How Changes in Income Affect Medicare Premiums

Question: I usually have my Medicare premiums paid automatically from my Social Security benefits, but I now receive a separate monthly Medicare premium bill in addition to the amount that is debited from my Social Security benefits each month. Why am I receiving this extra bill?

Answer: It’s likely you are receiving the extra bill because you’re now subject to the Medicare high-income surcharge, officially called the Income-Related Monthly Adjustment Amount (IRMAA). If this is the case, your bill will say “IRMAA.” You have to pay this surcharge if your modified adjusted gross income, plus tax-exempt interest income, was higher than $85,000 if you’re single or $170,000 if married filing jointly on your last tax return on file (usually 2017 for 2019 premiums).

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This surcharge boosts your monthly Medicare Part B premiums from the standard $135.50 in 2019 to a range of $189.50 to $460.50 per month, depending on your income. If you also have Medicare Part D prescription-drug coverage, you may also have to pay an extra $12.40 to $77.40 per month in addition to your Part D premiums. If you and your spouse file jointly and are both receiving Medicare benefits, you’ll both be subject to the high-income surcharge. For more information about the rules and the income levels, see Medicare Premiums: Rules for Higher-Income Beneficiaries.

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If your income has dropped since 2017 because of certain life-changing events, such as marriage, divorce, death of a spouse or retirement, you can ask to have your Medicare premiums based on your more recent income, which could reduce or eliminate the surcharge. File Form SSA-44 with the Social Security Administration along with evidence of the eligible life-changing event (such as a statement from your employer with the date of your retirement) and an estimate of your reduced income for the year. For more information, see Save Money on Medicare.

If your income was unusually high in 2017 for other reasons—say, you sold investments for a profit or rolled money over from a traditional IRA to a Roth—you won’t be able to get your premiums reduced this year. But they may go back down next year when your premiums will be based on your 2018 income.

For more information about your Medicare bill, see Understanding the Medicare Premium Bill.

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.