Medicare Part D IRMAA
IRMAA stands for ‘Income-Related Monthly Adjustment Amount.’ Unlike a Medicare Part D penalty for waiting too long to enroll, IRMAA is an extra amount you pay for Part D coverage in addition to your Medicare Part D premium that is solely based on your income.
You may owe an IRMAA if the ‘modified adjusted gross income’ shown on your federal income tax return is greater than the specified income limits set by the Social Security Administration. In 2017, IRMAA limits are $85,000 for an individual tax return and $170,000 for a joint tax return. Less than 5% of people with Medicare are affected, so most people will not pay a higher premium.
If you owe an IRMAA, Social Security will send you a letter notifying you that your IRMAA will be added to your Medicare Part D cost. Keep in mind that the Part D IRMAA is not billed by or paid to your Part D plan, but rather it is billed by the Centers for Medicare and Medicaid Services (CMS). If you are assessed an IRMAA and do not pay it, you risk disenrollment from your Part D plan.