What Is IRMAA and How Does It Affect Your Medicare Costs?

IRMAA can add hundreds to your Medicare bill each month. Learn what triggers it, who pays it, and what Arizona seniors can do about it in 2026.

Author: Lynsey Brennan, Licensed Medicare Advisor | Published July 09, 2026 Reading time: 7 min read

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Quick Answer

IRMAA — the Income-Related Monthly Adjustment Amount — is a surcharge added to your Medicare Part B and Part D premiums if your income from two years ago exceeded a certain threshold. It is determined by the Social Security Administration using your IRS tax data, and it affects a meaningful share of Medicare enrollees each year. If your income has dropped since then, you may be able to appeal it.

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Key Takeaways

• IRMAA is added on top of the standard 2026 Part B premium of $185/month, potentially pushing your monthly cost significantly higher (CMS, November 2025).
• SSA looks at your income from two years prior — so your 2026 IRMAA is based on 2024 tax returns.
• Part D plans also carry an IRMAA surcharge, paid separately to Medicare — not to your plan.
• A qualifying life event such as retirement or divorce may allow you to request a lower IRMAA using a more recent year's income.
• Arizona Medicare enrollees should factor IRMAA into their annual Medicare plan review Arizona every fall during Open Enrollment.

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Table of Contents

• What IRMAA Is — and Where It Comes From
• The 2026 IRMAA Brackets and What You Could Pay
• How IRMAA Affects Part D Drug Coverage
• What Arizona Seniors Should Know About IRMAA
• How to Appeal IRMAA After a Life Change
• IRMAA and Your Plan Choice: Medicare Advantage vs. Supplement
• Frequently Asked Questions

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What IRMAA Is — and Where It Comes From {#what-irmaa-is}

Most people know about the standard Part B premium. In 2026, that number is $185 per month (CMS, November 2025). What many don't know is that roughly 1 in 7 Medicare enrollees pays more than that — sometimes a lot more — because of IRMAA.

IRMAA stands for Income-Related Monthly Adjustment Amount. Congress created it as part of the Medicare Modernization Act of 2003, and it has been in place since 2007. The idea is straightforward: higher-income beneficiaries pay a larger share of Medicare's costs.

The Social Security Administration calculates your IRMAA each year using your Modified Adjusted Gross Income (MAGI) from two years prior. For 2026, that means your 2024 federal tax return. MAGI includes wages, self-employment income, Social Security benefits, required minimum distributions (RMDs), capital gains, and tax-exempt interest — basically most income sources.

If SSA determines you owe IRMAA, they send you a letter called an IRMAA Determination Notice. The surcharge is then added directly to your Medicare Part B premium.

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The 2026 IRMAA Brackets and What You Could Pay {#the-2026-irmaa-brackets}

CMS and SSA adjust IRMAA thresholds annually. The exact 2026 bracket amounts are published by SSA, and the specific dollar figures for each tier should be verified at SSA.gov or confirmed with a licensed Medicare advisor — because they shift year to year and vary by filing status.

Here is how the structure works:

• Standard (no IRMAA): Individuals filing with MAGI up to a set threshold pay only the $185/month base premium.
• Tier 1 through Tier 5: As your 2024 MAGI increases, your monthly Part B premium increases in steps. At the highest income tier, enrollees can pay well over $600/month for Part B alone (per SSA 2026 IRMAA schedule — confirm current figures at SSA.gov).
• Married filing separately carries its own brackets, which are much less favorable than those for joint filers.

One thing that catches people off guard: IRMAA is a per-person surcharge. If you and your spouse are both on Medicare and both exceed the income threshold, you each pay the surcharge.

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How IRMAA Affects Part D Drug Coverage {#how-irmaa-affects-part-d}

IRMAA doesn't just hit Part B. It also applies to Part D prescription drug coverage, and the mechanics are a little different.

Your Part D IRMAA surcharge is paid directly to Medicare — not to your drug plan. That means it shows up as a separate deduction from your Social Security check (or a separate bill from Medicare) on top of whatever premium your Part D plan charges.

The good news: starting in 2025, the Inflation Reduction Act capped out-of-pocket drug costs at $2,000 per year under Medicare Part D. Insulin covered under Part D is capped at $35/month. Those caps apply regardless of whether you pay IRMAA. You can learn more about how drug costs work in our Part D drug coverage guide.

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What Arizona Seniors Should Know About IRMAA {#arizona-angle}

Arizona has a large and growing Medicare population, particularly in metro areas like Phoenix, Scottsdale, Tucson, and Sun City. Many Arizona retirees have retirement savings, pensions, rental income, or investment portfolios that can push MAGI above the IRMAA threshold — sometimes unexpectedly.

A common trigger in Arizona: Roth conversions. Some retirees do a large Roth IRA conversion in a single tax year to reduce future RMDs. That conversion counts as ordinary income and can spike MAGI for that year — which means an IRMAA surcharge two years later.

