Medicare is not a flat-rate program for everyone. Higher-income enrollees pay more for Part B and Part D coverage through a surcharge called IRMAA, the Income-Related Monthly Adjustment Amount. The surcharge surprises many people, particularly those who recently retired after high-earning years. Understanding how IRMAA works, when it applies, and how to appeal it if your income has dropped significantly can save you real money.
IRMAA catches people off guard because they retired two years before turning 65 but their tax return from two years ago reflects peak earning years. They are shocked when their Medicare bill is double what they expected. The appeal process for retirement income changes is real and it works, but you have to file it. If you retired in the last two years, bring that up when we talk.
What IRMAA is and how it works
IRMAA is a monthly surcharge added to your Part B premium and Part D premium if your income exceeds certain thresholds. It is determined by the Social Security Administration based on your Modified Adjusted Gross Income (MAGI) from two years prior. In 2025, that means your 2023 tax return determines whether you pay IRMAA. The SSA reviews your income annually and sends a notice if you owe IRMAA for the coming year.
2025 IRMAA brackets for Part B
For single filers: income up to $106,000 pays the standard $185 per month. Income from $106,001 to $133,000 adds $74 (total $259). Income from $133,001 to $167,000 adds $185 (total $370). Income from $167,001 to $200,000 adds $296 (total $481). Income from $200,001 to $500,000 adds $407 (total $592). Above $500,000 adds $444 (total $629). For married filing jointly, thresholds are approximately doubled. Married filing separately follows different, much stricter brackets.
IRMAA for Part D
IRMAA also applies to Part D drug plan premiums, though the amounts are smaller. In 2025, Part D IRMAA ranges from $13.30 to $81.00 per month depending on income bracket. This amount is added to whatever your specific Part D plan premium is, and it is paid directly to Medicare rather than to your plan.
Why two-year-old income matters
Using two-year-old income can work against you in both directions. If you had a high-income year in 2023 but retired in 2024, you may owe IRMAA in 2025 even though your current income is much lower. Conversely, if your income has recently increased, you have a two-year buffer before IRMAA catches up. The two-year lag is built into the system because prior-year tax returns are the most current verified income data available when premiums are set.
Have questions about your Medicare costs given your income situation?
IRMAA, plan premiums, and total Medicare costs depend on your specific income and the plans available in your area. A quick call can give you a clear picture.
Book a Free CallLife-changing events that qualify for appeal
If your income dropped significantly since the tax year being used, you can appeal IRMAA using CMS Form SSA-44. Qualifying life-changing events include retirement or reduction in work hours, marriage, divorce or legal separation, death of a spouse, loss of income-producing property, reduction or loss of pension income, or receipt of a settlement from an employer due to a lawsuit. File the appeal as soon as possible after the event occurs.
How to appeal: the practical process
To appeal, submit Form SSA-44 to your local Social Security office along with documentation of the life-changing event and evidence of your more recent income (pay stub, retirement letter, or tax return for the most recent year available). SSA will review and use the more current income if it results in lower IRMAA. If your appeal is approved, the adjustment typically takes effect within 60 days.
Frequently asked questions