Most people will experience a huge decrease in monthly premiums when signing up for Medicare. Having large IRMAA charges can make a huge difference in whether you are spending a little or a lot each month on Medicare. Whether you sign up for a Medicare Supplement plan or an Advantage plan, high income earners are going to be stuck paying for your additional IRMAA charges.
What is IRMAA? Does IRMAA mean I pay more for Medicare?
IRMAA stands for Income-Related Monthly Adjustment Amount. IRMAA is a surcharge in monthly premiums for people with an income above a certain amount. Basically, if you are still employed and making a lot of money, you’ll be paying more for Medicare. IRMAA amounts show in the form of Medicare Part B and Part D additional premiums. The Social Security Administration determines whether you pay IRMAA based on the Modified Adjusted Gross Income you’ve reported for the prior 2 years.
What is the Income Threshold for IRMAA in 2025?
You will only pay an additional IRMAA surcharge if you are making a certain amount of money. This amount changes every year. For 2025, if an individual is making more than $106,000, they have hit the first IRMAA threshold. For couples filing taxes jointly, the threshold is increased to $212,000 for 2025.
2025 Part B IRMAA Brackets:
Both Part B and Part D have IRMAA charges. You’ll see the income threshold has not changed.
2025 Part D IRMAA Brackets:
How can I avoid IRMAA Charges?
If you are enrolling in Medicare, IRMAA charges are going to be unavoidable until your past 2 years of Modified Adjusted Gross Income has lowered.
Option 1 – Make less money or retire
- Pretty simple, if you make less money, you’ll avoid IRMAA. After retiring, you’ll see your Medicare monthly premium reduce to the base monthly premium. Your IRMAA doesn’t go away immediately when you retire. You need to continue reporting your income during tax season and your IRMAA will go down accordingly.
Option 2 – Sign up for your company’s health insurance
- If you are working for a large company with over 100 employees, this actually may be a great option. This company’s health insurance is a qualified plan that let’s you delay enrolling in Medicare. Furthermore, large companies have “composite based premiums” for health insurance. You pay the same price as someone who is very young. This is the best way to avoid paying IRMAA and still getting great insurance.
- If you work for a company with less than 100 employees, this is not a good option. These plans have age based premiums which will be more expensive than your IRMAA charges.
- If you work for a company with less than 20 employees, this idea is getting worse and worse. Those eligible for Medicare but enrolled in a company plan can receive late enrollment penalties if the company has less than 20 employees.
Can I avoid IRMAA by signing up for an Advantage plan?
No! You’ll still have to pay for IRMAA when signing up for an Advantage plan. Your Advantage plan will include Drug coverage, so you’ll have to pay the Part D IRMAA charges as well. There is no avoiding the IRMAA charges whether you sign up for an Advantage plan or a Supplement plan.
Keaton Marks is the owner and CEO at HealthyMarks including the medicare team. Keaton was born and raised in Encinitas. He often rode his bike through town and to the local beaches like Moonlight. Keaton knows it is important to have a local resource, someone who understands the area, the hospitals and networks of doctors. Keaton is proud to be a local Medicare broker who is able to assist the people in his town when selecting medicare plans.
Keaton believes one thing above all else: “Medicare is confusing… but it doesn’t have to be! That is where HealthyMarks Medicare comes in” Please contact me with any questions.