2021 IRMAA: Slight increase in Medicare Part D IRMAA payments for most along with changes in the IRMAA brackets due to annual inflation adjustments.
The Income-Related Monthly Adjustment
Amount (IRMAA) income brackets became inflation adjusted in 2020. Consequently, people with an annual income under $165,000 who are at the low end of their 2020 IRMAA income bracket could see a decrease (-26% to -100%) in their IRMAA payments as they are moved to a lower 2021 IRMAA income bracket (see comparison chart below).
For example, in 2020, if your IRMAA income was $88,000 filing individual, your Part D IRMAA payment was an additional $12.20 per month and Part B IRMAA was
$57.80. However in 2021, you will no longer have a Part D or Part B IRMAA payment.
All other Medicare Part D beneficiaries earning over $88,000
individually or over $176,000 filing joint will see only a small
increase in
their Part D IRMAA payments.
Income bracket adjustments for 2021 Medicare Part D IRMAA
2021 Medicare Part D Income Related Adjustment Amount (IRMAA)
Income Brackets
|
If your filing status and yearly income in 2019 (filed in 2020) was |
File individual tax return |
File joint tax return |
File married &
separate tax return |
You pay each month for Part D (in 2021) |
$88,000 or less |
$176,000 or less |
$88,000 or less |
no IRMAA, only your plan premium |
above $88,000
up to $111,000 |
above $176,000
up to $222,000 |
not applicable |
$12.30 + your plan premium |
above $111,000
up to $138,000 |
above $222,000
up to $276,000 |
not applicable |
$31.80 + your plan premium |
above $138,000
up to $165,000 |
above $276,000
up to $330,000 |
not applicable |
$51.20 + your plan premium |
above $165,000
and less than $500,000 |
above $330,000
and less than $750,000 |
above $88,000
and less than $412,000 |
$70.70 + your plan premium |
$500,000 and above |
$750,000 and above |
$412,000 and above |
$77.10 + your plan premium |
The 2021 Medicare Part D Income Related Monthly Adjustment Amounts (IRMAA) compared to previous years.
With the adjustments in the IRMAA income brackets over the past few years and the new inflation adjustments, the year-to-year IRMAA payment comparison has become rather complex. The chart below illustrates the changes in IRMAA payments and income brackets since the beginning of the Part D IRMAA payments in 2011.
Beneficiaries who file individual tax returns with income (MAGI) that is: |
Beneficiaries who file joint tax returns with income that is: |
Medicare Part D Income Related Monthly
Adjustment Amount |
2021 |
2020 |
2019 |
2018 |
2017 |
2016 |
2015 |
2014 |
2013 |
2012 |
2011 |
$85,000
or less |
$170,000 or less |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$85,000.01
to $87,000 |
$170,000.01 to $174,000 |
$12.40 |
$13.00 |
$13.30 |
$12.70 |
$12.30 |
$12.10 |
$11.60 |
$11.60 |
$12.00 |
$87,000.01
to $88,000 |
$174,000.01 to $176,000 |
$12.20 |
$88,000.01
to $107,000 |
$176,000.01 to $214,000 |
$12.30 |
$107,000.01
to $109,000 |
$214,000.01 to $218,000 |
$31.90 |
$33.60 |
$34.20 |
$32.80 |
$31.80 |
$31.10 |
$29.90 |
$29.90 |
$31.10 |
$109,000.01
to $111,000 |
$218,000.01 to $222,000 |
$31.50 |
$111,000.01
to $133,500 |
$222,000.01 to $267,000 |
$31.80 |
$133,500.01
to $136,000 |
$267,000.01 to $272,000 |
$51.40 |
$54.20 |
$136,000.01
to $138,000 |
$272,000.01 to $276,000 |
$50.70 |
$138,000.01
to $160,000 |
$276,000.01 to $320,000 |
$51.20 |
$160,000.01
to $163,000 |
$320,000.01 to $326,000 |
$70.90 |
$74.80 |
$55.20 |
$52.80 |
$51.30 |
$50.20 |
$48.30 |
$48.10 |
$50.10 |
$163,000.01
to $165,000 |
$326,000.01 to $330,000 |
$70.00 |
$165,000.01
to $214,000 |
$330,000.01 to $428,000 |
$70.70 |
$214,000.01
and less than $500,000 |
$428,000.01 and less than
$750,000 |
$76.20 |
$72.90 |
$70.80 |
$69.30 |
$66.60 |
$66.40 |
$69.10 |
$500,000
and above |
$750,000 and above |
$77.10 |
$76.40 |
$77.40 |
The percentage change in the 2020 to 2021 Medicare Part D IRMAA payments is shown below.
