For updated information on 2021 Medicare IRMAA costs, visit our updated article. For 2020 information, continue reading below.
It’s not uncommon for Medicare premiums to increase every year. But for some higher-earning Medicare Part B and Part D beneficiaries, a 2020 change to Medicare Income-Related Monthly Adjust Amounts (IRMAA) could result in savings on their Part B and/or Part D premiums.
Starting in 2020, the surcharge that is tacked onto Part B and Part D premiums for higher income earners is indexed to the Bureau of Labor Statistics' Consumer Price Index for Urban Consumers (CPI-U). IRMAA brackets weren't previously indexed in this way.
The change is anticipated to reduce the number of beneficiaries who are subject to this extra charge for 2020 Medicare premiums.
Most Medicare beneficiaries pay the standard Part B premium. Beneficiaries who have a Part D plan typically pay a monthly premium for their drug coverage.
But beneficiaries with higher reported incomes may pay an additional fee on top of their Part B and/or Part D premium. This is known as the Income-Related Monthly Adjusted Amount, or IRMAA.
The income that makes a beneficiary subject to the IRMAA is based on the modified adjusted gross income reported on their taxes from two years prior.
For example, beneficiaries who pay the IRMAA added to their Medicare premiums in 2020 are doing so based on the income they reported on their 2018 tax returns.
The chart below shows how IRMAA amounts for Medicare Part B and Part D premiums in 2020.
2018 Individual tax return | 2018 Joint tax return | 2018 Married and separate tax return | 2020 Part B premium | 2020 Part D premium |
---|---|---|---|---|
$87,000 or less |
$174,000 or less |
$87,000 or less |
$144.60 |
Your plan premium |
More than $87,000 and up to $109,000 |
More than $174,000 and up to $218,000 |
N/A |
$202.40 |
You plan premium + $12.20 |
More than $109,000 up to $136,000 |
More than $218,000 up to $272,000 |
N/A |
$289.20 |
Your plan premium + $31.50 |
More than $136,000 up to $163,000 |
More than $272,000 up to $326,000 |
N/A |
$376.00 |
Your plan premium + $50.70 |
More than $163,000 up to $500,000 |
More than $326,000 up to $750,000 |
More than $87,000 up to $413,000 |
$462.70 |
Your plan premium + $70.00 |
More than $500,000 |
More than $750,000 |
More than $413,000 |
$491.60 |
Your plan premium + $76.40 |
The chart below shows the expected IRMAA income brackets for 2020 Medicare Part B and Part D premiums.
2020 (based on 2018 individual tax return) | 2020 (based on 2018 joint tax return) |
---|---|
$86,000 or less |
$172,000 or less |
More than $86,000 and up to $109,000 |
More than $172,000 and up to $218,000 |
More than $109,000 up to $136,000 |
More than $218,000 and up to $272,000 |
More than $136,000 up to $163,000 |
More than $272,000 and up to $326,000 |
More than $163,000 up to $500,000 |
More than $326,000 up to $750,000 |
More $500,000 |
More than $750,000 |
This will mark the first time in a decade that the tax has been indexed to inflation.
As you can see by comparing the 2019 and 2020 charts above, indexing IRMAA’s income brackets according to the CPI-U will increase the minimum income amount for each bracket.
What kind of effect will that have on beneficiaries and the Medicare program itself?
Call to speak with a licensed insurance agent today. An agent can help you compare Medicare Advantage (Part C) plans that are available where you live.
Medicare Advantage plans replace Medicare Part A and Part B and combine their benefits into one plan. Many Medicare Advantage plans also include prescription drug coverage.
Learn more about Medicare Advantage plans in your area and find a plan that fits your coverage needs and your budget.
Find Medicare Advantage plans in your area
Compare PlansOr call TTY Users: 711 to speak with a licensed insurance agent. We accept calls 24/7!
Compare your Medigap plan options by visiting MedicareSupplement.com
Visit site