A client calls you in a panic. Their Medicare premiums are more than twice as expensive as they expected, and they don’t understand why. You ask some questions and determine they’re being hit with Medicare’s income-related monthly adjustment amount (IRMAA).
For seniors living on a tight budget, the IRMAA surcharge can represent a financial hardship. As an insurance agent, you can demonstrate your value as trusted advisor by showing your clients when and how to appeal IRMAA surcharges.
Understanding IRMAA Surcharges
IRMAA surcharges increase the monthly Medicare Part B and Medicare Part D premiums based on the enrollee’s modified adjusted gross income (MAGI) from two years prior. The increases are stepped, with enrollees in higher brackets paying larger surcharges. The surcharges are significant. Even in the lowest bracket, enrollees pay around $300 a month more as of 2026. In the highest bracket, the combined Medicare Part B and D surcharges reach almost $800.
The Social Security Administration sends out IRMAA notices to enrollees who will be charged a surcharge. The initial IRMAA notice can arrive any time of year, depending on when the person signs up for Medicare. Annual notices of changes to IRMAA status go out in November.
Disputing IRMAA Surcharges
In some cases, enrollees may be able to appeal an IRMAA surcharge successfully.
- Life-changing events. Enrollees who have experienced certain life-changing events qualify may be able to reduce or eliminate their IRMAA surcharge. Qualifying life-changing events include marriage, divorce, loss of income, employer settlement payments and the death of a spouse.
- Tax errors. IRMAA surcharges are based on your taxes, so if your tax information is wrong, your IRMAA surcharge may be wrong, too. For example, if you filed an amended tax return and the IRMAA surcharge does not reflect this, you may be able to appeal the extra cost.
To appeal the IRMAA surcharge, Medicare enrollees need to contact the Social Security Administration. They can go to the Social Security Administration website and submit a form to request a lower IRMAA. If they have an amended tax return, they can call 1 800-772-1213. It’s also possible to handle IRMAA appeals by fax or mail, or by making an appointment at a local Social Security Administration office.
Medicare beneficiaries typically only have 60 days to appeal IRMAA surcharges. The clock starts ticking upon receipt of an IRMAA determination letter, so it’s important to watch the mail and take action quickly.
Avoiding IRMAA Surcharges
Instead of appealing IRMAA surcharges, enrollees may be able to avoid surcharges in the first place.
- Time big financial moves carefully. Roth conversions, home sales and other large transactions can trigger costly IRMAA charges, and it is not typically possible to appeal these surcharges. It’s therefore important to time these financial moves carefully. For example, if you’re planning to downsize your home for retirement and expect to see significant capital gains, you could time the sale for at least three years before enrolling in Medicare in order to avoid the two-year IRMAA lookback period.
- Calculate your annual income BEFORE the end of the year. Being just a dollar over the threshold can trigger IRMAA surcharges. If you see that you’re approaching the threshold, you may be able to make smart money moves to reduce your taxable income. For example, ThinkAdvisor says qualified charitable distributions can be used to reduce IRMAA surcharges.
By helping your clients understand IRMAA surcharges and appeal when appropriate, you can give them the support they need while establishing yourself as a trusted advisor.
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