Medicare Part D

IRMAA & Medicare Premiums in Jackson Township, N.J.

JACKSON TOWNSHIP, N.J. — With Medicare's Annual Enrollment Period running through Dec. 7, higher-income households here in Ocean County are getting a closer look at something that surprises many retirees: the income-related surcharge, or IRMAA, that can push Part B and Part D premiums well above the standard amount in 2027.

The rule itself isn't new, but the income thresholds shift each year — and the income Medicare uses to decide who pays extra is usually from two years earlier. That timing catches a lot of people off guard, especially anyone who recently retired, sold a home, or took a large IRA withdrawal.

What IRMAA actually is

IRMAA stands for the Income-Related Monthly Adjustment Amount. It's not a tax and it's not a penalty. It's an extra amount added to your Medicare Part B premium (which covers doctor visits and outpatient care) and your Part D premium (which covers prescription drugs) if your income is above certain limits.

Most people on Medicare pay only the standard Part B premium and no IRMAA at all. The surcharge only kicks in at the higher income brackets, and it climbs in steps as income rises.

The IRMAA income thresholds

For 2026, IRMAA starts above $109,000 for a single filer and above $218,000 for a married couple filing jointly. From there, the surcharge steps up through several brackets, with the highest surcharge applying to individuals with incomes at the top of the scale (generally $500,000 and up single, $750,000 and up joint).

The exact monthly dollar amounts for each bracket are published by CMS on Medicare.gov each fall. Because Part B and Part D each have their own IRMAA add-on, a household in a higher bracket may see two surcharges — one on their Part B premium and one added to their Part D premium.

Which year's income counts

Here's the part that trips people up: Medicare doesn't look at your current income. It uses your modified adjusted gross income (MAGI) from the tax return you filed two years earlier. So your 2027 premiums are based on your 2025 federal tax return.

That's why a one-time income spike — a Roth conversion, a capital gain from selling a house, a big bonus in your last working year — can raise your Medicare premium two years later, even if your income has since dropped back down.

If your income has changed

Social Security allows you to request a new decision if you've had a qualifying "life-changing event." Common examples include:

• Retirement or reduced work hours
• Loss of a spouse
• Divorce or annulment
• Loss of pension income
• A work stoppage or reduction for one or both spouses

To ask for a reconsideration, you file Form SSA-44 with the Social Security Administration and provide documentation. If approved, Social Security will recalculate your premium using your more recent, lower income.

How you actually pay it

If you receive Social Security benefits, IRMAA is deducted from your monthly check along with your standard Part B premium. The Part D portion of IRMAA is billed separately — it is not paid to your drug plan or your Medicare Advantage plan. You pay it directly to Medicare, usually through Medicare Easy Pay or a bill from CMS.

That surprises people too. Even if your Part D coverage is bundled inside a Medicare Advantage plan, the Part D IRMAA still comes as a separate charge.

How this fits with other 2027 changes

IRMAA is only one piece of what's changing next year. In 2027, Part D has a $2,400 out-of-pocket cap on covered prescriptions, and the maximum Part D deductible is $700. The coverage gap — what people used to call the "donut hole" — was eliminated in 2025, so there are now three phases of drug coverage instead of four. Anyone who wants to spread prescription costs across the year can also opt into the Medicare Prescription Payment Plan.

None of those changes remove IRMAA for higher-income households, but they do affect the total picture of what Medicare costs in 2027.