What Is IRMAA? How 2026's Medicare Surcharges Are Calculated -- and How to Fight an Unfair One

IRMAA stands for Income-Related Monthly Adjustment Amount, and is a surcharge that higher-income Medicare recipients pay on top of their Medicare Part B (medical insurance) and Part D (prescription drug coverage) premiums. If you earn above the threshold, you'll pay more for coverage than a beneficiary with a lower income.

How it's calculated

The Social Security Administration (SSA) determines whether you must pay more for your healthcare coverage based on your Modified Adjusted Gross Income (MAGI) from two years prior. For example, whether you must pay an IRMAA in 2026 is determined by your 2024 tax return.

Image source: Getty Images.

Here's how the calculation works:

• The SSA reviews your tax return from two years earlier.
• Based on your income and filing status, you're placed in a bracket.
• The SSA sends you a letter, indicating whether you must pay an IRMAA.
• The surcharge is typically deducted from your Social Security benefits.

How much your premiums could increase

Here's the total annual IRMAA cost by tier for Part B and Part D combined (per person):

Data source: Centers for Medicare and Medicaid Services.

If you or your spouse is collecting spousal benefits, the SSA will apply the IRMAA surcharge to each of your benefits if you file a joint tax return and your total MAGI exceeds the income threshold.

Life can change without notice

Here are some of ways your life might change:

• You've gotten married
• You've gotten a divorce or annulment
• Your spouse has died
• You've retired, suffered a job loss, or now work reduced hours
• You've lost income-producing property due to a disaster or other event
• You've lost pension income

How to appeal an IRMAA

Any of these events can lead to a lower income and prompt you to request a reduction in your Medicare premiums. Here's how it's done:

1. Request a new initial determination.
2. File a Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event (Form SSA-44).
3. You'll need to submit evidence of your life-changing event, such as proof of retirement or layoff, tax returns, pay stubs, pension statements, a divorce decree, or a death certificate.
4. Go through the formal appeal process.
5. If your request for a new IRMAA determination is denied, you still have options. For example:

• File a request for reconsideration and provide additional evidence.
• Request a hearing before an Administrative Law Judge (ALJ)
• File a civil lawsuit in federal district court

Note: Timing is critical. You have 60 days from the date you receive the first letter to file for reconsideration, another 60 days to request a hearing before an ALJ, and another 60 days to file a civil lawsuit. Stay on top of those deadlines to keep your appeal alive.

The Motley Fool has a disclosure policy.