Income Related Monthly Adjustment Amount (IMRAA) Overview

By Nicole Young on December 19, 2022

Medicare beneficiaries will benefit from lower Medicare Part B and Part D premiums in 2023. This is the first time in 10 years that the standard Medicare premium has been reduced from the previous year! However, throughout the month of December certain Medicare beneficiaries who are enrolled in Medicare Part B and/or Part D will be receiving Income Related Monthly Adjustment Amount (IRMAA) Determination Notices from the Social Security Administration explaining that they will have to pay an additional surcharge above the standard Medicare premium for Parts B and/or Part D in 2023.

Who will receive IRMAA Determination Notice?

Medicare beneficiaries whose modified adjust gross income (MAGI) are above the standard premium threshold can expect an IRMAA Determination Notice (See graph for thresholds). The Social Security Administration (SSA) determines if you owe IRMAA based on your MAGI reported on your tax return two years prior. For 2023, SSA would use the MAGI reported on your 2021 tax return to determine your IRMAA surcharge in 2023(if applicable). You may calculate your MAGI by adding your Total Adjusted Gross Income to your Tax-Exempt Interest (MAGI = Total Adjusted Gross Income + Tax-Exempt Interest).

What can you do about IRMAA Surcharges?

To have IMRAA surcharges reduced one must qualify for a life changing event and file form SSA-44 with the Social Security Administration. The list of qualifying events includes:

Marriage/ Divorce
Widowing
Work Stoppage (retired or laid off)
Work Reduction
Loss of income producing property
Loss of pension
Income for the year that was due to settlement with an employer of the employer’s closure, bankruptcy, or reorganization

What does Not Qualify as a Life Changing Event

Incurring significant capital gains, ROTH conversions or IRA distributions in a single tax year.

Having a qualified life changing event could save a married couple paying IRMAA surcharges thousands of dollars in Medicare premiums.

Who needs to know about this?

New retirees over age 65 who start Medicare immediately after retirement or high-income beneficiaries paying IRMAA surcharges who experience a qualifying life changing event.

How can Private Vista help you with this issue?

If you need help determining whether this may apply to you, please contact your advisor. Private Vista advisors can create a plan to minimize IRMAA Medicare premium surcharges. For additional information visit your myssa.gov account.

_{Source: Social Security Administration as of 12/5/2022}

_{Source: https://www.medicare.gov/basics/costs/medicare-costs}

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