Editor's Note: This story originally appeared on Boldin.
If you have enough wealth, your Medicare costs — specifically your premiums — might be more than you had bargained for. Not everyone knows this, but there are Medicare surcharges (officially called income-related monthly adjustment amount, or IRMAA) that correspond to income brackets.
These additional costs can really add up. It is the highest-earning 5% of Medicare recipients who pay more for their health coverage.
What Does Medicare Cost?
There are many different costs associated with Medicare. You may pay monthly premiums, IRMAA, coinsurance, as well as copays and deductibles.
Your total out-of-pocket costs for Medicare will vary tremendously depending on the types of coverage you select, your income, where you live, your health status, and healthcare usage.
What Is IRMAA?
IRMAA stands for income-related monthly adjustment amount. Medicare.gov explains that, if your modified adjusted gross income (MAGI) as reported on your IRS tax return from two years ago is above a certain amount, you’ll pay the standard premium amount and IRMAA.
IRMAA is an extra cost added to your premiums — specifically parts B and D. Keep reading to learn about Medicare premiums and just how significantly they rise for those with higher income.
What Is the Maximum IRMAA You Might Pay?
The standard monthly Medicare Part B premiums in 2024 are $185. However, if you are in the highest IRMAA income bracket for Parts B and D, you will pay at least an additional $628.90 a month or $7,546.80 a year.
How Can You Reduce a Medicare Surcharge?
With some planning, there are steps you can take to avoid or reduce IRMAA.
Keep reading for some ideas.
1. Find Out in Which Future Years You Will Pay a Medicare Surcharge, IRMAA
You can use a retirement planner that provides you with an IRMAA analysis. It’s a way see your projected annual income and assess when you might be assessed for IRMAA and how much for every year from now through your (and your spouse’s) longevity.
Note: Your IRMAA payments are determined by your MAGI from two years earlier. So, the IRMAA you would owe in 2028 will be dictated by your 2026 earnings.
2. Take Steps to Minimize Taxable Income
If you can lower your taxable income below an IRMAA bracket, you can save hundreds, if not a thousand or more, on the surcharges. If you are even one penny over the bracket, you will pay IRMAA.
However, minimizing your retirement income can be tricky, especially if you are already taking your required minimum distributions (RMDs) from your tax deferred accounts.
Planning ahead is key. You may be able to shelter income in certain years, manage capital gains, utilize Medicare savings accounts, take charitable distributions and consider other strategies. Working with a tax accountant or a certified retirement planner may be helpful.
3. Consider a Roth Conversion
You can convert money from your taxable retirement savings accounts into a Roth account to avoid having to take RMDs. This can be a great way to reduce taxable income and enable you to avoid IRMAA.
4. Let Medicare Know if Your Circumstances Have Changed
Your IRMAA is based on your income from two years ago. If your circumstances have changed since that time, you can file an appeal with Medicare to let them know about a reduction in income.
Events that might make Medicare reassess your IRMAA include marriage, divorce, spouse’s death, loss of a job, loss of income generating property, loss of your pension and more.
5. Create and Maintain Your Overall Retirement Plan
Healthcare is a major consideration when planning a secure retirement, but there are hundreds if not thousands of different elements that impact your current and future wealth and security.
Make sure that you have a comprehensive plan and that you keep it updated.
2025 Medicare Premiums, Including IRMAA
The following amounts come from the government. The premium amounts for Medicare Part A and C are mostly standardized — varying by the type of coverage.
However, as you will see, the premiums you pay for Medicare Parts B and D will depend on your income level.
Medicare Part A Premiums
The monthly premiums for Medicare Part A range from $0-$518.
Most people don’t pay a monthly premium for Part A because you paid adequate Medicare taxes while working. If you are required to buy Part A, you’ll pay between $285 and $518 each month.
Medicare Part B Premiums and IRMAA Surcharges
If you are not required to pay IRMAA, Medicare Part B premiums in 2025 are $185 each month.
If you have a higher income, your costs for Medicare Part B premiums can be significantly higher.
Next, we’ll look at the premium amounts for full Part B coverage for the different income tiers.
Lowest Bracket
People in the lowest income bracket do not have an IRMAA surcharge.
The lowest brackets are:
- Filing jointly with an income of $212,000 or less per year
- Filing as an individual with an income of $106,000 or less per year
Second Tier
There is a $74 IRMAA surcharge for households:
- Filing jointly with an income above $212,000 up to $266,000 per year
- Filing as an individual with an income above $106,000 up to $133,000 per year
Third Tier
There is a $185 IRMAA surcharge for those:
- Filing jointly with an income above $266,000 up to $334,000 per year
- Filing as an individual with an income above $133,000 up to $167,000 per year
Fourth Tier
There is a $295.90 per month IRMAA surcharge for those:
- Filing jointly with an income above $334,000 up to $400,000 per year
- Filing as an individual with an income above $167,000 up to $200,000 per year
Fifth Tier
There is a $406.90 per month IRMAA surcharge for those:
- Filing jointly with an income above $400,000 up to $750,000 per year
- Filing as an individual with an income above $200,000 up to $500,000 per year
Sixth Tier
There is a $443.90 monthly surcharge for those:
- Filing jointly with an income above $750,000 per year
- Filing as an individual with an income above $500,000 per year
Medicare Part C Premiums
The Part C — more commonly known as Medicare Advantage — monthly premium varies by plan.
Medicare Part D Premiums
Medicare Part D — prescription drug coverage — premiums also vary depending on what plan you choose.
In 2025, beneficiaries whose 2023 income exceeded $106,000 (individual return) or $212,000 (joint return) will pay an added amount, IRMAA, on top of plans’ premiums ranging from $13.70 to $85.80 per month, depending on income.
Lowest Bracket
People in the lowest income bracket will pay their plan’s premium with no Medicare surcharge. The lowest bracket is for those:
- Filing jointly with an income of $221,000 or less per year
- Filing as an individual with an income of $106,000 or less per year
Second Tier
Those with the following income levels will pay their plan premium, plus an additional $13.70 per month:
- Filing jointly with an income above $212,000 up to $266,000 per year
- Filing as an individual with an income above $106,000 up to $133,000 per year
Third Tier
Those with the following income levels will pay their plan premium, plus an additional $35.30 per month:
- Filing jointly with an income above $266,000 up to $334,000 per year
- Filing as an individual with an income above $133,000 up to $167,000 per year
Fourth Tier
Those with the following income levels will pay their plan premium, plus an additional $57 per month:
- Filing jointly with an income above $334,000 up to $400,000 per year
- Filing as an individual with an income above $167,000 up to $200,000 per year
Fifth Tier
Those with the following income levels will pay their plan premium, plus an additional $78.60 per month:
- Filing jointly with an income above $400,000 up to $750,000 per year
- Filing as an individual with an income above $200,000 up to $500,000 per year
Sixth Tier
Those with the following income levels will pay their plan premium, plus an additional $85.80 per month:
- Filing jointly with an income above $750,000 per year
- Filing as an individual with an income above $500,000 per year
When Did These Surcharges on Medicare Premiums Become Law?
According to Kaiser, the surcharges were a provision in the Medicare Modernization Act of 2003, a law passed to change how Medicare pays physicians. The law went into effect in 2007 and was updated in 2015.
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