It's called IRMAA. It's calculated from a tax return you filed two years ago, it arrives by mail in late fall, and it surprises the people who just stopped working more than anyone else. If that's you, there is a form that can undo it — and almost nobody is told about it.
Sometime around Thanksgiving, a plain envelope from the Social Security Administration turns up in mailboxes in Madison, Guilford and Old Saybrook with a number inside that nobody was expecting. It says that starting in January, this household will pay more for Medicare than the neighbors do — sometimes a good deal more. The letter calls it an income-related monthly adjustment amount. Everyone else calls it IRMAA, and the people it catches hardest are the ones who have just retired.
Most people pay a standard monthly premium for Medicare Part B, which covers doctors and outpatient care, plus whatever their drug plan charges for Part D. IRMAA is a surcharge stacked on top of both, and it applies only to households above an income threshold that Medicare resets each year.
Two details catch people out. The first is that it hits both parts — Part B and Part D — as two separate add-ons. The second is that the Part D piece doesn't go to your drug plan at all. You keep paying the plan its own premium, and the surcharge is collected separately by Medicare, usually straight out of your Social Security deposit.
That second point leads to the correction I make most often, so it's worth saying plainly: IRMAA follows the person, not the plan. Moving from a Medicare Advantage plan back to Original Medicare, picking up a Medicare Supplement, switching drug plans during Annual Enrollment — none of it touches your IRMAA by a dollar. The surcharge is keyed to your income, not your coverage.
Here is the part that feels unfair, because it rather is. Medicare doesn't look at what you earn now. It looks at your modified adjusted gross income — your adjusted gross income plus any tax-exempt interest, which is what Medicare means by MAGI — from the federal tax return you filed two years ago.
So next year's premiums are set by the year before last. If you have been retired a decade and live on a steady income, that's a technicality and nothing more. If you worked your last full year, cashed out unused vacation, took a final bonus, or sold the business, it means Medicare is pricing you on the best income year of your life in the first year you no longer have it.
That is the usual IRMAA story on this stretch of coast. An engineer who retired from the boat in Groton. A teacher who finished out the school year in June. Someone who sold a storefront in Mystic after thirty years behind the counter. The income is gone. The surcharge shows up anyway, two years later, right on schedule.
IRMAA has five tiers above the standard premium, and they do not phase in gently. Cross a threshold by a single dollar and you pay that entire tier for the whole year. There is no proration and no partial step — you are either under the line or over it.
That matters enormously for anyone whose income lands near a boundary. A Roth conversion, a required minimum distribution taken in December, a capital gain from selling a rental cottage — any one of them can lift a household over a line it was sitting comfortably under, and the bill arrives two years later as twelve months of higher premiums. For a married couple both on Medicare, it lands twice, because the surcharge is charged per person.
I've deliberately left the numbers out of this piece. Medicare resets the income thresholds and the surcharge amounts every year, and a given year's brackets aren't published until the preceding fall — so any figure printed here would be stale by the time most people read it. The current table lives on Medicare.gov's costs page, and your own letter states your amount exactly. If you'd rather not read a table, bring the letter and we'll find your line on it together.
Now the useful part. If your income fell because of a specific life event, you are not stuck with a surcharge calculated on the old number. Social Security will redo the determination using what you actually expect to earn this year — but only if you ask, on the right form, with evidence attached.
The form is SSA-44, titled "Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event." Eight events qualify:
You file the form with a good-faith estimate of the income year you're actually in, attach proof — a letter from the employer, a retirement date, a death certificate, a signed statement — and Social Security recalculates. There is no fee for this, and no reason to pay anyone to do it on your behalf.
This is where being honest is worth more than being encouraging, so here it is: a one-time spike in income is not a life-changing event, however one-time it was.
Selling a house. A large Roth conversion. Cashing in an investment. An inheritance. A big capital gain. Every one of these can raise your MAGI enough to trigger IRMAA two years later, and not one of them appears on the SSA-44 list. People get told otherwise across a dinner table every fall, file the form in good faith, and are turned down.
There is one other route, and it's a different thing entirely. If Social Security worked from the wrong information — an amended return, an IRS error, or figures from the wrong year — you can ask them to correct it and show the accurate return. That's a dispute about the facts rather than a life-changing event, and it's handled as a reconsideration.
If neither applies to you, the honest answer is that this is a one-year problem rather than a permanent one. Which brings us to the part that actually settles most people down.
IRMAA is not a status you acquire and keep. It is recalculated annually against whatever tax return is then two years old. The retiree whose final working year triggered a surcharge usually watches it fall away on its own once the lookback catches up with their real retirement income. One expensive year, not a life sentence — and worth knowing before anyone makes a panicked decision about their coverage to try to escape a surcharge that coverage has nothing to do with.
Bring it. Working out whether you have a case takes about fifteen minutes with the letter in front of us, and it costs nothing either way. Book a free 30-minute call, or ring (203) 350·2026 and read me the first line of it.
No. The surcharge is keyed to your income, not your coverage. Moving between Medicare Advantage and Original Medicare, adding a Supplement, or changing drug plans leaves it exactly where it was. Switch plans because a plan stopped fitting — which is what the fall checklist is for — not to chase a surcharge you can't outrun that way.
Yes, if both are on Medicare. The thresholds are measured against the household's MAGI on a joint return, but the surcharge is billed to each enrolled person separately. Crossing a line means two surcharges, which is why a couple sitting near a threshold should think carefully before realizing extra income in December.
Generally no. A one-time gain on a property sale isn't among the eight life-changing events, even though it can easily trigger the surcharge. The consolation is real, though: it's recalculated each year, so it typically disappears once the two-year lookback moves past the year of the sale.
No. A Medicare Supplement is a private policy with its own premium, set by the insurer and unaffected by your income. IRMAA attaches to Part B and Part D only. If you're weighing the two routes, this comparison goes through the real trade-offs.
Every winter I read these letters at kitchen tables from Branford to Stonington, usually with someone who assumed the number was final because it came from the government on official paper. Often it is final, and the useful thing I can offer is the knowledge that it lifts next year. Sometimes it isn't final at all, there's a form, and we fill it in that afternoon. Either way it's a short conversation and it costs nothing — book a free 30-minute call and bring the envelope.
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