Medicare Part D

Why Spearfish Retirees See IRMAA Charges on Medicare

Spearfish, S.D. — As the Medicare Annual Enrollment Period runs through Dec. 7, higher-income retirees in the Black Hills are getting a fresh look at something that catches many people off guard: an income-based surcharge that raises what they pay for Part B and Part D. It's called IRMAA, and understanding how it works this fall can help you plan before 2027 begins.

What IRMAA actually is

IRMAA stands for the Income-Related Monthly Adjustment Amount. It's not a penalty — it's an extra amount added to your standard Part B premium and, if you have drug coverage, your Part D premium. Most people with Medicare pay the standard Part B premium. But if your income is above a set threshold, Social Security tacks on a surcharge each month.

The surcharge applies whether your Part D coverage comes through a stand-alone drug plan or is built into a Medicare Advantage plan with drug coverage.

The income thresholds that set IRMAA

For 2026, IRMAA kicks in when your modified adjusted gross income (MAGI) is above:

• $109,000 for a single filer or head of household
• $218,000 for a married couple filing jointly
• $109,000 for someone married but filing separately who lived with their spouse (a much lower cutoff applies here)

From there, the surcharge steps up through five income brackets, with the highest amount hitting single filers above $500,000 and joint filers above $750,000. The higher your income, the higher both your Part B and Part D adjustments.

You can see the full bracket chart on Medicare.gov under "Costs."

How Social Security decides what you pay

Here's the part that surprises people: Social Security uses your most recent tax return on file — usually from two years earlier. So your 2027 Medicare costs will be based on your 2025 income.

That means a one-time bump in 2025 — selling a home, cashing out an investment, taking a large IRA withdrawal, or a Roth conversion — could push you into IRMAA territory in 2027 even if your current income is much lower.

You'll get a letter from Social Security if IRMAA applies to you. Read it carefully; it explains which bracket you fall into and how to appeal.

When you can ask for a do-over

If your income has dropped because of a life-changing event, you can ask Social Security to use a more recent year instead. Qualifying events include:

• Retirement or reduced work hours
• Marriage, divorce, or the death of a spouse
• Loss of pension income
• An employer settlement payment

To request a reconsideration, file Form SSA-44 with documentation. This is one of the most useful — and most overlooked — tools for newly retired folks in Spearfish and across Lawrence County.

What's changing in Part D for 2027

Even if IRMAA doesn't apply to you, Part D itself is changing in ways worth knowing:

• The annual out-of-pocket cap is $2,100. Once you hit it, you pay $0 for covered drugs the rest of the year.
• The maximum deductible is $615, though many plans set theirs lower.
• The old "donut hole" is gone. Part D now has three phases: deductible, initial coverage, and catastrophic.
• The Medicare Prescription Payment Plan lets you spread drug costs across the year in monthly installments instead of paying big bills at the pharmacy counter.

These changes apply to everyone, but they matter especially if you're weighing options during Annual Enrollment (Oct. 15 – Dec. 7) or the Medicare Advantage Open Enrollment Period (Jan. 1 – March 31).

Local help in Spearfish

Spearfish is in Lawrence County, where residents have access to South Dakota's SHIINE program (Senior Health Information and Insurance Education) — the state's federally supported SHIP counseling service. SHIINE counselors give free, unbiased help understanding IRMAA letters, comparing coverage, and filing appeals.

You can also call 1-800-MEDICARE (1-800-633-4227) or visit Medicare.gov for official figures and to use the Plan Finder tool. CMS publishes the 2027 Part B premium, deductible and IRMAA brackets later in the fall.