Why Would Social Security Stop Paying Medicare Part B?
September 30, 2023
How Many Medicare Beneficiaries Switch from Traditional Medicare to Medicare Advantage Plan in 2023?
October 11, 2023If you are a Medicare beneficiary, you may be wondering how much you will have to pay for your Medicare Part B premium in 2024. Medicare Part B covers outpatient services such as doctor visits, lab tests, preventive care, and durable medical equipment. The standard Medicare Part B premium for 2023 is $164.90 per month, but some people may have to pay more or less depending on their income and other factors. In this article, we will explain what tax year is 2024 Medicare Part B premium, how it is calculated, and what you can do to reduce or avoid the Medicare surcharge known as IRMAA.
What is IRMAA?
IRMAA stands for Income-Related Monthly Adjustment Amount. It is an extra fee that some higher-income Medicare beneficiaries have to pay on top of their regular Medicare Part B and Part D premiums. The purpose of IRMAA is to help cover the costs of Medicare as well as to make the program more progressive and fair. IRMAA applies to both Traditional Medicare (Part B and Part D) and Medicare Advantage Plans.
According to the Centers for Medicare & Medicaid Services (CMS), about 7% of Medicare beneficiaries paid IRMAA in 2021¹. The extra premiums they paid lowered the government’s share of the total Part B and Part D expenses by two percentage points².
How is 2024 Medicare Part B Premium Calculated?
The 2024 Medicare Part B premium is based on your modified adjusted gross income (MAGI) from two years ago. MAGI is not the same as your regular adjusted gross income (AGI); it includes additional sources of income such as tax-exempt interest and dividends from municipal bonds. The higher your MAGI falls within the income brackets, the higher your IRMAA surcharge will be.
The CMS has not yet announced the official 2024 Medicare Part B premium and IRMAA amounts, but they are expected to be released in November 2023. However, based on the projections from the Medicare Board of Trustees³ and the inflation data from the Consumer Price Index for Urban Consumers (CPI-U)⁴, we can estimate what the 2024 IRMAA brackets will be.
The table below shows the possible 2024 IRMAA brackets for single and married filing jointly taxpayers, assuming a 0% or a 5% annualized inflation rate in August 2023. The actual numbers may vary depending on the final inflation data and any legislative changes.
| Income Bracket | Single | Married Filing Jointly | Standard Part B Premium | IRMAA Surcharge | Total Part B Premium |
|---|---|---|---|---|---|
| Below Threshold | Up to $102,000 | Up to $204,000 | $174.80 | $0.00 | $174.80 |
| First Bracket | $102,001 – $129,500 | $204,001 – $259,000 | $174.80 | $12.90 | $187.70 |
| Second Bracket | $129,501 – $161,500 | $259,001 – $323,000 | $174.80 | $33.30 | $208.10 |
| Third Bracket | $161,501 – $193,000 | $323,001 – $386,000 | $174.80 | $53.80 | $228.60 |
| Fourth Bracket | $193,001 – $500,000 | $386,001 – $750,000 | $174.80 | $74.20 | $249.00 |
| Fifth Bracket | Above $500,000 | Above $750,000 | $174.80 | $81.00 | $255.80 |
As you can see from the table, if your income exceeds the threshold for your filing status by even one dollar, you will have to pay a higher amount for your Medicare Part B premium in 2024. For example, if you are single and your MAGI in 2022 was $102,001, you will have to pay an extra $12.90 per month or $154.80 per year in IRMAA surcharges in 2024.
How Can You Reduce or Avoid IRMAA?
If you are concerned about paying IRMAA in 2024 or future years, there are some strategies that you can use to reduce or avoid it.
- Plan your income in retirement carefully. If possible, try to keep your MAGI below the IRMAA threshold or at least within the lowest bracket by managing your sources of income such as withdrawals from retirement accounts, pensions, annuities, capital gains, dividends, interest, and Roth conversions.
- File an appeal if your income has changed significantly since two years ago due to a life-changing event such as retirement, divorce, death of a spouse, or loss of income. You can request a reconsideration of your IRMAA determination by filling out Form SSA-44 and providing evidence of your income change. You can find more information on how to appeal IRMAA on the Social Security website⁵.
- Consider switching to a Medicare Advantage Plan that offers lower or no IRMAA surcharges. Some Medicare Advantage Plans may have lower premiums than Traditional Medicare and may also cover some or all of the IRMAA surcharges for Part B and Part D. However, you should also compare the benefits, costs, and networks of different Medicare Advantage Plans before making a decision.
We’re Here to Help
You do not have to spend hours reading articles on the internet to get answers to your Medcare Questions. Give Green Insurance Agency a Call at 904-717-1176. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.
Conclusion
The 2024 Medicare Part B premium is based on your income from two years ago. If your income exceeds the IRMAA threshold for your filing status, you will have to pay an extra fee on top of your standard Medicare premium. The IRMAA surcharges can add up to hundreds or thousands of dollars per year, depending on your income bracket. Therefore, it is important to plan your income in retirement wisely and to explore your options for reducing or avoiding IRMAA.
FAQS
What is IRMA?
IRMAA stands for income-related monthly adjustment amount, which are extra premiums some pay for Medicare Part B and Part D based on income.
How is IRMAA calculated?
IRMAA is based on your individual taxable income from 2 years prior, as reported on your IRS tax return. Higher incomes mean higher premiums.
What are the IRMAA brackets for 2024?
The IRMAA income brackets determining premium amounts for 2024 are: below $97k, $97-$123k, $123-$153k, $153-$183k, and above $183k.
Who has to pay extra IRMAA premiums?
If your income exceeds certain thresholds – $97k single, $194k married filing jointly – you’ll pay an extra monthly premium on top of standard Medicare costs.
How much will IRMAA premiums increase in 2024?
IRMAA costs will increase in 2024 but by no more than 6.00% higher than 2023 premium amounts, as determined by Medicare trustees.
When did Medicare start IRMAA adjustments?
IRMAA was initially implemented in 2007 to have higher income beneficiaries pay a larger share of Medicare costs through income-related premiums.
Is there an income limit for paying IRMAA?
There is no upper income limit for paying IRMAA. The highest bracket is $500k single, $750k married, with maximum premiums around $500 per month.
Do Part D prescription premiums have IRMAA?
Yes, higher income enrollees also pay an extra monthly premium for Part D prescription drug coverage in addition to Part B.
How can I calculate if I’ll have IRMAA?
Use your most recent tax return to calculate income to estimate if you’ll have IRMAA premiums when you enroll in Medicare.
Can I appeal my IRMAA determination?
Yes, you can appeal your Medicare IRMAA premiums if your income has gone down or you have special circumstances for Medicare to reconsider.
