Medicare Part D
How Your Income Shapes 2026 Medicare Part B and Part D Costs
SACRAMENTO, Calif. — As Medicare's Annual Enrollment Period runs through Dec. 7, people choosing 2027 drug coverage here are taking a closer look at three Part D changes working together: a higher annual out-of-pocket cap, the end of the old coverage gap, and a payment plan that spreads drug costs across the year.
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Click to call 855-729-3240Key takeaways
- IRMAA is an extra charge added to your Part B and Part D premiums if your income is above a certain level set by CMS, and it is not a penalty.
- Your 2027 IRMAA amount will be based on the tax return you filed for 2025, since Social Security looks back two years to check your income.
- Most people with Medicare do not pay IRMAA, but for those who do, the surcharge rises in tiers as income goes up.
- If a life-changing event lowered your income, you can file Form SSA-44 with documentation to ask Social Security to recalculate your IRMAA, which could reduce it to zero.
If you're enrolling, renewing, or just budgeting for next year, here's a clear read on how income thresholds work, when the extra charges kick in, and what to do if your income has changed.
What IRMAA is, in plain English
IRMAA is an extra amount that some people pay on top of the standard Part B premium and their Part D plan premium. It isn't a penalty — it's a sliding surcharge tied to income.
Social Security uses your modified adjusted gross income (MAGI) from your IRS return two years back to decide whether IRMAA applies. So your 2027 surcharges are based on the tax return you filed for 2025.
Most people with Medicare do not pay IRMAA. It only affects beneficiaries whose income is above the annual threshold set by the Centers for Medicare & Medicaid Services (CMS).
The 2026 income thresholds
For 2026, IRMAA begins for:
- Single filers with MAGI above $109,000
- Married couples filing jointly with MAGI above $218,000
- Married filing separately (who lived with a spouse): a much lower threshold applies, and the surcharge climbs quickly
Above those numbers, IRMAA is charged in tiers. The higher your income, the higher the surcharge — for both Part B and Part D. At the top tier, the combined extra amount can add hundreds of dollars per month.
CMS publishes the full tier chart each fall at Medicare.gov under "Costs." That is the most reliable place to check the exact dollar figures that apply to your bracket.
How you'll be billed
- Part B IRMAA is added to your Part B premium. If you receive Social Security, it's deducted from your monthly benefit. If not, you'll get a bill from Medicare.
- Part D IRMAA is separate from what you pay your drug plan. Even if your Part D plan bills you directly for its premium, the IRMAA piece is billed by Medicare — not by the plan.
That split trips up a lot of new enrollees. If you see two charges, that's normal.
If your income has dropped, you can appeal
This is the part many people miss. If you had a "life-changing event" that lowered your income, you can ask Social Security to use more recent figures instead of your 2025 return. Qualifying events include:
- Retirement or reduced work hours
- Marriage, divorce, or the death of a spouse
- Loss of pension income
- Loss of an income-producing property
You file Form SSA-44 with Social Security and include documentation. If approved, your IRMAA is recalculated — sometimes down to zero.
Why this matters right now
The Annual Enrollment Period (Oct. 15 – Dec. 7) is when most people compare Part D and Medicare Advantage options for the coming year. Sacramento is in Sacramento County, where beneficiaries have 23 Medicare Advantage plans from 10 carriers to consider for 2027 along with stand-alone Part D plans — but comparing premiums alone can mislead higher earners who will also owe IRMAA.
Three Part D changes are worth putting on your radar as you shop for 2027:
- Part D out-of-pocket cap for covered drugs: $2,100 in 2026 and $2,400 in 2027.
- Part D deductible maximum: $615 in 2026 and $700 in 2027 (plans can set theirs lower).
- The old coverage gap ("donut hole") is gone; Part D now has three phases.
- The Medicare Prescription Payment Plan lets you spread drug costs across the year in monthly installments at no added cost.
None of those change whether you owe IRMAA, but they do change the math of your total drug spending.
By the numbers
Medicare Part B premium, 2006–2026
The standard monthly Part B premium has climbed from $88.50 in 2006 to $202.90 in 2026. Hover any point for that year’s premium.
Source: CMS. Standard premium shown; in some hold-harmless years many existing enrollees paid less. Confirm at Medicare.gov.
By the numbers
How people get Medicare in Sacramento County
(MA penetration in Sacramento County)
MA penetration from CMS enrollment data; Medigap share is an estimate. U.S. average is about 54% Medicare Advantage. These are area-level figures, not plan-specific.
Higher-income surcharges
2026 IRMAA income brackets
If your income is above a threshold, you pay an income-related surcharge (IRMAA) on top of your Part B and Part D premiums. Your 2027 surcharge will be based on your 2025 tax return. CMS publishes the 2027 brackets and surcharge amounts later in the fall, usually in November.
| Income — single filer | Income — married, joint | Part B monthly premium | Part D surcharge |
|---|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 | Plan premium only |
| $109,001 – $137,000 | $218,001 – $274,000 | $284.10 | + $14.50 |
| $137,001 – $171,000 | $274,001 – $342,000 | $405.80 | + $37.40 |
| $171,001 – $205,000 | $342,001 – $410,000 | $527.50 | + $60.40 |
| $205,001 – $500,000 | $410,001 – $750,000 | $649.30 | + $83.30 |
| Above $500,000 | Above $750,000 | $689.90 | + $91.00 |
Standard Part B premium is $202.90/month. Part D surcharges are added to your drug plan’s premium. Married-filing-separately uses a different, compressed schedule. Confirm current amounts at Medicare.gov.
Try it
Find your 2026 Medicare premium
Most people pay the standard Part B premium. If your 2024 income was higher, an income-related surcharge (IRMAA) applies. Enter your details to see your bracket.
Surcharges are added to your premiums and based on your 2024 tax return. Married-filing-separately uses a different schedule. Confirm at Medicare.gov.
Try it
How the 2026 Part D drug cap works
Slide to your estimated yearly prescription costs and see how the new $2,100 out-of-pocket cap protects you. This illustrates the standard Part D benefit; your plan may structure costs differently.
Once your out-of-pocket spending on covered drugs reaches $2,100, you pay nothing more for the rest of 2026. Confirm details at Medicare.gov.
Good to know
Frequently asked questions
Q: I just retired. Do I really have to pay IRMAA based on when I was still working?
Q: Does IRMAA go away once my income drops?
Q: Can I avoid Part D IRMAA by skipping Part D?
- CMS — Medicare costs & IRMAA (medicare.gov)
For personalized answers, contact Medicare.gov, 1-800-MEDICARE, or your local SHIP.