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HI 01101.031: How IRMAA is Calculated and How IRMAA Affects the Total Medicare Premium

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  • Effective Dates: 10/02/2014 - Present
  • Effective Dates: 02/01/2018 - Present
  • TN 3 (11-10)
  • HI 01101.031 How IRMAA is Calculated and How IRMAA Affects the Total Medicare Premium
  • Citations:
  • Section 1839(i) of the Social Security Act;
  • CMS regulations, 42 CFR 408.20 – 408.28;
  • Section 1860D-13(a)(7) of the Social Security Act
  • A. Policy for Medicare Part B IRMAA calculation
  • The Centers for Medicare & Medicaid Services (CMS) calculates the Medicare Part B monthly premium amounts and the income-related monthly adjustment amount (IRMAA). CMS publishes the amounts, which can be found in the current Federal Register each year. By law, threshold amounts and modified adjusted gross income (MAGI) ranges are fixed through 2019 and can be found in the same announcement.
  • For IRMAA beneficiaries, Part B premium surcharges for late enrollment or reenrollment will continue to be calculated based on the Part B standard monthly premium. More information regarding Part B premium surcharge calculations can be found in HI 01001.010.
  • Part B beneficiaries usually pay about 25% of the true cost for Part B. The true cost of Part B that IRMAA beneficiaries pay is 35% for level 1, 50% for level 2, 65% for level 3, and 80% for level 4.
  • B. IRMAA Percentage Tables, Medicare Part B Premium Year 2010 (Ranges and Thresholds Will Not Change Through Premium Year 2019)
  • B. IRMAA Percentage Tables, Medicare Part B Premium Year 2018 (Ranges and Thresholds Will Not Change Through Premium Year 2019)
  • 1. Tax filing status: Single, head of household, married, filing separately (but living apart for the entire year) or qualifying widow(er) with dependent child
  • Level
  • If MAGI in tax year 2008 (or 2007, if 2008 was not available) is:
  • If MAGI in tax year 2016 (or 2015, if 2016 was not available) is:
  • The percentage of the total Part B coverage cost the beneficiary will pay is:
  • 1
  • More than $85,000 but not more than $107,000
  • 35 %
  • 2
  • More than $107,000 but not more than $160,000
  • More than $107,000 but not more than $133,500
  • 50 %
  • 3
  • More than $160,000 but not more than $214,000
  • More than $133,500 but not more than $160,000
  • 65 %
  • 4
  • More than $214,000
  • More than $160,000
  • 80 %
  • 2. Tax filing status: Married filing jointly
  • Level
  • If MAGI in tax year 2008 (or 2007, if 2008 was not available) is:
  • If MAGI in tax year 2016 (or 2015, if 2016 was not available) is:
  • The percentage of the total Part B coverage cost the beneficiary will pay is:
  • 1
  • More than $170,000 but not more than $214,000
  • 35 %
  • 2
  • More than $214,000 but not more than $320,000
  • More than $214,000 but not more than $267,000
  • 50 %
  • 3
  • More than $320,000 but not more than $428,000
  • More than $267,000 but not more than $320,000
  • 65 %
  • 4
  • More than $428,000
  • More than $320,000
  • 80 %
  • 3. Tax filing status: Married, filing separately (but lived together at some time during the year)
  • Level
  • If MAGI in tax year 2008 (or 2007, if 2008 was not available) is:
  • If MAGI in tax year 2016 (or 2015, if 2016 was not available) is:
  • The percentage of the total Part B coverage cost the beneficiary will pay is:
  • 3
  • More than $85,000 but not more than $129,000
  • 65 %
  • 4
  • More than $129,000
  • More than $85,000
  • 80 %
  • C. Total Medicare Part B premium
  • 1. Total premium
  • The total Medicare Part B premium consists of the following:
  • * Standard Medicare Part B premium, plus
  • * Late filing surcharges for Medicare Part B (applied to the standard premium, but not to the IRMAA), plus
  • * IRMAA, minus
  • * Any reduction in the Medicare Part B premium due to enrollment in a Medicare Advantage plan (Part C) which offers a reduction in the Part B premium amount as a benefit (Medicare Advantage Reduction (MARD)). More information regarding the Medicare Advantage (MA) program can be found in HI 00208.066.
  • NOTE: Beneficiaries who pay IRMAA lose variable SMI premium protection.
  • 2. Examples
  • a. Example 1 – no surcharge or MA reduction
  • $110.50
  • $134.00
  • Standard premium for 2010
  • Standard premium for 2018
  • +$176.80
  • +$214.30
  • Part B IRMAA – Level 3
  • $287.30
  • $348.30
  • Total Medicare Part B premium
  • b. Example 2 – surcharge and MA reduction
  • $110.50
  • $134.00
  • Standard premium for 2010
  • + $11.10
  • + $13.40
  • 10% late filing surcharge
  • $121.60
  • $147.40
  •  
  • +$176.80
  • +$214.30
  • Part B IRMAA – Level 3
  • $298.40
  • $361.70
  •  
  • - $70.00
  • MA Reduction
  • $228.40
  • $291.70
  • Total Medicare Part B premium
  • D. Policy for Medicare prescription drug coverage IRMAA calculation
  • CMS also calculates IRMAA amounts for prescription drug coverage based on the Medicare base beneficiary premium. Once the IRMAA calculations are done, CMS notifies the Social Security Administration (SSA) so we can make IRMAA determinations.
  • CMS also calculates premium surcharges for late enrollment or reenrollment based on the base beneficiary premium.
The materials available at this web site are provided free of charge, for informational purposes only, and without warrant by True Link Financial, Inc., and are not legal advice or Social Security benefits advice. You should contact your attorney to obtain advice with respect to any particular issue or problem, or the Social Security Administration with any general inquiries. Click here to view this section of the POMS on the Social Security Administration website.