How to Reduce Your Medicare Part B Premium: IRMAA Appeals and Income Strategies
High-income Medicare beneficiaries pay significantly more for Part B and Part D. Here is how IRMAA surcharges work, how to appeal them after a life-changing event, and income strategies to reduce future premiums.
How to Reduce Your Medicare Part B Premium: IRMAA Appeals and Income Strategies
Most Medicare beneficiaries pay the standard Part B premium ($135.50/month in 2019). But if your income exceeds certain thresholds, you pay an Income-Related Monthly Adjustment Amount (IRMAA) -- a surcharge that can more than triple your premium.
Understanding IRMAA -- and strategies to reduce it -- can save you thousands of dollars annually.
How IRMAA Works
Medicare uses your tax return from 2 years ago to determine your IRMAA. For 2019 premiums, Medicare uses your 2017 Modified Adjusted Gross Income (MAGI).
2019 IRMAA thresholds (individual filers):
| 2017 MAGI | Monthly Part B Premium | Monthly Part D Surcharge |
|---|---|---|
| ≤ $85,000 | $135.50 (standard) | $0 |
| $85,001-$107,000 | $189.60 | $12.40 |
| $107,001-$133,500 | $270.90 | $32.10 |
| $133,501-$160,000 | $352.20 | $51.80 |
| $160,001-$500,000 | $433.40 | $71.50 |
| > $500,000 | $460.50 | $77.40 |
Married filing jointly thresholds are approximately double the individual thresholds.
When IRMAA Creates a Surprise
IRMAA surprises often occur when:
- You sold a business, property, or investments in a high-income year
- You took a large IRA distribution or Roth conversion
- You received a large bonus or severance package
- You had a one-time capital gain
The 2-year lookback means a high-income year in 2017 affects your 2019 premiums -- even if your income has since dropped significantly.
Appealing IRMAA After a Life-Changing Event
If your income has decreased significantly since the tax year Medicare is using, you can appeal your IRMAA determination using Form SSA-44.
Qualifying life-changing events:
- Marriage
- Divorce or annulment
- Death of a spouse
- Work stoppage (retirement)
- Work reduction (reduced hours)
- Loss of income-producing property (due to disaster or other event beyond your control)
- Loss of pension income
- Employer settlement payment
How to appeal:
- Complete Form SSA-44 (available at ssa.gov)
- Provide documentation of the life-changing event and your current/expected income
- Submit to your local Social Security office
If approved, Medicare will recalculate your premium based on your more recent income.
Income Strategies to Reduce Future IRMAA
Since IRMAA is based on income from 2 years ago, proactive income planning can reduce future premiums.
Roth conversion timing: Large Roth conversions increase MAGI and can trigger or increase IRMAA. Spread conversions over multiple years to stay below IRMAA thresholds.
Capital gains management: Timing the realization of capital gains can help manage MAGI. Consider harvesting gains in lower-income years.
Qualified Charitable Distributions (QCDs): If you're 70½ or older, QCDs allow you to donate up to $100,000 directly from your IRA to charity. QCDs satisfy your RMD but are excluded from MAGI -- reducing your IRMAA exposure.
Health Savings Account (HSA) contributions: If you're still working and have an HSA-eligible health plan, HSA contributions reduce MAGI.
Municipal bond interest: Interest from municipal bonds is excluded from federal MAGI -- unlike interest from taxable bonds.
IRMAA and Medicare Advantage
IRMAA applies to Part B and Part D regardless of whether you have Original Medicare or Medicare Advantage. If you have an MA plan, you still pay the Part B premium (including any IRMAA surcharge) plus any MA plan premium.
This article is for educational purposes only and does not constitute financial or legal advice. Consult a financial advisor for personalized guidance.
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About the Author
William Gray
Independent Medicare BrokerUS Air Force Veteran · Florida Medicare Specialist
William Gray is an independent Medicare insurance broker based in Daytona Beach and Palm Coast, FL. A US Air Force veteran (A-10 crew chief, Germany), he spent years in corporate insurance before going independent to serve Florida seniors directly. He has helped more than 1,000 clients across Northeast Florida compare Medicare Advantage, Medigap, and Part D plans — always at no cost to the client.