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The projected IRMAA premiums for 2026 start at $109,000 for a single person and $218,000 for married filing jointly.
The median household income in the US is about $83,730 (2024). And many workers pay far more for health insurance than any Medicare premium.
The median household income for those age 65 and older is around $56,680 with significant variations by race and ethnicity- several much lower – roughly a quarter of the IRMAA threshold.
And yet, many people still seem to think IRMAA income based premiums are unfair and take a variety of measures to avoid them. To be honest I think that is unfair.
The fact our income allows us to be in the IRMAA category is a blessing. I see it in the same way I see carrying any type of insurance and never using it. Be grateful
I wish more than anything we didn’t have to use Medicare – and our combined total coverage premiums are over $2,000 a month – before 2026 increases.
The issue with Aunt IRMAA is that once you hit a certain dollar amount one finds oneself kicked up into the the next much higher payment level. For example, our income was $12 above the next payment level for IRMAA triggering an additional $140 per month. If the Aunt IRMAA increase were similar to marginal tax bracket increases it would seem fair (to me). Now, I see we are nearing the next higher IRMAA level. It would be frustrating to earn a few extra dollars in income but need to pay hundreds more per year as a result.
I knew Mr Quinn wrote this before I even opened it to read!!
Yes, RDQ, IRMAA is fair — and I try to remind myself of this with each payment. Another way to make the payment easier is to imagine the cost of private insurance. Even top tier IRMAA, with Medigap and Part D thrown in, is less expensive than the COBRA coverage I purchased prior to Medicare. Plus, a tiny perk: until one collects Social Security, payments can be made by credit card to earn cash back points.
As for managing cliffs, I’ve generally found that maxing out investment returns and tax efficiency is more cost effective than worrying about IRMAA. But then, I don’t do Roth conversions.
Sadly, we don’t earn enough to pay the surcharge😞. I do agree with the complaints about the cliff. There are many cliffs in the tax code as well. As a tax preparer, I hated explaining to clients that they made $1 too much.
I have paid IRMAA premiums several times doing Roth conversions. Now that I am a widower, I will be paying IRMAA premiums every year despite doing all of those Roth conversions. My pension and SS alone make it impossible to avoid IRMAA premiums.
As others stated, I should be thankful (and I am) that I have this problem. It would have been much worse had the 2017 tax bill not been extended.
Good perspective! We have only had to deal with IRMAA 1 year out of the 3 applicable years while on Medicare, so that’s a good thing. However, the “cliff” approach is what got us (wife’s transfer of IRA $ to savings account and thus, “income”), and I wish that could be replaced by a sliding scale, even at the risk of making our tax code and calculations even more complicated.
All in all, I believe in looking at IRMAA as the reduction of a subsidy rather than as a tax, and I’m glad to be in a financial situation where we need to pay attention to income, tax brackets, and such.
Per AI if you paid the IRMAA surcharge in 2024 you are in the top 8% of income of all Medicare participants. Count your blessings.
BTW my wife and I barely ever exceeded the minimum income for the IRMAA surcharge for a single recipient when we both were working.
why is everything so complicated?
IRMAA might be more palatable if it didn’t have cliffs.
We are very fortunate to have Part B premium and IRMAA reimbursement through my wife’s retirement plan.
Must be a college or state plan.
My wife was a professor at one of the City of New York (CUNY) colleges. Our Part B and MA (Aetna PPO ESA) are paid for by the NYC Health Benefits Program and Part D (CVS Caremark) is paid for by the union that represents CUNY employees. Her 403(b) RMD is also exempt from NY state taxes.
In other words you are saying that the NYS taxpayer is paying for your retirement health care. Is that fair?
Taxpayers obviously pay for the compensation of public employees, including retirement benefits. NYC has local income taxes of 3.1%-3.8% in addition to NY state taxes (4%-10.9%) and I have no idea how those taxes are allocated to pay for NYC retiree benefits.
The City of NY negotiates wages and benefits with employee unions including, police, firefighters, sanitation, parks & recreation, public schools, and several others. I think it is safe to say that the number of retired police and firefighteers who are receiving Part B and IRMAA reimbursement is much higher than the number of retired CUNY faculty.
The contract my wife’s union had with the City typically expired a year or two before a new contract was finalized with both sides compromising on their initial demands. Her union typically accepted salary increases far below its initial demands in return for keeping current benefits in place (I don’t remember her ever receiving an annual salary increase of more than 3%). Her union dues were substantial (~2% of her gross pay) which added up to close to $100k over the course of her career .
I was a professor at a small private college in NYC and my salary increases and benefits while we were working were slightly better than hers (my employer doesn’t provide retirement healthcare). In fact, she was the secondary on my healthcare while we were working because my healthcare benefits were more generous. We consider ourselves very fortunate to have retirement healthcare benefits while also considering it a benefit that my wife earned.
I pay IRMAA because I have to take RMDs (which I am not spending). When I was saving for retirement the Roth option did not exist until three years before I retired. IRMAA did not exist until three years after I retired. Therefore I do consider IRMAA unfair because the rules of the game changed after I was no longer working.
I am not opposed to taxation, far from it, but IRMAA is not a normal tax.
IRMAA is not a tax at all any more than the basic Part B premium is a tax. You can deduct both as a medical expense, you can’t deduct a federal tax on a federal tax return.
Some dislike paying any taxes, period. I don’t enjoy it, but I view tax as a cost of conducting my personal business of living. I want health care to be available, police, fire, and similar protections. Also clean water and functional roads and electricity, gasoline and other energy sources in abundance. I like well stocked grocery shelves, too and a functional transportation system. I want people to be properly educated so they can contribute in a meaningful way to society. In so doing, they’ll also pay taxes.
Much of this depends, in part, on government. Now, I do think there is a lot of waste and I do want my taxes spent well accomplishing the things I listed, and more. I don’t understand why government employes “non-essential” workers. But that’s my small-business real world education perspective.
We can pursue happiness, but it isn’t guaranteed and short cuts including drugs are a false road.
I agree with you and Gary Klotz that anyone required to pay IRMAA should be grateful to be in such a place financially. That said, I think complaints about its implementation, such as via cliffs rather than a sliding scale, are valid.
Also, I disagree with you on avoiding it being unfair. Managing one’s income to avoid IRMAA is no more unfair than managing it to avoid the next tax bracket, or doing Roth conversions to avoid future RMDs.
I’m sure most people will agree with you, leverage the tax code legally as much as possible to keep your taxes low.
The unfair part in this case is that avoiding premiums paid to Medicare, just shifts more Medicare costs somewhere else.
I do, however, find it curious that when the super rich do the same thing they are widely criticized and often accused of tax evasion or abusing “loopholes.”
The $$$ involved are different, but the principle is the same.
I was going to write about the same thing, but you stated it more eloquently. Cliffs ought to be replaced by a sliding scale. And taking steps to legally save on both taxes and medicare premiums are appropriate.
“If you’re accustomed to privilege, equality feels like oppression.” Agree with your assessment of IRMAA. And, I’m also happy to complain about all the money I’ve wasted on house, health and care insurance.
Yes, having to pay IRMAA premiums is a sign of success, even though many view it as a penalty for success.