Higher Medicare premiums are triggered by your income, specifically your Modified Adjusted Gross Income (MAGI). If your MAGI exceeds certain thresholds, you will pay an Income-Related Monthly Adjustment Amount (IRMAA) in addition to your standard Medicare Part B premium. These adjustments ensure that individuals with higher incomes contribute more to their Medicare costs.
Understanding Medicare Income Thresholds for Higher Premiums
The Social Security Administration (SSA) reviews your tax returns from two years prior to determine your MAGI for Medicare premium purposes. For example, your 2024 Medicare premiums are based on your 2022 tax information. The income thresholds are updated annually.
For 2024, individuals whose Modified Adjusted Gross Income (MAGI) exceeds $103,000 will pay higher Medicare Part B premiums. The increase in premium varies depending on your specific income bracket.
Here's a breakdown of the 2024 Medicare Part B premium adjustments for individuals based on their MAGI:
| Modified Adjusted Gross Income (MAGI) | Part B Monthly Premium Amount |
|---|---|
| Above $103,000 and less than $397,000 | Standard premium + $384.30 |
| Equal to or above $397,000 | Standard premium + $419.30 |
Note: The standard Medicare Part B premium for 2024 is $174.70.
What is Modified Adjusted Gross Income (MAGI)?
Your Modified Adjusted Gross Income (MAGI) is calculated by taking your Adjusted Gross Income (AGI) and adding back certain tax-exempt incomes. While the exact calculation can vary depending on the context, for Medicare purposes, it typically includes:
- Adjusted Gross Income (AGI) from your tax return
- Tax-exempt interest
- Tax-exempt foreign earned income
- Tax-exempt income from U.S. possessions
- Tax-exempt income from Guam, American Samoa, or the Northern Mariana Islands
This total is what the SSA uses to determine if you are subject to an IRMAA.
Impact of IRMAA
The Income-Related Monthly Adjustment Amount (IRMAA) applies to both Medicare Part B (medical insurance) and Medicare Part D (prescription drug coverage). If you are subject to an IRMAA, you will receive a notification from the SSA detailing your specific premium amount. It is crucial to understand that these additional amounts are paid directly to Medicare and are separate from any premiums you might pay to a Medicare Advantage plan or a Part D prescription drug plan.
For more detailed information on Medicare premiums and income thresholds, you can visit the Social Security Administration website.
