Medicare Part D

How Your Income Shapes 2026 Medicare Part B and D Costs

CRANSTON, R.I. — As Medicare's Annual Enrollment Period runs through Dec. 7, many Rhode Islanders are looking at their 2027 costs and asking a fair question: why do some people pay more than others for the same Medicare coverage? The answer, for higher earners, comes down to a surcharge called IRMAA — and the income thresholds that trigger it are worth understanding before you finalize any decisions this fall.

What IRMAA is, in plain English

IRMAA stands for the Income-Related Monthly Adjustment Amount. It's an extra amount added to your standard Part B premium and, separately, to your Part D drug plan premium if your income is above a certain level. It is not a penalty for doing something wrong — it's simply how Medicare asks higher-income beneficiaries to pay a larger share.

The important thing to know: IRMAA is set by the Social Security Administration based on your tax return, and it can change from year to year as your income changes.

The 2027 income thresholds

For 2026, IRMAA begins for single filers with modified adjusted gross income above $109,000, and for married couples filing jointly above $218,000. Below those numbers, you pay the standard Part B premium and no Part D adjustment. Above them, the surcharge climbs through several tiers, with the highest tier reserved for individuals earning above roughly $500,000 (or $750,000 for couples).

A few things trip people up:

• Medicare uses your income from two years ago. Your 2027 IRMAA will be based on your 2025 tax return.
• The surcharge applies to both Part B and Part D. Even if you have a Medicare Advantage plan or a standalone drug plan, the Part D piece of IRMAA is billed to you directly, usually through Social Security.
• The thresholds are cliffs, not slopes. Going one dollar over a bracket bumps you to the next tier for the whole year.

Why 2027 is a notable year for drug costs

Even setting IRMAA aside, 2027 brings meaningful Part D changes that every Cranston resident on Medicare should know about:

• The annual out-of-pocket cap for Part D drugs is $2,100 in 2026 and $2,400 in 2027. Once you hit that amount in covered prescription costs, you pay nothing more for covered drugs that year.
• The maximum Part D deductible is $615 for 2026 and $700 for 2027.
• The old coverage gap (the "donut hole") is gone as of 2025, replaced by a simpler three-phase structure.
• The Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs across the calendar year in monthly installments instead of paying at the pharmacy counter.

These changes don't remove IRMAA, but they do reshape what higher-income beneficiaries get in exchange for those higher premiums.

What to do if your income has dropped

If your income two years ago was higher than it is now — because you retired, sold a business, lost a spouse, or had another qualifying life event — you can ask Social Security to reconsider your IRMAA. The form is called SSA-44, "Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event."

Qualifying events include:

• Marriage, divorce, or the death of a spouse
• Work stoppage or reduction (including retirement)
• Loss of income-producing property
• Loss or reduction of certain pension income

You'll need documentation, but this is a well-worn process, and appeals are frequently granted when the paperwork is in order.

How this fits into your AEP decisions

Cranston is in Providence County, where beneficiaries have a wide range of Medicare Advantage and standalone Part D plans to choose from during Annual Enrollment. IRMAA itself is not a reason to pick one plan over another — the surcharge follows you regardless of which drug plan you enroll in. But it's a good reason to:

• Review your income projections before year-end, especially if a Roth conversion, capital gain, or required minimum distribution could push you across a threshold.
• Compare drug plans on total expected cost, not just premium — since the $2,100 cap and the smoothing option can change the math significantly.
• Talk to a tax professional if you're close to a bracket line. Sometimes small planning moves make a real difference.