IRMAA explained

February 11, 2011

Thanks to Kaiser Health News for this clear explanation of the increased monthly premiums charged to higher-income individuals and couples for Part D prescription drug coverage. The premium increase was part of PPACA, one of the provisions intended to help finance the law, and is expected to raise about $36 billion through 2019.

The Part D premium increase is tied to Part B premium amounts, which in turn are tied to taxpayer Modified Adjusted Gross Income. Tables showing the Part B and Part D amounts for different income levels can be found on the Social Security web site – scroll down the page ot the section titled Monthly Medicare premiums for 2011.

Update 2/14/2011: See this post for more about the Part D premium charges, and a link to the table on the Social Security web site where you can figure out what your amount will be.

Update 11/4/2010: A reader called Social Security to find out what his IRMAA would be (see comment below) and was told that he needed to call Medicare to get that information. Maybe he got hold of someone who was uninformed about Social Security’s role in determining the fee? If anyone else calls Social Security and DOES get an answer, we would be very appreciative if you’d leave a comment here to let other readers know about it.

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We just posted this in a reply to a question from a reader, but it seems like it might be useful to many individuals and to benefits managers who may be getting questions from their retirees.

The healthcare reform bill (the PPACA) created a requirement that as of Jan 1 2011, higher income people will pay an extra amount in addition to their monthly prescription drug premium. This extra amount is called the Income Related Monthly Adjustment Amount (IRMAA). IRMAA will affect those people whose modified adjusted gross income is $85,000 or more (for singles) and $170,000 or more (for couples filing jointly) in 2009 and later.

The extra amount will be deducted automatically from Social Security checks.

We called Medicare to see if they could provide more specifics. They explained that individuals should call Social Security at 1-800-772-1213 to learn what the exact amount will be and to learn if they qualify for assistance with the IRMAA.