What You Need to Know
- High-income clients may pay more than others for part of Medicare.
- The calculations are based on income from two years ago.
- Clients who have undergone a qualifying event, such as cessation of work, may be able to persuade SSA to change the IRMAA.
There are parts of Medicare that require beneficiaries to pay a monthly premium.
In some cases, this premium is subject to adjustment based on your income.
An income-related monthly adjustment amount (IRMAA) may be applied to Medicare beneficiaries that report higher income levels.
This surcharge amount only equates to a higher premium and has no effect on the type or quality of benefits that a person receives.
What is IRMAA, and how is it calculated?
An income-related monthly adjustment amount (IRMAA) is determined by the Social Security Administration (SSA) based on tax information provided by the Internal Revenue Service (IRS).
If the SSA determines that an IRMAA should apply to your client’s premiums, your client will receive a predetermination notice in the mail.
This can happen at any time during the year and will present information about how the IRMAA was calculated and how to dispute any inaccurate calculations.
IRMAAs only apply to certain parts of Medicare.
They do not apply to Parts A or C.
IRMAAs can be applied to premiums for Parts B and D, and are calculated based on your client’s tax information from two years ago.
So, for 2022, tax filings from 2020 would be used to make a determination.