Beneficiaries who file individual tax returns with income (MAGI)
that is: |
Beneficiaries who file
joint tax returns with income that is: |
Medicare Part D Income
Related Monthly Adjustment Amount |
2021 |
2020 |
$ Increase |
% Increase |
$85,000 or less |
$170,000 or less |
$0.00 |
$0.00 |
$0.00 |
0% |
$85,000.01 to $87,000 |
$170,000.01 to $174,000 |
$0.00 |
$0.00 |
$0.00 |
0% |
$87,000.01 to $88,000 |
$174,000.01 to $176,000 |
$0.00 |
$12.20 |
-$12.20 |
-100.00% |
$88,000.01 to $109,000 |
$176,000.01 to $218,000 |
$12.30 |
$12.20 |
$0.10 |
0.82% |
$109,000.01 to $111,000 |
$218,000.01 to $222,000 |
$12.30 |
$31.50 |
-$19.20 |
-60.95% |
$111,000.01 to $136,000 |
$222,000.01 to $272,000 |
$31.80 |
$31.50 |
$0.30 |
0.95% |
$136,000.01 to $138,000 |
$272,000.01 to $276,000 |
$31.80 |
$50.70 |
-$18.90 |
-37.28% |
$138,000.01 to $163,000 |
$276,000.01 to $326,000 |
$51.20 |
$50.70 |
$0.50 |
0.99% |
$163,000.01 to $165,000 |
$326,000.01 to $330,000 |
$51.20 |
$70.00 |
-$18.80 |
-26.86% |
$165,000.01 to $500,000 |
$330,000.01 to $750,000 |
$70.70 |
$70.00 |
$0.70 |
1.00% |
$500,000 and above |
$750,000 and above |
$77.10 |
$76.40 |
$0.70 |
0.92% |
The monthly IRMAA rates to be paid by beneficiaries who are married and lived with their spouse at any time during the taxable year,
but filed a separate tax return from their spouse, are as follows:
Beneficiaries
who are married
but file separate tax returns
with income that is: |
Medicare Part D
Income Related Monthly Adjustment Amount |
2021 |
2020 |
2019 |
2018 |
2017 |
2016 |
2015 |
2014 |
2013 |
2012 |
2011 |
$85,000
or less |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$85,000.01
to $87,000 |
$70.90 |
$74.80 |
$55.20 |
$52.80 |
$51.30 |
$50.20 |
$48.30 |
$48.10 |
$50.00 |
$87,000.01
to $88,000 |
$70.00 |
$88,000.01
to $129,000 |
$70.70 |
$129,000.01
and less than $412,000 |
$76.20 |
$72.90 |
$70.80 |
$69.30 |
$66.60 |
$66.40 |
$69.10 |
$412,000.01
and less than $413,000 |
$77.10 |
$413,000
and less than $415,000 |
$76.40 |
$415,000
and above |
$77.40 |
A few important notes and reminders about IRMAA:
- Who collects IRMAA:
The additional monthly Part D income-related adjustment amount is not collected by the Medicare Part D plans, but instead paid directly to the Federal government.
- Which taxes are use:
2021 IRMAA is calculated using the most recent tax returns available to the IRS - this would be your 2019 tax returns that were filed in 2020.
- What is considered income:
"Income" for purposes of IRMAA is defined as MAGI or Modified Adjusted Gross Income. MAGI is calculated as your total adjusted gross income (AGI) and tax-exempt interest income.
- How is IRMAA paid:
The amount of your IRMAA will be directly deducted from your Social Security, Railroad Retirement Board, or Office of Personnel Management benefits. If there are not sufficient funds in your government benefits, then Medicare will bill you directly for the unpaid balance of your IRMAA payment.
- How will you be notified:
Medicare Part D beneficiaries affected by the 2021 IRMAA will receive a letter from the Social Security Administration notifying them of their IRMAA payment.
- What happens if you don't pay:
If you do not pay your IRMAA, you will be involuntarily disenrolled from your Medicare Part D or Medicare Advantage plan - and may be without Medicare plan coverage for the remainder of the year.
- You pay IRMAA even if you have a Medicare Advantage plan that includes drug coverage:
If you are a higher-earning Medicare beneficiary, you will find that
Part D IRMAA payments are required whether you receive your Medicare
Part D coverage through a stand-alone Medicare Part D plan (PDP)
or through a Medicare Advantage plan that includes prescription drug coverage (MAPD).