Another Arizona-specific issue: the two-year lookback during a move. If you recently retired or relocated from a higher-earning work year, your prior income may not reflect your current situation at all. That's worth addressing directly.

If you're doing any Medicare plan review in Arizona, ask your advisor to walk through your income picture before finalizing your plan choices. Knowing whether you'll owe IRMAA — and how much — affects how you compare costs across options. See our 2026 Medicare costs page for a full breakdown of premiums, deductibles, and surcharges.

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How to Appeal IRMAA After a Life Change {#how-to-appeal-irmaa}

If your income has dropped significantly since your 2024 tax return — because of retirement, divorce, death of a spouse, loss of income-producing property, or certain other events — you can ask SSA to recalculate your IRMAA using a more recent year.

This is called a Life Changing Event (LCE) appeal, and you file it using Form SSA-44. SSA recognizes eight qualifying life events, including:

• Marriage or divorce
• Death of a spouse
• Work stoppage or reduction (including retirement)
• Loss of income-producing property (through disaster or other involuntary means)
• Reduction in or loss of pension income

If your appeal is approved, SSA can use your estimated current-year income instead of the two-year-old figure. There's no guarantee of a specific outcome, but many people who experience a true income drop do successfully reduce or eliminate their IRMAA surcharge through this process.

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IRMAA and Your Plan Choice: Medicare Advantage vs. Supplement {#irmaa-and-plan-choice}

Here's something that often gets missed: IRMAA applies no matter which type of Medicare plan you're on. Whether you're enrolled in a Medicare Advantage plan, a Medicare Supplement (Medigap) plan, or Original Medicare alone, the Part B IRMAA surcharge still applies.

That said, IRMAA does affect the value calculation differently depending on your plan:

• Medicare Advantage plans in Arizona often have $0 or low monthly premiums, but you still pay your full Part B premium — including IRMAA. The 2026 Medicare Advantage out-of-pocket maximum is capped at $9,350 for in-network services (CMS, 2025).
• Medigap plans have their own monthly premiums on top of Part B. For someone already paying elevated Part B costs due to IRMAA, that combined monthly cost can be substantial.

There's no single right answer — it depends on your health, income, and how you use care. Our Medicare Advantage vs. Supplement comparison lays out the trade-offs honestly. You can also use our plan comparison tool to look at specific options side by side.

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Frequently Asked Questions {#frequently-asked-questions}

Q: Does everyone on Medicare pay IRMAA? A: No. IRMAA only applies if your Modified Adjusted Gross Income from two years prior exceeded the threshold set by SSA for your filing status. Most Medicare enrollees pay only the standard Part B premium of $185/month (CMS, November 2025), but those with higher incomes pay more.

Q: If I retire this year and my income drops, will my IRMAA go down right away? A: Not automatically. SSA uses your 2024 income for 2026 IRMAA, so a drop in current income won't change your surcharge unless you file a Life Changing Event appeal using Form SSA-44. If approved, SSA may use a more recent income estimate instead.

Q: Does IRMAA apply to Medicare Advantage plans? A: Yes. If you owe IRMAA, you pay it regardless of whether you're on Medicare Advantage, a Medigap plan, or Original Medicare. It's a surcharge on your Part B — and potentially Part D — coverage, not on any private plan.

Q: Can a Medicare advisor help me understand my IRMAA situation? A: A licensed Medicare advisor can explain how IRMAA affects your total monthly costs and help you factor it into your plan comparisons. They cannot change your IRMAA — that's SSA's determination — but they can make sure your plan choice reflects your true out-of-pocket picture.

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The Bottom Line

IRMAA is one of those Medicare costs that sneaks up on people — especially those who had a strong income year, did a large Roth conversion, or haven't reviewed their Medicare situation since they first enrolled. If you're an Arizona Medicare enrollee and you're not sure whether IRMAA applies to you, or you want to make sure your current plan still makes sense given your costs, the best step is a straightforward plan review. Schedule your free Medicare review at HealthPlan Connect and we'll walk through your actual numbers — no pressure, no guesswork.

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Sources

• CMS Medicare & You 2026 Handbook, CMS, November 2025
• 2026 Part B Premium and Deductible Announcement, CMS, November 2025
• SSA IRMAA Determination and Form SSA-44, Social Security Administration
• Inflation Reduction Act — Part D Out-of-Pocket Cap, U.S. Congress, 2022 (effective 2025)
• CMS Medicare Monthly Enrollment Data, 2024
• CMS Medicare Advantage Out-of-Pocket Maximum, CMS, 2025
• Medicare Modernization Act of 2003, U.S. Congress

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This article is for educational purposes and is not affiliated with or endorsed by the federal Medicare program or any government agency. HealthPlan Connect is a private, licensed Medicare advisory service. FL License #G007269.