Most people don’t realize that their 2026 Medicare premiums are actually decided by the tax return they filed two years ago. At Clear Benefit Solutions, we often see clients surprised by a sudden spike in their monthly costs, only to find out it’s due to a “look-back” at their peak earning years. How does your income affect your Medicare?
If you’re seeing a surcharge on your Medicare Part B and Part D premiums this year, you’ve likely met IRMAA.
What is IRMAA?
IRMAA stands for Income-Related Monthly Adjustment Amount. It is an extra charge added to your standard Medicare premiums if your income exceeds certain thresholds. Think of it as a progressive surcharge: the more you earned, the more you contribute to the Medicare program.
Because the Social Security Administration (SSA) uses the most recent tax data available from the IRS, there is a two-year lag. This means your 2026 premiums are based on your 2024 tax return.
The 2026 Thresholds: Are You Affected?
For 2026, the income brackets have shifted slightly due to inflation. If your Modified Adjusted Gross Income (MAGI) in 2024 was above the following amounts, you will likely see an IRMAA surcharge:
- Single Filers: Over $109,000
- Married Filing Jointly: Over $218,000
The surcharge applies to both Part B (Medical Insurance) and Part D (Prescription Drug Coverage). For example, while the standard Part B premium in 2026 is $202.90, a single filer who earned $110,000 in 2024 will pay a total of $284.10 per month—an extra $81.20 purely because of that 2024 income.
The “Fairness” Gap: Why You Might Be Overpaying
The biggest frustration with the two-year look-back is that your life in 2026 might look very different than it did in 2024. Many of our clients were high earners in 2024 but have since retired, meaning their current income is a fraction of what it used to be.
If you are being charged a “High Earner” surcharge based on a salary you no longer receive, you don’t have to just accept it.
How to Appeal: The “Life-Changing Event”
You can request a reduction in your IRMAA surcharge if you have experienced what the SSA calls a Qualifying Life-Changing Event (LCE). Common examples include:
- Work Stoppage: You officially retired.
- Work Reduction: You moved to part-time or took a significant pay cut.
- Death of a Spouse: Your household income or filing status changed.
- Divorce or Annulment: A change in your legal filing status.
- Loss of Pension: A pension plan was terminated or significantly reduced.
How to take action:
To appeal, you must file Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event). You will need to provide documentation, such as a retirement letter from your employer or a death certificate, along with an estimate of your current year’s lower income.
Your Next Step
Don’t let a successful 2024 career penalize your 2026 retirement budget. If you believe your Medicare premiums are incorrectly high due to a recent life change, we can help you navigate the appeal process. Contact us today!