Medicare Surcharges, also known as Income-Related Monthly Adjustment Amounts (IRMAA), are additional fees that some Medicare beneficiaries are required to pay based on their income. IRMAA is calculated using Modified Adjusted Gross Income (MAGI) and is applied to both Medicare Part B and Part D premiums.
In 2023, the standard Part B premium is $164.90, but IRMAA can increase this amount by as much as $395.60. Similarly, the standard Part D premium is $76.40, but IRMAA can increase this by as much as $76.40.
IRMAA for Singles:
- If your MAGI is between $88,000 and $111,000, you will be required to pay an additional $148.50 per month for your Part B premium.
- If your MAGI is between $111,000 and $138,000, you will be required to pay an additional $207.90 per month for your Part B premium.
- If your MAGI is over $138,000, you will be required to pay an additional $267.30 per month for your Part B premium.
- The IRMAA for Part D premiums are calculated similarly, with different income thresholds and surcharge amounts.
IRMAA for Couples:
- If your MAGI is between $176,000 and $222,000, you will be required to pay an additional $148.50 per month for your Part B premium.
- If your MAGI is between $222,000 and $276,000, you will be required to pay an additional $207.90 per month for your Part B premium.
- If your MAGI is over $276,000, you will be required to pay an additional $267.30 per month for your Part B premium.
- The IRMAA for Part D premiums are calculated similarly, with different income thresholds and surcharge amounts.
Example of how IRMAA is calculated:
- For example, if you are a single person with a MAGI of $100,000, you would be required to pay an additional $148.50 per month for your Part B premium, in addition to the standard $164.90.
- If you are a couple with a MAGI of $250,000, you would be required to pay an additional $267.30 per month for your Part B premium, in addition to the standard $164.90.
Ways to Avoid IRMAA:
- One way to avoid IRMAA is to lower your MAGI by taking advantage of tax deductions and credits.
- Another way is to plan your income during your retirement years.
- Lastly, if you are still working, you may also consider postponing your Social Security benefits until a later age, which can also lower your MAGI.
In summary, IRMAA is a surcharge that can be added to your Medicare Part B and Part D premiums based on your income. The surcharge is calculated using MAGI, and the amount can vary depending on whether you are single or a couple, and your income level. To avoid IRMAA, you can take advantage of tax deductions and credits, plan your income during your retirement years, or consider postponing Social Security benefits.
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