Higher Medicare Part D premiums for people with higher incomes: IRMAA

Can I be assessed an Income Related Monthly Adjustment Amount (IRMAA) for Medicare Part D if I am enrolled in a Medicare Advantage plan?

Yes. If your annual income exceeds certain limits - and you are enrolled in a Medicare Advantage (HMO, PPO, or PFFS) plan that includes prescription drug coverage  (MAPD), then your MAPD actually includes Medicare Part D drug coverage (along with Medicare Part A and Medicare Part B coverage) - and you can be charged an Income-Related Monthly Adjustment Amount (IRMAA) for both your Medicare Part D and Medicare Part B coverage.

However, if you are enrolled in a Medicare Advantage plan that does not include prescription drug coverage (MA) and you do not have any other Medicare Part D prescription drug coverage, then you will not be charged Medicare Part D IRMAA -- but you will still pay Medicare Part B IRMAA.

Can I be disenrolled from my Medicare prescription drug plan if I refuse to pay my Medicare Part D IRMAA?

Yes. If you are a Medicare beneficiary who earns a higher income, you can be assessed an Income-Related Monthly Adjustment Amount (IRMAA) that must be paid in addition to your Medicare Part D premium (if you are enrolled in a Medicare prescription drug plan) and your Medicare Part B premium.

If you do not pay your Part D IRMAA, Medicare will notify your Medicare Part D plan and your Part D plan can "involuntarily" disenroll you from your Medicare plan and you can be without prescription drug coverage for the remainder of the year unless you can use a Special Enrollment Period to join another Medicare Part D or Medicare Advantage plan.

Also, if you lose your Medicare Part D coverage, you may accumulate a permanent late-enrollment premium penalty for every month that you are without some form of creditable prescription drug coverage.

How does the Social Security Administration (SSA) determine whether I pay a higher Medicare Part B and Medicare Part D premium?

Your most recent Federal income tax returns are used to determine whether you pay an income-related monthly adjustment amount or IRMAA - however, this means that your current IRMAA is determined by your income from two years ago.

For example, your 2024 Income Related Medicare Adjustment Amount (IRMAA) is based on the most recent tax return that the IRS provides to the Social Security Administration (SSA) and in general, the IRS will report the financial information provides on your 2022 federal tax returns that were filed in 2023.

However, in some cases the SSA determined your IRMAA using earlier tax returns --- for instance, your 2024 IRMAA may be determined by 2021 federal tax returns that were filed in 2022 if the IRS did not provided the SSA with a more recent tax return.

As noted by the Social Security Administration:

To determine if you will pay higher Medicare Part B and Medicare Part D premiums, Social Security uses the most recent Federal tax return that the IRS provides.

If you must pay higher premiums, the Social Security Administration uses a sliding scale to make the adjustments bases the sliding scale on your modified adjusted gross income (MAGI).

How is the income-related monthly adjustment amount or IRMAA affected if my income goes down?

You can ask the Social Security Administration to reconsider your income-related monthly adjustment amount or IRMAA.

As noted by the Social Security Administration:
 
If your income has gone down due to any of the following situations and the change makes a difference in the income level considered by the Social Security Administration, contact the Social Security Administration and explain that you have new information and may need a new decision about your income-related monthly adjustment amount based on the following:

• You married, divorced, or became widowed;
• You or your spouse stopped working or reduced your work hours;
• You or your spouse lost income-producing property due to a disaster or other event beyond your control;
• You or your spouse experienced a scheduled cessation, termination, or reorganization of an employer’s pension plan; or
• You or your spouse received a settlement from an employer or former employer because of the employer’s closure, bankruptcy, or reorganization.

If any of the above applies to you, the Social Security Administration needs to see documentation verifying the event and the reduction in your income. The documentation you provide should relate to the event and may include a death certificate, a letter from your employer about your retirement, or something similar. If you filed a Federal income tax return for the year in question, you need to show the Social Security Administration your signed copy of the return.