“IRMAA” Causes Bump in Medicare Premium
“IRMAA” is an acronym for “Income-Related Monthly Adjustment Amount” and it’s sometimes a big surprise for certain Medicare beneficiaries who have a big income bump in a prior year. The catch is that each year’s Medicare Part B (coverage for outpatient services) and Part D (prescription drugs) premiums are determined using the beneficiary’s income data from two years prior. If that past income included a significant amount from, for example, sale of a property or large withdrawal from a tax-deferred account, the IRMAA threshold may be exceeded and, (surprise!!!!), higher-than-standard Medicare premiums would be the result two years later. Seems tricky, but that’s the way the program works, as described in this NJ.com article by Karin Price Mueller. Click here to read more.
Also, if you’re unsure about how these basics apply to you, or if you have any questions about your individual situation under Social Security, note that the AMAC Foundation provides a free-to-the-public advisory service to help Americans navigate the complexities of this program. Learn more about it here…