IRMAA Explained: Income Categories, Charges, and Computations
In 2025, the Income-Related Monthly Adjustment Amounts (IRMAAs) for Medicare Part B and Part D premiums will be calculated based on a person's modified adjusted gross income (MAGI) from two years prior. This means that your Medicare premiums for Part B and D can increase substantially based on your income reported two years earlier.
### Calculating MAGI for IRMAAs
To calculate MAGI for IRMAAs, start with your Adjusted Gross Income (AGI), which is line 11 on your IRS Form 1040. Add any tax-exempt interest income reported on line 2a of Form 1040. The resulting MAGI determines which IRMAA income bracket you fall into, which then sets the amount of the surcharge added to your Part B and Part D premiums.
\[ \text{MAGI for IRMAA} = \text{AGI (line 11)} + \text{Tax-exempt interest (line 2a)} \]
### IRMAA Surcharge Details
Standard Part B premiums cover roughly 25% of the total cost, with the government covering the rest. If your income exceeds certain thresholds, you pay a higher percentage, ranging from 35% to 85% of the Part B premium cost, based on the income bracket.
For 2025, IRMAA surcharges for Part B ranged approximately from $185.00 to $443.90 monthly on top of the base premium of $185.00. A similar surcharge is applied to Part D premiums, increasing costs proportional to income.
### Income Thresholds
For 2025, if your MAGI exceeds $106,000 (single filer) or $212,000 (married filing jointly), you will pay IRMAA surcharges.
### Premium Impact
The surcharge added to both Medicare Part B and Part D premiums can significantly impact your overall costs.
### Summary
Here's a summary of the key points:
| Step | Details | |----------------------------|-----------------------------------------------------------| | Income used | MAGI from 2 years earlier tax return (AGI + tax-exempt interest) | | Income thresholds | For 2025, IRMAA applies if MAGI > $106k (single) or $212k (joint) | | Premium impact | Surcharge added to both Medicare Part B and D premiums | | Surcharge range (2025) | $185 to $443.90 monthly on Part B, plus a Part D premium increase |
### Additional Information
Individuals who are eligible for Supplemental Security Income (SSI) or Extra Help are exempt from getting an IRMAA notice. Extra Help is a program to help pay some of the out-of-pocket costs of Medicare Part D premiums, and it is available to people who have Medicare Part A, Part B, or both, live in the United States, have income and assets below specified limits.
Individuals can appeal the IRMAA adjustment if they believe the premium is incorrect due to errors in the tax return or major life-changing events that reduced reported income. The Office of Medicare Hearing and Appeals handles all appeals for Medicare Part B premiums.
The Social Security Administration (SSA) is the agency that decides whether a person must pay more than the standard premium, using information from the Internal Revenue Service (IRS). The Centers for Medicare & Medicaid Services (CMS) calculates IRMAAs and publishes the amounts yearly in the Federal Register.
IRMAA notices contain detailed information about the calculations, including the use of MAGI and tax filing status. Medicare is a federal insurance plan for people aged 65 years and over, as well as those with disabilities, ALS, or ESRD.
Health insurance (IRMAAs) for Medicare Part B and Part D premiums are calculated based on a person's modified adjusted gross income (MAGI) from two years prior, which is determined by adding Adjusted Gross Income (AGI) and tax-exempt interest to the MAGI. Various therapies and treatments, along with health-and-wellness measures, could potentially be affected if the IRMAA surcharges significantly impact a person's overall health insurance costs.
