Medicare Part D Income Related Monthly Adjustment Amount (IRMAA)

IRMAA is an additional premium that higher earning Medicare beneficiaries pay based on their income earned 2 years prior. 2022 IRMAA is based on beneficiary’s 2020 tax return.

Medicare beneficiaries who earn above certain levels of income must pay a higher Medicare Part D premium to cover their prescription drugs either through standalone Part D or through a Medicare Advantage plan with prescription drugs.

Part D Rx plan premiums vary from plan to plan and are calculated based on each plan’s approved Part D bid comparison to the national average monthly bid amount. The plan-specific total premium amount for the Part D plans with enhanced alternative coverage includes the premium for supplemental benefits in addition to the basic premium.

(Source: 2021 Part D IRMAA https://www.cms.gov/files/document/2021-part-d-income-related-monthly-premium-adjustment.pdf )

If Medicare beneficiary’s MAGI (modified adjusted gross income) is greater than a specified amount for a given year then the beneficiary is responsible for a larger portion of the total cost of Part D benefit coverage and must pay an income-related monthly adjustment amount (IRMAA). The IRMAA is not paid to Part D, but to the federal government.

IRMAA amount varies based on five income brackets. The higher the bracket the Medicare beneficiary falls into the more he pays the Part D IRMAA.

Appealing IRMAA increase: beneficiary can appeal if income was substantially higher previous years because he worked, but now it is significantly lower due to work stoppage or reduction. Form SSA-44 lists the life-changing events, as Marriage; Divorce/Annulment; Death of your Spouse; Work Stoppage; Work reduction; Loss of income producing property; Loss of pension income; Employer settlement payment; that may fulfill the eligibility requirement for IRMAA appeal requesting for use of more recent tax year information to reduce IRMAA amount.

If beneficiary’s income fluctuates year to year, IRMAA fluctuates and is re-evaluated on a year-to-year basis as well.

Check 2021 IRMAA income brackets

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