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Life Health > Health Insurance > Medicare Planning

Understanding IRMAA: A Medicare Customer Question

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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.

The Question:

What is IRMAA, and how is it calculated?

The Answer:

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.

The SSA reevaluates whether or not to apply IRMAAs to Medicare premiums every year.

Depending on your client’s income in a given year, an IRMAA may be added, removed, or updated.

If an IRMAA is correctly applied to your client’s premium, the amount will simply be added to your client’s monthly bill.

If your client receives an IRMAA notice from the SSA and feels that the notice was sent in error, your client may file an appeal within 60 days of the notice.

Outside of this time frame, the SSA will determine if there are legitimate grounds for an appeal.

Your client may appeal if your client suspects that the SSA used inaccurate or outdated financial information to determine the IRMAA.

Your client can also appeal if your client has experienced significant qualifying events that would impact your client’s income, including marriage/divorce, death of a spouse, or reduction/cessation of work.

If appealing due to a qualifying event, various forms of documentation will likely be required for submission.

Client who are uncertain about their financial situation and how it may impact their premiums should be talking to you, and their tax planners, about that.

Understanding how IRMAAs are calculated and applied, as well as what Medicare looks at and considers as income, will allow your clients to maximize their Medicare benefits.


Bethany CissellBethany Cissell is a health care insurance services specialist at Allsup.

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(Image: Adobe Stock)