Key Takeaways
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In 2025, Medicare beneficiaries with higher incomes may pay more for Parts B and D due to the Income-Related Monthly Adjustment Amount (IRMAA).
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The income threshold for IRMAA begins at $106,000 for individuals and $212,000 for married couples filing jointly, based on your 2023 tax return.
Medicare Isn’t One-Price-Fits-All Anymore
If you’re enrolled in Medicare, you might assume everyone pays the same premium. That’s not quite true. For 2025, Medicare continues to apply an income-based surcharge called the Income-Related Monthly Adjustment Amount—or IRMAA—on higher earners.
This means you could be paying more than the standard premiums for Medicare Part B (medical insurance) and Part D (prescription drug coverage), simply because your income crossed a specific threshold. This surcharge can add hundreds of dollars each month, so understanding how it works is essential.
Who Pays More: The 2025 Income Thresholds
For 2025, the IRMAA thresholds are based on your Modified Adjusted Gross Income (MAGI) from two years ago—that’s your 2023 tax return.
You will pay IRMAA if your income is:
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More than $106,000 if you file taxes as an individual
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More than $212,000 if you file jointly with a spouse
These amounts mark the beginning of the IRMAA brackets. The higher your income climbs above those limits, the more you pay in added premiums.
How IRMAA Affects Part B Premiums in 2025
The standard Medicare Part B premium in 2025 is $185 per month. But if you fall into a higher income bracket, IRMAA adds an extra charge to that amount.
There are multiple income brackets above the threshold, and each one corresponds to a specific surcharge. The Social Security Administration (SSA) uses your IRS tax return to determine your IRMAA tier.
The surcharge applies for a full year unless your income significantly changes and you request a reassessment (more on that later).
Part D Prescription Coverage Has Its Own IRMAA
Medicare Part D plans—offered through Medicare or employer-based retiree plans—also include an IRMAA surcharge for higher-income beneficiaries.
This IRMAA for Part D works similarly to Part B: it’s added to your base premium. Even though you don’t pay this surcharge to your plan directly, you’ll see it deducted from your Social Security check or receive a bill from Medicare.
If you decline to pay the surcharge, you risk losing your prescription drug coverage, even if your regular premiums are paid in full.
What Counts Toward Your Income
The IRMAA determination is based on your MAGI. Here’s what’s typically included:
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Wages and self-employment income
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Required Minimum Distributions (RMDs) from retirement accounts
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Capital gains and interest income
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Taxable Social Security benefits
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Rental income
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Dividends
Even one-time income spikes, like a large sale of stock or cashing out a retirement account, can trigger IRMAA for a full year.
When You’ll Hear From Social Security
The Social Security Administration generally sends out IRMAA determination letters in late November or December for the upcoming year. The letter explains:
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What your reported MAGI was (based on your 2023 return)
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Your IRMAA bracket for 2025
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How much your total monthly premium will be for Parts B and D
You don’t need to apply for IRMAA; it’s assessed automatically. But you can challenge the surcharge if your income situation has changed.
When You Can Request a Reconsideration
If your income has dropped since 2023 due to certain life-changing events, you can request a review of your IRMAA determination.
Qualifying events include:
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Retirement or reduced work hours
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Divorce or death of a spouse
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Loss of income-producing property
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Loss of pension income
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Settlement payments ending
To request a new assessment, file Form SSA-44 with supporting documentation. If approved, your premiums may be adjusted within a few weeks.
Timing Matters: IRMAA Looks Back Two Years
It’s important to remember that IRMAA always looks back two years. In 2025, your 2023 tax return is used. In 2026, your 2024 income will be considered.
That makes tax planning especially important. Decisions you make today—like when to take retirement distributions or sell an investment—can affect your Medicare costs two years from now.
Planning Ahead to Avoid the Surcharge
While you may not be able to change the past, you can influence your future IRMAA liability with proactive planning.
Strategies might include:
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Roth IRA conversions done gradually before retirement to reduce taxable distributions later
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Tax-efficient withdrawals from retirement accounts to stay under the IRMAA threshold
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Using a Health Savings Account (HSA) for qualified expenses instead of tapping taxable accounts
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Spreading income across multiple years rather than taking large sums at once
If you work with a financial advisor or tax planner, discuss your Medicare exposure well before age 65—and review it each year thereafter.
Medicare Advantage and IRMAA
If you’re enrolled in a Medicare Advantage plan that includes drug coverage, IRMAA still applies. Even if the plan itself seems more affordable, your income will determine whether you owe extra.
You’ll continue paying the base plan premium (if applicable), but your IRMAA surcharge will be billed separately by Medicare.
How IRMAA Is Paid
The IRMAA surcharge is usually deducted from your Social Security benefits each month. If you’re not yet receiving Social Security, Medicare will send a bill.
Make sure to keep up with these bills. If you fail to pay your IRMAA, you may lose your Medicare coverage—even if your plan premium is paid.
Appealing a Denial of Reconsideration
If Social Security denies your IRMAA reconsideration request, you have the right to appeal. The process involves:
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Filing a written appeal with the Office of Medicare Hearings and Appeals (OMHA)
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Providing documentation to support your case
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Attending a hearing, often by phone or video
The timeline for decisions can vary, but many cases are resolved within a few months.
IRMAA Isn’t Going Away
The IRMAA surcharge has been part of Medicare since 2007, and Congress continues to adjust the thresholds over time to reflect inflation. In 2025, the updated limits mark a moderate increase over 2024 levels.
It’s not a one-time issue either. As your income changes—up or down—your IRMAA bracket will be reassessed annually. Staying informed can help you minimize costs and avoid surprises.
Staying in Control of Your Medicare Costs
Understanding IRMAA is critical if you’re approaching or already enrolled in Medicare. This surcharge can significantly increase your monthly healthcare costs—and it’s often triggered by income sources you didn’t think would matter.
Each fall, when Social Security mails your premium letter, take the time to read it carefully. If you believe your income situation has changed, act quickly. Filing for a reconsideration or appeal within the right timeframe could save you money for the entire year.
If you’re unsure where your income stands or how future decisions could affect your Medicare premiums, get in touch with a licensed agent listed on this website. They can help you evaluate your current position and discuss ways to reduce future costs.