As background, Medicare Part D IRMAA payments can change every year and are calculated using the
annually-released standard base Medicare Part D premium.
The 2021 standard base premium is $33.06, an increase of $0.32 (.98%) or roughly
1% higher than the 2020 standard base premium.
Change in the Medicare Part D Standard Base Premium |
2021 |
2020 |
2019 |
2018 |
2017 |
2016 |
2015 |
2014 |
2013 |
2012 |
2011 |
$33.06 |
$32.74 |
$33.19 |
$35.02 |
$35.63 |
$34.10 |
$33.13 |
$32.42 |
$31.17 |
$31.08 |
$32.34 |
Medicare Part D IRMAA and Medicare Part B IRMAA
People with Medicare who have higher incomes will also pay a
separate IRMAA for their Medicare Part B (out-patient) coverage.
2021 Medicare Part B Income-Related Monthly Adjustments Amount (IRMAA)
Please note: People with Medicare who report taxable income above
$88,000 a year ($176,000 for people filing jointly) are responsible to cover a larger portion
of the cost of their 2021 Medicare
Part B coverage and these monthly Medicare Part B premium adjustments range from an additional $59.40 to an additional $356.40 (per month).
See chart above in Part D section for changes in IRMAA brackets for 2021.
If Your Yearly Income Is |
Your Monthly
Medicare Part B
Premium |
2021
Medicare
Part B
IRMAA |
File Individual Tax Return |
File Joint Tax Return |
File Married & Separate Tax Return |
$88,000 or less (held harmless) |
$176,000 or less (held harmless) |
$88,000 or less (held harmless) |
about $148.50* |
$0.00 |
$88,000 or less |
$176,000 or less |
$88,000 or less |
$148.50 |
$0.00 |
$88,000.01 - $111,000 |
$176,000.01 - $222,000 |
Not applicable |
$207.90 |
$59.40 |
$111,000.01 - $138,000 |
$222,000.01 - $276,000 |
Not applicable |
$297.00 |
$148.50 |
$138,000.01 - $165,000 |
$276,000.01 - $330,000 |
Not applicable |
$386.10 |
$237.60 |
$165,000.01 and less than $500,000 |
$330,000.01 and less than $750,000 |
$88,000.01 - $412,000 |
$475.20 |
$326.70 |
$500,000 and above |
$750,000 and above |
$412,000 and above |
$504.90 |
$356.40 |
* You pay the same premium amount that you paid last year, plus
COLA increase.
According to CMS, IRMAA affects less than 5 percent of Medicare beneficiaries or around 2,850,000 people (other sources claim that 6% of Medicare beneficiaries have income that exceeds the IRMAA limits).
History about the IRMAA income brackets:
Since 2011, people with Medicare who earn over $85,000 have been paying
an additional monthly premium or Income-Related Monthly Adjustment
Amount (IRMAA) for their Medicare Part D prescription drug plan
coverage.
Section 1860D-13(a)(7) of the Social Security Act requires that
beneficiary’s with a "modified adjusted gross income" (MAGI) greater
than the specified threshold amounts ($85,000 in 2019 for a beneficiary
filing an individual income tax return or married and filing a separate
return, and $170,000 for a beneficiary filing a joint tax return), are
responsible for a larger portion of the total cost of Part D their
benefit coverage and should pay back a portion of the cost via IRMAA.
IRMAA income brackets prior to the 2020 inflation adjustments:
Note, from the Federal Register 9/18/2013: "Section 3402 of the Affordable
Care Act temporarily set aside the annual inflation adjustment used to
set the MAGI threshold and ranges for purposes of determining IRMAAs.
From January 1, 2011 through December 31, 2019, the dollar amounts used
for 2010 are the threshold and ranges used to determine if an IRMAA will
apply. During this period, the threshold is $170,000 for beneficiaries
who file their Federal income taxes as married filing jointly and
$85,000 for beneficiaries who file their Federal income taxes with any
other filing status.[3] After 2019, these thresholds will resume
adjustment for inflation as required by section 1839(i)(5) of the Act."
[source:
https://www.federalregister.gov/documents/ 2013/09/18/2013-22445/medicare-determinations-and-income-related-monthly-adjustment-amounts-to-medicare-part-b-premiums]
Appealing your IRMAA?
If you believe you have been wrongly charged IRMAA or have had a change in income, you have the right to appeal your IRMAA or ask for a reassessment. See our IRMAA FAQ: "
How is the income-related monthly adjustment amount or IRMAA affected if my income goes down?" at:
Q1FAQ.com/542.html