equal to $161,000. | Greater than $258,000 and less than or equal to $322,000. | Not applicable. | $349.40. |
| Greater than $161,000 and less than or equal to $193,000. | Greater than $322,000 and less than or equal to $386,000. | Not applicable. | $454.20. |
| Greater than $193,000 and less than $500,000. | Greater than $386,000 and less than $750,000. | Greater than $97,000 and less than $397,000. | $559.00. |
| Greater than or equal to $500,000. | Greater than or equal to $750,000. | Greater than or equal to $397,000. | $594.00. |
2024 Medicare Part D IRMAA
| Individual tax return (2022 income) | Married filing jointly (2022 income) | Married filing separately (2022 income) | Monthly Part D cost (in 2024) |
| $103,000 or less. | $206,000 or less. | $103,000 or less. | Your plan premium. |
| Above $103,000 up to $129,000. | Above $206,000 up to $258,000. | Not applicable. | $12.90 plus your plan premium. |
| Above $129,000 up to $161,000. | Above $258,000 up to $322,000. | Not applicable. | $33.30 plus your plan premium. |
| Above $161,000 up to $193,000. | Above $322,000 up to $386,000. | Not applicable. | $53.80 plus your plan premium. |
| Above $193,000 and less than $500,000. | Above $386,000 and less than $750,000. | Greater than $97,000 and less than $397,000. | $74.20 plus your plan premium. |
| $500,000 or above. | $750,000 or above. | Greater than or equal to $397,000. | $81.00 plus your plan premium. |
Calculating IRMAA: Income Determination and Reporting
Medicare looks at your income for two years before the current year to calculate IRMAA. It considers various sources of income, including adjusted gross income (AGI), modified adjusted gross income (MAGI), tax-exempt interest income, and certain foreign income.
Understanding the concepts of AGI and MAGI is important as they play a key role in determining your IRMAA status.
AGI represents your total income minus certain deductions, while MAGI includes additional income and deductions. To calculate MAGI, refer to the IRS instructions specific to your tax-filing status.
It’s worth noting that you’re required to report any changes in income to the Social Security Administration (SSA). The authorities may consider knowingly withholding or providing false information as fraud, which can invite serious consequences. Penalties include fines, imprisonment, or both.
You can ensure an accurate determination of your IRMAA status by understanding income reporting requirements and complying strictly with them.
IRMAA and Medicare Part B
Medicare Part B covers medical services such as doctor visits, outpatient care, and preventive services. The standard Part B premium for most people in 2024 is $174.70 per month. However, if your income exceeds certain thresholds, you will be subject to an IRMAA surcharge on top of the standard premium.
The IRMAA tiers for Medicare Part B determine the amount of the surcharge based on income levels and tax filing statuses. The higher your income, the higher the surcharge. Review the 2024 IRMAA brackets in the table above to determine how your income affects your Part B premium.
IRMAA and Medicare Part D
Medicare Part D provides prescription drug coverage. If you have a standalone Part D plan or a Medicare Advantage plan with prescription drug coverage, you may be subject to an IRMAA surcharge on top of your plan premiums.
The Part D income-related adjustment applies to individuals whose income exceeds specified thresholds. You can easily assess how IRMAA affects your Part D premiums by reviewing the 2024 IRMAA Part D brackets in the table above.
At CoverRight, we understand the complexities of IRMAA and its impact on your Medicare coverage. That’s why our team of experts is always on call to help you navigate the myriad intricacies of Medicare.
Contact us today for personalized guidance and support in understanding your eligibility, calculating your IRMAA, and managing any potential premium adjustments.
Frequently Asked Questions (FAQs)
What if my income changes through the year?
IRMAA is based on the income reported on your tax return from two years prior. If your income changes during the current year due to life-changing events such as marriage, divorce, or the death of a spouse, you can contact the SSA to provide updated information and request a new determination.
How can I appeal an IRMAA determination?
To appeal an incorrect IRMAA determination, follow the instructions provided in the SSA notice. Act promptly and submit the required form or written request for reconsideration. Gather supporting documents such as tax returns to demonstrate discrepancies in reported income.
Once you appeal, the SSA will review your case. The process may take time, and the original IRMAA premium may remain in effect for its duration. If the SSA finds an error, it will adjust your IRMAA and provide an updated notice. If the original determination is upheld, you can request a hearing or pursue additional appeals through Medicare and the federal court system.
Seek assistance from Medicare advocacy organizations, insurance brokers, or legal professionals specializing in Medicare law for guidance through the complex appeals process.
How does IRMAA affect Medicare Advantage (Part C) plans?
Private insurance companies approved by Medicare provide Medicare Advantage plans (Part C). While IRMAA does not directly affect Part C plan premiums, you must continue paying your Part B premium which may include an IRMAA surcharge if your income exceeds the thresholds.
