Financial Planning
September 21, 2023

Medicare & IRMAA: Everything You Need to Know in 2023

Stewart Willis

Medicare income-related monthly adjustment amount (IRMAA) is a huge point of discussion. This is especially true for high-income individuals because it is a penalty that affects them directly. Medicare IRMAA 2023 thresholds have increased, affecting how much you pay for your Medicare Part B and Part D premiums. 

With these new changes, you must ensure you can handle the penalty to avoid costly mistakes.

What Is IRMAA for Medicare?

Medicare IRMAA is an additional charge that targets high-income individuals. You have to pay for both Medicare Part B premiums and Medicare Part D premiums for prescription drug plans. The Medicare IRMAA for Part B and Part D considers your income to calculate the penalty. 

By following this approach, your monthly contributions align with your financial situation. This ensures fairness and equality for all Medicare beneficiaries involved. Depending on your income level, you may end up paying several times the standard premium amount each month.

Medicare IRMAA applies only to Medicare beneficiaries who have a modified adjusted gross income (MAGI):


  • Above $97,000 for an individual return
  • $194,000 for a joint tax return

This means that Medicare IRMA 2023 tax brackets have increased. 

What Is the Income for IRMAA for 2023?

To calculate your IRMAA for 2023, the government will refer to your tax filings from 2021. They use a two-year lag time to determine the IRMAA requirements for Medicare recipients. The Center for Medicare and Medicaid Services has updated thresholds for Medicare IRMAA 2023.

What Is Medicare Part B IRMAA?

Outpatient services such as doctor visits, preventive screenings, and certain home health services are mainly covered under Part B for Medicare. If your MAGI exceeds $97,000 threshold, you will be required to pay the standard Part B premium along with an additional Medicare Part B IRMAA in 2023.

What Is Medicare Part D IRMAA?

Medicare Part D provides vital outpatient prescription drug coverage. It ensures that individuals have access to the medications they need. With Part D, beneficiaries can confidently seek the medications they require without worrying about out-of-pocket expenses. 

Medicare premium is not billed by your Part D plan. Rather, it is directly billed by Medicare itself. 

Is IRMAA Based on AGI or MAGI?

To determine if you are subject to IRMAA charges, Medicare IRMAA considers your MAGI you reported on your IRS tax return from two years ago. Your MAGI may be the same as your adjusted gross income (AGI). This calculation is based on the previous year's data. The new adjustments for Medicare IRMAA in 2023 will affect your Medicare premiums in 2025. 

How to Plan for Medicare IRMAA

Planning for Medicare IRMAA has some challenges. That’s mainly because no one knows the Medicare premiums in two years. Employing complex strategies to avoid paying Medicare IRMAA can actually hurt you more than it can help you. The most obvious way to avoid Medicare IRMAA is to lower your MAGI, but that isn’t always possible, nor wise.

Facing Medicare IRMAA

No one likes paying penalties, but in certain situations, it can be a logical choice to accept the penalty to reduce future tax expenses. It might be better to focus your efforts on other avenues where you can keep more of what you earn. As a high-income earning individual, you shouldn’t have tunnel vision regarding your financial plans. 

Stethoscope on top of $20 bills

The impact of IRMAA on high-income individuals is often overshadowed by substantial assets and income. While the increased cost may burden some, it represents a smaller percentage of your overall financial picture. Therefore, the added expense is less burdensome for you.

How Do I Appeal IRMAA in 2023?

Many don’t know this, but there are special circumstances that allow you to avoid paying Medicare IRMAA in 2023. 

If you meet the criteria for a reduction or elimination of your IRMAA because of a life-changing event or if your income has significantly decreased, you can utilize the Medicare IRMAA Life-Changing Event form, alternatively referred to as SSA-44. This SSA-44 form outlines life-changing events that could help you qualify for avoiding Medicare IRMAA. These events include:

  • Marriage
  • Divorce or annulment
  • Death of a spouse
  • Retirement
  • Reduction in work hours
  • Loss or reduction of pension
  • Loss of income-producing property because of a natural disaster or other event beyond your control
  • Settlement from an employer because of retirement or reorganization

While the SSA-44 form seems straightforward, you should work with a tax professional or CPA to guide you. To correctly complete the SSA-44 form, you must:

  • Specify the life-changing event
  • Provide the year it happened
  • Provide an estimate of your MAGI for the upcoming year, including your spouse if applicable, after this significant life event

A financial planner has the expertise to guide you during this process. Different sources of income can affect your MAGI and potentially your Medicare IRMAA. Tax professionals and financial advisors can help you accurately determine your income, particularly in complex situations. 

This is particularly useful if you have multiple sources of income. Without professional guidance, you could miss relevant income sources to make a precise calculation. This is your best bet to avoid potential complications or penalties down the line. 

Get a Future-proof Financial and Retirement Plan

Many individuals overlook specific income sources, only to be caught off guard when they are hit with unexpected expenses. It is important to take precautionary measures to avoid being negatively impacted by these financial surprises. 

A future-proof financial plan means using the information you have to make informed choices. While Medicare IRMAA may affect you, it is only one small part of your overall financial and retirement goals. Let the team at Asset Preservation Wealth and Tax help you create a strategy that works for you and your unique tax situation.

As financial fiduciaries, we are obligated to act in your best interest. Planning for the future needs expert guidance and the best tax expertise to avoid losing your hard-earned money. The right investments and tax strategies can help relieve your tax liability. 

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Stewart Willis is the founder and president of Asset Preservation Wealth & Tax, a financial planning firm in Phoenix, Arizona. Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.

The commentary on this blog reflects the personal opinions, viewpoints and analyses of the author, Stewart Willis, providing such comments, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), an SEC registered investment adviser or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment, legal or tax advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations for services, execution of required documentation, including receipt of required disclosures. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Any statistical data or information obtained from or prepared by third party sources that Foundations deems reliable but in no way does Foundations guarantee the accuracy or completeness. Investments in securities involve the risk of loss. Any past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where Foundations and its advisors are properly licensed or exempted. For more information, please go to and search by our firm name or by our CRD # 175083.

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