Medicare IRMAA Calculator

IRMAA gets discussed almost entirely in terms of Part B, but it actually applies twice — once to Part B and once, separately, to Part D prescription drug coverage — at the exact same income thresholds. Most people budgeting for Medicare account for the Part B hit and are then surprised by a second, smaller surcharge tacked onto their drug plan bill, even though it was determined by the same income figure at the same time.

The two surcharges aren't calculated the same way, though they move together. The Part B IRMAA is added directly to the Part B premium CMS bills you (or, for many retirees, deducts from a Social Security check) — it's a single number regardless of which supplemental coverage you have. The Part D IRMAA works differently: it's a separate CMS-set add-on charged on top of whatever your specific Part D plan's own premium is, and — unusually for Medicare billing — it's typically paid directly to CMS rather than bundled into your plan's premium bill. Two different collection mechanisms, one income determination.

Understanding the five-tier structure matters most for anyone with some control over the timing of income — near-retirees deciding when to realize a gain, take an IRA distribution, or execute a Roth conversion. Because both surcharges are assessed using MAGI from two years earlier, a decision made today doesn't show up in your premium until two Medicare plan years from now. That lag is exactly what makes IRMAA easy to plan around and easy to get blindsided by in equal measure: plan around it, and you can often keep income just under a threshold; ignore it, and a single large one-time income event from two years ago can double or triple your combined Part B and Part D costs for an entire year, with no way to undo it once the tax year has closed.

The tier structure is also worth understanding as a real cliff, not a smooth curve. Between tiers, the jump in combined Part B + Part D surcharge ranges from roughly $95 to $130 a month depending on which boundary is crossed — meaning the marginal cost of the single dollar that pushes MAGI from just under a threshold to just over it can be over a thousand dollars for the year, an effective marginal tax rate on that last dollar of income that's far higher than any ordinary income tax bracket. This is the single most important thing to understand about IRMAA: it isn't proportional to how far over a threshold your income lands, only to which side of the line it falls on.