Medicare Income-Related Monthly Adjustment Amount (IRMAA) Surcharges for 2025

For Medicare participants with higher incomes, the 2025 Medicare Income-Related Monthly Adjustment Amount (IRMAA) may lead to additional monthly surcharges for Medicare Part B and Part D. Here’s a guide to understanding IRMAA, how it’s calculated, and what actions you can take to manage these costs.

What is IRMAA (Income-Related Monthly Adjustment Amount)?

IRMAA is a surcharge for higher-income Medicare participants, applied to their Part B (medical) and Part D (prescription drug) premiums. Your IRMAA eligibility is based on your Modified Adjusted Gross Income (MAGI) from two years prior. This means that for 2025, your IRMAA is determined by your 2023 tax return.

The Social Security Administration (SSA) assesses IRMAA, and adjustments are based on inflation and income brackets, which update yearly. If your 2023 income exceeds the set thresholds, you’ll pay an additional amount on top of your base Medicare premiums.

2025 IRMAA (Income-Related Monthly Adjustment Amount) Brackets for Medicare Part B and Part D

Your IRMAA is determined by your income and filing status. Here are the 2025 brackets:

Note: For Medicare enrollees who are married but file separate tax returns and have lived with their spouses at any time during the year, the IRMAA surcharges for 2025 are higher than those for married couples who file jointly. Here’s a breakdown of the IRMAA amounts for those filing separately in 2025:

IRMAA Surcharges for Married Filing Separately

Medicare Part B

• Income greater than $106,000 and less than $394,000: Part B IRMAA surcharge is $406.90.
• Income greater than or equal to $394,000: Part B IRMAA surcharge is $443.90.

Medicare Part D

• Income greater than $106,000 and less than $394,000: Part D IRMAA surcharge is $78.60.
• Income greater than or equal to $394,000: Part D IRMAA surcharge is $85.80.

These surcharges are added to the standard Medicare premiums for both Part B and Part D, resulting in higher total monthly costs for Medicare beneficiaries who meet these income thresholds and file separately.

Income That Counts Towards IRMAA

IRMAA is calculated based on your Modified Adjusted Gross Income (MAGI), which includes:

• Adjusted Gross Income (AGI) plus tax-exempt interest, such as income from municipal bonds.
• Interest from U.S. savings bonds used for education.
• Excluded foreign-earned income.
• Nontaxable income from U.S. territories.

How to Avoid or Lower IRMAA Surcharges

Since IRMAA is determined by your income from two years prior, managing spikes in income is key. For example:

• Roth Conversions: Properly timing a Roth conversion can help avoid IRMAA surcharges because distributions from Roth IRAs do not count toward MAGI.
• One-Time Income Events: Avoid one-time income spikes, which could trigger a higher IRMAA bracket. This includes carefully timing the sale of assets or bonuses.

Appealing Your IRMAA

If your income has significantly changed due to a life event, you may request a redetermination with the SSA. Common events that might qualify include:

• Loss of income-producing property
• Death of a spouse
• Retirement or reduced work hours

If SSA denies your redetermination request, you can appeal through several levels, which may require legal assistance.

How to Pay Your IRMAA

You’ll receive monthly bills for IRMAA surcharges, which are paid separately for Part B and Part D:

1. Online: Use your secure Medicare account to pay online by credit or debit card, or from your checking or savings account.
2. Medicare Easy Pay: Automatically deducts your payment from your bank account each month, though setup can take up to 8 weeks.
3. Mail: Send a check, money order, or credit/debit card payment using the payment coupon included in your bill to Medicare Premium Collection Center.
4. Bank’s Bill Pay: Use your bank’s online bill pay service.

Bills are generally due on the 25th of the month, and Medicare requires timely payment to avoid past-due amounts being added to your next bill.

Notification of IRMAA Liability and Your Options

When Social Security determines that you owe an Income-Related Monthly Adjustment Amount (IRMAA) on Medicare premiums, they will send you a notice called an initial determination. This notice provides details about your IRMAA surcharge and includes instructions for requesting a new initial determination if you believe the surcharge is incorrect.

What is a New Initial Determination?

A new initial determination is a revised decision by Social Security about your IRMAA. If you experienced a life-changing event that has significantly reduced your income, you can request a new initial determination to potentially lower or remove the IRMAA surcharge. Qualifying life-changing events include:

• Loss of income-producing property
• Death of a spouse
• Divorce
• Retirement or reduction in work hours

If you can show that your income has changed due to one of these events, Social Security may adjust or waive your IRMAA.

Appeals Process if Your Request is Denied

If Social Security denies your request for a new initial determination, you have the right to appeal the decision through several levels:

1. Office of Medicare Hearings and Appeals: The first level of appeal after denial.
2. Medicare Appeals Council: If the initial appeal is unsuccessful, you can escalate to this council.
3. Federal District Court: The final level of appeal, which may require hiring an attorney for legal representation.

These appeals levels are typically used by beneficiaries challenging coverage decisions or seeking reconsideration of IRMAA surcharges due to special circumstances.

Bottom Line

The IRMAA surcharge is based on income thresholds and affects higher-income Medicare participants with a “cliff” effect — exceeding a threshold by even $1 could mean paying a higher surcharge. Consider tax strategies, like properly timing Roth conversions, to minimize this risk and reduce your premiums.

Glossary of Key Terms

1. IRMAA (Income-Related Monthly Adjustment Amount): A surcharge for higher-income Medicare participants, applied to Part B and Part D premiums.
2. Modified Adjusted Gross Income (MAGI): AGI plus certain excluded income, such as tax-exempt interest, used to calculate IRMAA eligibility.
3. Part B Premium: The monthly cost for Medicare Part B (medical insurance).
4. Part D Premium: The monthly cost for Medicare Part D (prescription drug coverage).
5. Roth Conversion: Moving funds from a traditional retirement account to a Roth IRA, which can provide tax-free withdrawals later.
6. Redetermination: A review by SSA to reevaluate IRMAA based on changes in your financial situation.
7. Cliff Effect: The sudden increase in cost when income exceeds a certain threshold, as with IRMAA brackets.