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Press Release updated: Dec 16, 2020 09:00 EST

If you’re a high earner who’s either enrolling in Medicare for the first time or navigating its costs for 2021, you might have heard of the Income-Related Monthly Adjustment Amount, better known as IRMAA.

IRMAA is an additional fee that high-earning seniors have on top of their Medicare premiums. Here, we’ll break down how the IRMAA works and how it can impact your Medicare costs.

What is an IRMAA and when do you pay it?

An IRMAA is a surcharge on Medicare Part B and D premiums for high earners. Your IRMAA is calculated based on your tax filings from two years ago, however, if your situation has changed due to a life event between that tax filing and the upcoming year, you may be able to appeal your IRMAA.

If your IRMAA is accurate, your Part B IRMAA will be automatically calculated into your premium.

Part D, which is a prescription drug plan, has an additional IRMAA. However, Medicare Part D is optional, and if you choose not to purchase a prescription drug plan you don’t have to pay that associated IRMAA. If you do choose Part D coverage, the IRMAA will be in addition to the plan’s premium.

How does an IRMAA work with Medicare Advantage?

Medicare Advantage plans replace Original Medicare coverage with the same level of coverage through a private insurer, as well as different options for additional coverage.

Depending on the Medicare Advantage plan you choose, it may have an additional premium on top of your Part B premium, however, it won’t come with its own IRMAA. That doesn’t mean your regular Part B IRMAA will change — it stays the same amount as originally determined.

If you have a Medicare Advantage Prescription Drug plan, known as a MAPD plan, you will be paying your Part D IRMAA on that as it replaces Part D prescription coverage. If you opt out of both a MAPD and Part D coverage, you won’t be paying that IRMAA.

How much will an IRMAA add to my costs?

If you’re going to be paying Medicare premiums for the first time, it’s important to realize that a small change in your income bracket can have a large impact on your IRMAA. Keep the IRMAA in mind when it comes to how to manage your funds throughout your retirement.

It’s also good to be aware that both the IRMAA and the income brackets are adjusted for inflation annually. Some people who were near the bottom of a higher IRMAA bracket for 2020 may find their IRMAA reduced this year due to these changes.

Yearly Income in 2019: Individual

Yearly Income in 2019: Married Filing Jointly

Yearly Income in 2019: Married Filing Separately

Part B Premium


≤ $88,000

≤ $176,000

≤ $88,000



$88,000 – $111,000

$176,000 – $222,000




$111,000 – $138,000

$222,000 – $276,000




$138,000 – $165,000

$276,000 – $330,000




$165,000 – $500,000

$330,000 – $750,000

$87,001 – $412,000



≥ $500,000

≥ $750,000

≥ $412,000



Source: iQuanti, Inc.