Medicare premiums are critical components of healthcare costs for many retirees in the United States. These premiums vary depending on factors such as income, marital status, and the type of Medicare coverage one has. Understanding how Medicare premiums are calculated based on income can help individuals better prepare for retirement healthcare expenses.
Medicare Part B premiums are typically set at a standard rate for most beneficiaries. However, for individuals with higher incomes, an income-related monthly adjustment amount (IRMAA) may apply. IRMAA is an additional amount added to the standard premium based on modified adjusted gross income (MAGI), which is essentially adjusted gross income plus tax-exempt interest.
The income thresholds determining IRMAA for Medicare Part B are as follows for individuals filing taxes in 2022:
$91,000 to $114,000 for individuals
$182,000 to $228,000 for married couples filing jointly
For those falling within these income brackets, IRMAA ranges from $59.40 to $356.40 per month, in addition to the standard Medicare Part B premium. Higher-income individuals, defined as those with MAGI above $500,000 for individuals or $750,000 for married couples filing jointly, face even higher IRMAA premiums.
Similarly, Medicare Part D premiums may also be subject to IRMAA for individuals with higher incomes. The income thresholds for IRMAA on Medicare Part D premiums are as follows for individuals filing taxes in 2022
$91,000 to $114,000 for individuals
$182,000 to $228,000 for married couples filing jointly
The additional amount for IRMAA on Medicare Part D premiums ranges from $12.40 to $77.90 per month.
It’s essential for Medicare beneficiaries to understand how their income affects their premiums and plan accordingly. Various factors, including changes in income or marital status, can impact Medicare premiums from year to year. Additionally, individuals who experience certain life-changing events, such as retirement or the death of a spouse, may be eligible for a review of their IRMAA determination
Source: https://www.uhc.com/news-articles/medicare-articles/are-medicare-premiums-based-on-income
