By: Lynda Tull, Associate Advsior


Did you know that you may have to pay a higher premium for Medicare Part B and Medicare Part D based on a tax return from 2 years ago?

Medicare Part B and Part D use a two-year clawback to determine premiums. The result is a surcharge, known as the Income Related Monthly Adjustment Amount (IRMAA), which is determined based on reported income starting at $85,001 (single filer). The IRMAA applies to premiums whether you purchase coverage from an insurance company or the Social Security Administration.

Unlike some of the penalties for late enrollment, that are imposed for as long as you have Medicare coverage, this surcharge is calculated every year. That being said, there may be years when you will have the adjustment and some that you won’t. It all depends on your modified adjusted gross income (MAGI) from your tax return 2 years prior. For example, your IRMAA for 2019 is based on your 2017 MAGI.

What is MAGI? The Modified Adjusted Gross Income is the Adjusted Gross Income (AGI) from your tax return with some tax exempt income added back. Some examples, not a full list, of this income includes tax-exempt interest income, interest from US savings bonds, and earned income of US citizens living abroad.

To determine if an IRMAA is required for 2019, find where your 2017 MAGI falls on the chart under the correct filing status.

Table created with information on IRMAAs from

Is there a way to reevaluate the IRMAA if you don’t agree with it? Possibly. If your income has decreased due to a covered reason and you have documented proof, you can call and have the Social Security Administration take another look at your IRMAA. If you disagree with the decision about your IRMAA, you have the right to appeal to Social Security.

Also talk with your financial advisor, who should be well versed in helping you plan for retirement so that you can plan on this and other, less well known rules and regulations such as late enrollment penalties, See link for more information.  If your financial advisor offers comprehensive wealth management, they may even make the phone calls for you.

If you have any additional questions or if you are interested in sitting down for a no-obligation initial meeting to see if you may be subjected to the IRMAA, I invite you to reach out to me.