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2020 IRMAA: Slight Decrease in Medicare Part D IRMAA payments for most along with larger decreases for some as IRMAA brackets become annually inflation adjusted.

Category: IRMAA - for Higher Incomes
Published on 2019-11-01 11:22:33


Starting in 2020, the Income-Related Monthly Adjustment Amount (IRMAA) income brackets will be adjusted for inflation.  Consequently, people at the low end of their 2019 IRMAA income bracket will see a 28% to 62% decrease in their IRMAA payments as they are moved to a lower IRMAA income bracket (see comparison chart below).

All other Medicare Part D beneficiaries earning over $87,000 individually or over $174,000 filing joint will see only a small decrease in their Part D IRMAA payments as compared to their current 2019 payments - assuming their income remains consistent.

For example, in 2019, if your income was $86,000 filing individual, your IRMAA payment was an additional $12.40 per month.  However in 2020, you will no longer have an IRMAA payment.

Income bracket adjustments for 2020 Medicare Part D and Medicare Part B IRMAA

All but the highest 2020 IRMAA income brackets have been adjusted up roughly 2%, thus giving significant IRMAA payment decreases to some earners near the bottom of last year's income brackets.

If your filing status and yearly income in 2018 was
File individual tax return File joint tax return File married &
separate tax return
You pay each month (in 2020)
$87,000 or less $174,000 or less $87,000 or less no IRMAA, only your plan premium
above $87,000
up to $109,000
above $174,000
up to $218,000
not applicable $12.20 + your plan premium
above $109,000
up to $136,000
above $218,000
up to $272,000
not applicable $31.50 + your plan premium
above $136,000
up to $163,000
above $272,000
up to $326,000
not applicable $50.70 + your plan premium
above $163,000
and less than $500,000
above $326,000
and less than $750,000
above $87,000
and less than $413,000
$70.00 + your plan premium
$500,000 and above $750,000 and above $413,000 and above $76.40 + your plan premium


The 2020 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
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
$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 $107,000 $174,000.01 to $214,000 $12.20
$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 $133,500 $218,000.01 to $267,000 $31.50
$133,500.01 to $136,000 $267,000.01 to $272,000 $51.40 $54.20
$136,000.01 to $160,000 $272,000.01 to $320,000 $50.70
$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 $214,000 $326,000.01 to $428,000 $70.00 $55.20 $52.80 $51.30 $50.20 $48.30 $48.10 $50.10
$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 $76.40 $77.40


The percentage change in the 2019 to 2020 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
2020 2019 $ Increase % Increase
Less than or equal to $85,000 Less than or equal to $170,000 $0.00 $0.00 $0.00 0%
$85,000.01 to $87,000 $170,000.01 to $174,000 $0.00 $12.40 -$12.40 -100%
87,000.01 to $107,000 174,000.01 to $214,000 $12.20 $12.40 -$0.20 -2%
$107,000.01 to $109,000 $214,000.01 to $218,000 $12.20 $31.90 -$19.70 -62%
$109,000.01 to $133,500 $218,000.01 to $267,000 $31.50 $31.90 -$0.40 -1%
$133,500.01 to $136,000 $267,000.01 to $272,000 $31.50 $51.40 -$19.90 -39%
$136,000.01 to $160,000 $272,000.01 to $320,000 $50.70 $51.40 -$0.70 -1%
$160,000.01 to $163,000 $320,000.01 to $326,000 $50.70 $70.90 -$20.20 -28%
$163,000.01 and less than $500,000 $326,000.01 and less than $750,000 $70.00 $70.90 -$0.90 -1%
$500,000 and above $750,000 and above $76.40 $77.40 -$1.00 -1%

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
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
$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 $129,000 $70.00
$129,000.01 and less than $413,000 $76.20 $72.90 $70.80 $69.30 $66.60 $66.40 $69.10
$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: 
    2020 IRMAA is calculated using the most recent tax returns available to the IRS - this would be your 2018 tax returns that were filed in 2019.

  • 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 2020 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 2020 standard base premium is $32.74, a decrease of $0.45 (-1.4%) or roughly 1.5% lower than the 2019 standard base premium.

Change in the Medicare Part D Standard Base Premium
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
$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.

2020 Medicare Part B Income-Related Monthly Adjustments Amount (IRMAA)

Please note: People with Medicare who report taxable income above $87,000 a year ($174,000 for people filing jointly) are responsible to cover a larger portion of the cost of their 2020 Medicare Part B coverage and these monthly Medicare Part B premium adjustments range from an additional $57.80 to an additional $325 (per month).

See chart above in Part D section for changes in IRMAA brackets for 2020.

If Your Yearly Income Is Your Monthly
Medicare Part B
Premium
2020
Medicare
Part B
IRMAA
File Individual Tax Return File Joint Tax Return
$87,000 or below (held harmless) $174,000 and below about $135.50* $0.00
$87,000 or below $174,000 and below $144.60 $0.00
$87,000.01 - $109,000 $174,000.01 - $218,000 $202.40 $57.80
$109,000.01 - $136,000 $218,000.01 - $272,000 $289.20 $144.60
$136,000.01 - $163,000 $272,000.01 - $326,000 $376.00 $231.40
$163,000.01 and less than $500,000 $326,000.01 and less than $750,000 $462.70 $318.10
Greater than or equal to $500,000 Greater than or equal to $750,000 $491.60 $347.00
* You pay the same premium amount that you paid last year, plus COLA increase.

Monthly Medicare Part B premiums for Medicare beneficiaries who are married and lived with their spouse at any time during the taxable year, but file separate tax returns, are:

Beneficiaries who are married and lived with their spouse at any time during the year, but file a separate tax return from their spouse: 2020
Medicare Part B premium amount
Medicare Part B IRMAA
Less than or equal to $87,000 (held harmless) about $135.50* $0.00
Less than or equal to $87,000 $144.60 $0.00
Greater than $87,000 and less than $413,000 $462.70 $318.10
Greater than or equal $413,000 $491.60 $347.00
* 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: https://Q1FAQ.com/542.html






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