If you’ve ever opened your Medicare bill and thought, “Wait a minute… Why am I paying more than my neighbor?” — you’ve likely met IRMAA.
IRMAA stands for Income-Related Monthly Adjustment Amount,which is just government-speak for “Hey, you earned more money, so we’re going to tack on a surcharge to your Medicare premiums.”
Let’s break it down in plain English, look ahead to 2026 changes, and show you how to fight back if life throws you a curveball (like retirement, layoffs, or big income drops).
What Is IRMAA, Really?
Think of IRMAA as a Medicare penalty for higher income earners. It applies to:
- Part B (doctor visits, outpatient care)
- Part D (prescription drug coverage)
The catch? It’s based on your tax return from two years ago. So, in 2026, Social Security will peek back at your 2024 income to decide whether you pay extra.
Standard Part B premium (2025): about $185/month. With IRMAA? It could jump to $250… $400… even over $500/month depending on your income. And that’s per person, not per couple.
Who Actually Gets Hit With IRMAA?
Good news: it’s not most people. Only about 7% of Medicare beneficiaries pay the Part B surcharge, and about 8% pay the Part D add-on.
Bad news: if you’ve had a good career, maybe a pension, maybe some solid retirement savings, you’re more likely to land in the IRMAA club. And once you’re in… it’s sticky unless you take action.
2026 Outlook: What’s Changing?
Here’s what we know (and what to expect):
- Premiums Rising: Part B premiums are projected to jump again in 2026 — up to about $206.50/month (+11.6%). Since IRMAA is a multiplier on that base premium, the surcharges rise too.
- Brackets Adjusted: The first four IRMAA brackets creep upward each year with inflation. But the highest bracket is frozen until 2028, meaning more folks risk drifting upward.
- Part D Costs: Deductibles and premiums are also trending higher, with the catastrophic limit rising to around $2,100 in 2026.
Translation: even if you don’t hit IRMAA today, the combo of inflation, rising premiums, and frozen brackets could drag more retirees into paying extra in the coming years.
The Lifeline: Appealing IRMAA After Retirement or Job Loss
Here’s the part most people don’t know — you don’t have to just “accept” IRMAA if your income dropped.
Social Security allows you to appeal if you’ve had a life-changing event, including:
- Retiring (aka “work stoppage”)
- Losing your job
- A big reduction in work hours
- Divorce, marriage, or death of a spouse
- Losing a pension
The tool you need: Form SSA-44.
You simply tell Social Security, “Hey, I’m not making what I made two years ago — use my current income instead.” Back it up with proof (termination letter, retirement papers, etc.), and they can reduce your IRMAA immediately.
Without this, you’d pay the higher premium for up to 2 years until IRS data catches up. That’s thousands of dollars you could save.
Medicare vs Employer Coverage: Which Costs Less?
Here’s the tricky part. For some folks still working at 65+:
- Large employer (20+ employees): Your employer plan might actually be cheaper, because the company subsidizes a big chunk of your premium.
- Small employer (<20 employees): Medicare usually becomes primary, and skipping Part B could leave you with unpaid bills.
So, is it sometimes cheaper to stay on your employer plan? Yes — especially if your income puts you in higher IRMAA brackets. But it’s case by case. The smart move: compare both side by side before making the leap.
How to Keep IRMAA From Sneaking Up on You
- Plan your income: Be strategic with Roth conversions, investment sales, and RMDs.
- File an appeal (SSA-44): If your income dropped, don’t wait.
- Check your brackets every fall: Medicare updates premiums and thresholds every year.
- Work with a guide: This stuff is complicated — and costly if you guess wrong.
Bottom Line
IRMAA isn’t a penalty for being successful — but it sure feels like one. The truth is, with a little planning (and knowing when to appeal), you can keep thousands in your pocket.
If you’re unsure whether IRMAA applies to you, or if staying on your employer plan makes more sense, let’s run the numbers together.
Call me, Paul Barrett, at 631-358-5793, or visit www.paulbinsurance.com
