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How does Medicare determine who is subject to paying more for Part B?

Social Security is the agency that determines who will pay the Income-related Monthly Adjustment Amount (IRMAA) for Part B, medical insurance, and Part D, prescription drug coverage. 

Social Security bases the IRMAA determination on the IRS tax return two years prior to the current year. For those enrolling in Medicare Part B in 2018, tax records from 2016 will establish the modified adjusted gross income and determine whether IRMAA will apply.Then, every November, Social Security will look at the next tax record to determine whether IRMAA will apply. 

Sally turned 65 in March 2018. Social Security reviewed her 2016 income to make the initial IRMAA determination. In November, the agency will review her 2017 tax record to see whether she will be subject to IRMAA in 2019. 

If, during the last two years, there has been a significant drop in income due to a life-changing event, such as a divorce or retirement, there is a process for notifying Social Security. This can result in reducing or suspending the higher premiums. Check out the Social Security notice and instructions.

Also see "Paying More for Medicare" in the 65 Incorporated library at www.65incorporated.com/topics/paying-more-medicare.

Last updated: 01-31-2018