Key Takeaways
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In 2025, higher-income Medicare beneficiaries are subject to larger monthly premium adjustments due to updated Income-Related Monthly Adjustment Amount (IRMAA) thresholds.
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Knowing how IRMAA is calculated and how to potentially reduce its impact can help you manage your Medicare costs more effectively.
What Is IRMAA and Why Does It Matter?
Medicare is not one-size-fits-all when it comes to what you pay. If your income exceeds a certain threshold, you’ll pay more for your Medicare Part B and Part D premiums. This surcharge is known as the Income-Related Monthly Adjustment Amount, or IRMAA.
As of 2025, the government reviews your income from two years prior—in this case, your 2023 tax return—to determine whether IRMAA applies to you. If you fall into a higher income bracket, you’ll see an increase in your premiums starting in January 2025.
The 2025 IRMAA Thresholds at a Glance
The IRMAA tiers for 2025 are adjusted annually for inflation. For 2025, the brackets begin at the following income levels:
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Individuals: $106,000 and above
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Joint filers: $212,000 and above
If your income is below these levels, you’ll pay the standard Medicare Part B and Part D premiums. If you’re above them, your premiums will include a monthly adjustment.
There are six IRMAA tiers, each with progressively higher premium surcharges. The more your income exceeds the threshold, the more you pay each month.
How Much More Will You Pay Under IRMAA?
The exact monthly increase depends on which income tier you fall into. While the base Part B premium in 2025 is $185, those affected by IRMAA may pay significantly more—sometimes double or even more than double the base premium.
Similarly, for Medicare Part D (prescription drug coverage), the adjustment is added on top of your plan’s premium, regardless of the plan provider. Again, the higher your income, the higher your adjustment.
Keep in mind that these are monthly costs, and they can add up quickly if both you and your spouse are subject to IRMAA.
How IRMAA Is Calculated
The Social Security Administration (SSA) is responsible for determining if IRMAA applies to you. They look at your Modified Adjusted Gross Income (MAGI), which includes:
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Adjusted gross income (AGI)
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Tax-exempt interest
Your MAGI from your IRS tax return two years prior (2023 for 2025 IRMAA) is used to assign you to an IRMAA bracket.
Once your income level is confirmed, SSA sends you a notice explaining your premium adjustments. If you believe it’s incorrect, you can request a redetermination.
Common Life Events That Can Reduce IRMAA
You may be able to reduce or eliminate your IRMAA if you’ve experienced certain life-changing events. These include:
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Retirement or reduced work hours
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Divorce or death of a spouse
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Loss of income-producing property
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Employer settlement payment ending
In such cases, you can file Form SSA-44 to request a lower IRMAA based on your current income rather than your income from two years ago.
Strategies to Manage or Lower Your IRMAA Exposure
IRMAA can feel like a penalty, but there are ways to mitigate its impact. Planning ahead—especially before and during retirement—can help you keep your income below the IRMAA thresholds.
Some approaches include:
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Roth conversions before enrolling in Medicare: Withdrawals from Roth IRAs aren’t counted toward MAGI.
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Delaying Social Security: Avoids additional taxable income.
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Spreading out income: Avoid taking large capital gains in a single year.
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Maximizing deductions: Charitable donations or business expenses can reduce your MAGI.
These strategies are best discussed with a financial professional who understands Medicare and taxes.
Annual Reassessment Means IRMAA Can Change Year to Year
Unlike your base Medicare premium, IRMAA is not static. It can change every year depending on your income. That means a one-time spike in income—such as selling a property—can temporarily raise your premiums for a full year, even if your income returns to normal afterward.
Each fall, the SSA reassesses your income and adjusts your IRMAA accordingly for the upcoming year.
IRMAA and Medicare Advantage or Part D Plans
IRMAA applies whether you are enrolled in Original Medicare with a standalone Part D plan or a Medicare Advantage plan that includes drug coverage. The additional amount is paid directly to Medicare and is separate from the premium you pay to your plan provider.
If you are enrolled in a plan and subject to IRMAA, you must pay both your plan’s premium and the IRMAA surcharge to maintain your coverage.
How to Appeal IRMAA If You Think It’s Wrong
If your income has dropped or if you believe the SSA made an error, you have the right to appeal your IRMAA determination. Here’s how to do it:
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Review the letter from SSA outlining your IRMAA determination.
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Use Form SSA-44 to request a new determination based on your current income.
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Provide supporting documentation of the life-changing event (e.g., retirement letter, divorce decree).
SSA will then review your case and determine whether to adjust your premiums.
Timing Matters—When to Act on IRMAA Notifications
You’ll typically receive your IRMAA determination in the fall before it takes effect in January. If you want to appeal, it’s important to act promptly so your premiums are correctly set for the new year.
While there’s no exact deadline, filing your appeal before the year ends increases your chances of having the correction apply to January premiums.
What Happens If You Don’t Pay IRMAA?
IRMAA is not optional. If you don’t pay your IRMAA surcharge, your Medicare Part B and/or Part D coverage can be terminated. That means losing your access to physician visits, outpatient services, and prescription drug coverage.
Payment options include:
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Automatic deduction from your Social Security benefits
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Direct billing if you’re not receiving Social Security
It’s essential to stay current with your payments to maintain continuous coverage.
Should You Work With a Professional?
Because IRMAA is tied to tax planning, retirement strategy, and healthcare decisions, many people find it beneficial to consult a professional. A licensed agent listed on this website can walk you through IRMAA implications and help you make informed decisions for 2025 and beyond.
Don’t Let IRMAA Catch You Off Guard
While IRMAA adds complexity to your Medicare costs, being informed can make a big difference. Whether you’re approaching retirement or already enrolled in Medicare, understanding your potential exposure to IRMAA gives you a head start on minimizing unexpected costs.
A licensed agent listed on this website can help you evaluate your income, prepare for possible adjustments, and explore your options if IRMAA applies to you. Don’t wait until you receive a surprise notice—reach out today to stay ahead.
