Medicare is not one flat price for everyone. The higher your income, the more you pay for Parts B and D.

That extra charge is called the income-related monthly adjustment amount, or IRMAA. It is a surcharge added on top of your regular Medicare premiums once your income passes a set threshold. According to the Centers for Medicare & Medicaid Services, IRMAA affects roughly 8% of people with Medicare Part B [1]. If you are a higher earner — or had one big income year near retirement — you are likely to be one of them.

Here is the part that catches people off guard: the surcharge is not based on what you make today. It is based on your tax return from two years ago.

What exactly is IRMAA?

When Medicare set the standard Part B premium at $202.90 for 2026, that figure assumed the government pays about 75% of the real cost of your coverage. Most beneficiaries pay only that 25% share.

IRMAA changes the math for high earners. Since 2007, anyone above an income threshold has paid a larger slice of the true cost — first on Part B, and since 2011 on Part D as well. The surcharge is added to your premium every month for the entire year.

It is important to know that IRMAA is italicnotitalic a tax deduction or a one-time fee. It is a recurring monthly increase, and for the top earners it more than triples the standard Part B bill.

The 2026 Part B IRMAA brackets

Your premium depends on your modified adjusted gross income (MAGI) — your adjusted gross income plus any tax-exempt interest. Here is what full Part B coverage costs at each 2026 income level, based on the official CMS table:

  • MAGI up to $109,000 (single) or $218,000 (joint): no surcharge — you pay the standard $202.90.
  • $109,001 to $137,000 (single) / $218,001 to $274,000 (joint): +$81.20, for a total of $284.10.
  • $137,001 to $171,000 (single) / $274,001 to $342,000 (joint): +$202.90, for a total of $405.80.
  • $171,001 to $205,000 (single) / $342,001 to $410,000 (joint): +$324.60, for a total of $527.50.
  • $205,001 to $499,999 (single) / $410,001 to $749,999 (joint): +$446.30, for a total of $649.20.
  • $500,000 or more (single) / $750,000 or more (joint): +$487.00, for a total of $689.90.

So a single filer with a 2024 MAGI of $510,000 pays $689.90 a month for Part B in 2026 — about $487 more than the standard premium, or roughly $5,844 in extra cost over the year. For a married couple who both crossed the top threshold, the surcharge applies to each spouse separately.

Part D has its own surcharge

The same income brackets trigger a second charge on Part D prescription drug coverage. This one is added on top of whatever your drug plan already charges.

The 2026 Part D IRMAA amounts climb in the same six steps: $0, then $14.50, $37.50, $60.40, $83.30, and $91.00 a month at the highest income level. CMS says roughly 8% of Part D enrollees pay it. Unlike the plan premium, the Part D surcharge is collected by Medicare directly — usually deducted from your Social Security check or billed to you if you are not yet receiving benefits.

Stack the top tiers together and a high earner can pay more than $780 a month in Part B premium and Part D surcharge combined — before the cost of the drug plan itself.

Why your 2024 tax return decides your 2026 premium

This is the rule that surprises new retirees the most. Medicare uses the most recent tax return the IRS has on file, which is generally from two years earlier. Your 2026 IRMAA is based on the income you reported for 2024.

That two-year lookback creates a trap. Say you sold a rental property, took a large capital gain, or did a big retirement-account withdrawal in 2024. Even if your income has since dropped to a normal level, the surcharge follows you into 2026. The good news: it is recalculated every year, so a one-time spike usually only raises your premium for a single year.

The “cliff” problem: one dollar can cost you thousands

IRMAA does not phase in gradually. It is a cliff. Cross a threshold by a single dollar and you owe the full surcharge for that entire bracket.

Consider a married couple with a 2024 MAGI of $274,000 — right at the edge of the second Part B tier. One extra dollar of income pushes them into the next bracket, raising each spouse’s Part B premium from $284.10 to $405.80. That is an extra $121.70 per person per month, or nearly $2,921 a year for the couple, triggered by one dollar.

This is why income planning near a bracket edge matters so much in the years right before and during retirement.

How to lower or appeal your IRMAA

You are not powerless against the surcharge. A few moves can help:

  • Appeal a life-changing event. If your income dropped because you retired, lost a job, got divorced, or were widowed, you can ask Medicare to use more recent income by filing Form SSA-44. Marriage, the death of a spouse, and the loss of a pension also qualify.
  • Manage your MAGI before the lookback year. Because IRMAA tracks income from two years back, planning ahead is everything. Roth accounts can help: qualified withdrawals from a Roth IRA do not count toward MAGI, so building Roth savings before you turn 65 can keep future income under a threshold.
  • Watch one-time income. Spreading a large capital gain, a Roth conversion, or a property sale across more than one tax year can keep you below the next cliff.
  • Check the math. Medicare sends a notice if you owe IRMAA. If the income it used looks wrong or out of date, you can request a new determination.

For most retirees, IRMAA never applies — about 92% of beneficiaries pay the standard premium. But for higher earners, it is one of the most expensive and least understood costs in Medicare. Before you trigger a big income event in the two years around retirement, run the numbers against these brackets. A little timing can save you thousands.