Understanding the Impact of Your Income on Medicare Costs
When enrolling in Medicare, many beneficiaries are surprised to learn that their income directly affects how much they pay for their Medicare premiums. The Social Security Administration (SSA) uses your modified adjusted gross income (MAGI) to determine whether you’ll pay higher premiums for Medicare Part B and Medicare Part D through the Income-Related Monthly Adjustment Amount (IRMAA).
What Income Is Used to Calculate IRMAA?
The Income-Related Monthly Adjustment Amount (IRMAA) is an additional charge added to Medicare Part B and Part D premiums for individuals with higher incomes. The SSA determines IRMAA based on the income you reported on your IRS tax return from two years prior.
- For example, your 2024 Medicare premiums are based on your 2022 tax return data.
- The MAGI includes:
- Adjusted Gross Income (AGI)
- Tax-exempt interest income
- Capital gains
- Rental income
- Pension payments
- Social Security benefits (if taxable)
How Does Income Affect Medicare Premiums?
Medicare has standard monthly premiums, but those with higher MAGI must pay higher amounts under IRMAA. Below are the income brackets for 2024 Medicare premiums:
| Income (MAGI) for Individuals | Income (MAGI) for Married Couples | Monthly Part B Premium | Monthly Part D IRMAA |
|---|---|---|---|
| Up to $103,000 | Up to $206,000 | $174.70 | $0 |
| $103,000 – $129,000 | $206,000 – $258,000 | $244.60 | $12.90 |
| $129,000 – $161,000 | $258,000 – $322,000 | $349.40 | $33.30 |
| $161,000 – $193,000 | $322,000 – $386,000 | $454.20 | $53.80 |
| Above $193,000 | Above $386,000 | $594.00 | $74.20 |
How to Lower Your Medicare Premiums
If your income has decreased due to retirement, loss of income, or other life-changing events, you can request a reconsideration of your IRMAA determination by contacting the SSA. Steps include:
✅ Filing Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event)
✅ Providing proof of income reduction (e.g., tax returns, employer letters)
✅ Requesting an appeal if you believe your income was miscalculated
Final Thoughts: Take Control of Your Medicare Costs
Understanding what income is used to determine Medicare premiums can help you plan ahead and manage your healthcare expenses effectively. If you’re unsure about your eligibility, IRMAA impact, or how to reduce your premiums, our Medicare specialists are here to help.
📞 Call us today at: 1 (877) 255-0284
🌐 Visit our website: MedicareABC
📧 Email us at: info@mymedicareadvisors.com
Let us help you navigate Medicare with confidence!
