What Is Medicare IRMAA?
IRMAA stands for Income-Related Monthly Adjustment Amount. It is an extra charge added to the Medicare Part B and Part D premiums of higher-income beneficiaries. Social Security sets it each year using your modified adjusted gross income from a tax return filed two years earlier, so income in one year can affect Medicare costs later.
This guide explains how the Medicare income surcharge works, shows the 2026 income tiers from the Centers for Medicare & Medicaid Services (CMS), and covers the other Medicare basics Connecticut retirees weigh, including enrollment deadlines and Medigap options. It is educational only and does not recommend an income level or strategy for any individual.
Understanding Medicare Basics
Medicare provides health insurance for Americans aged 65 and older, along with certain younger individuals with disabilities. For Connecticut retirees, understanding the four parts of Medicare is essential for making informed coverage decisions.
Part A
Hospital insurance covering inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.
Part B
Medical insurance covering doctor visits, outpatient care, medical supplies, and preventive services.
Part C
Medicare Advantage plans offered by private companies as an alternative to Original Medicare, often including prescription drug coverage.
Part D
Prescription drug coverage available through standalone plans or included in Medicare Advantage plans.
Critical Enrollment Deadlines
Missing a Medicare enrollment deadline may result in delayed coverage and, in some cases, late enrollment penalties that can last as long as you have coverage. These are the key timeframes Connecticut retirees often review.
Initial Enrollment Period (IEP)
Seven-month window starting three months before your 65th birthday month, including your birthday month, and continuing for three months after. This is typically your first opportunity to enroll in Medicare without penalties.
General Enrollment Period
January 1 through March 31 each year for those who missed their IEP. Coverage begins July 1, and late enrollment penalties may apply. The Part B penalty is 10% for each 12-month period you were eligible but not enrolled.
Annual Open Enrollment
October 15 through December 7 each year to change Medicare Advantage plans, switch between Original Medicare and Medicare Advantage, or change Part D prescription drug plans. Changes take effect January 1.
Special Enrollment Periods
Available for qualifying life events such as moving, losing employer coverage, or qualifying for Medicare due to disability. These periods allow enrollment outside standard timeframes without penalties.
Medicare Costs for 2026: Part B Premiums and IRMAA Tiers
Medicare costs vary based on income and coverage choices. Understanding these expenses may help Connecticut retirees plan for healthcare costs in retirement. For 2026, CMS set the standard Medicare Part B premium at $202.90 per month. Higher-income beneficiaries pay an income-related monthly adjustment amount (IRMAA) on top of that standard premium, and a separate adjustment on Part D prescription drug coverage.
2026 Medicare Part B and Part D Income-Related Monthly Adjustment Amounts
| Single filers (MAGI) | Joint filers (MAGI) | Part B income-related adjustment | Total Part B premium | Part D income-related adjustment |
|---|---|---|---|---|
| $109,000 or less | $218,000 or less | $0.00 | $202.90 | $0.00 |
| Above $109,000 up to $137,000 | Above $218,000 up to $274,000 | $81.20 | $284.10 | $14.50 |
| Above $137,000 up to $171,000 | Above $274,000 up to $342,000 | $202.90 | $405.80 | $37.50 |
| Above $171,000 up to $205,000 | Above $342,000 up to $410,000 | $324.60 | $527.50 | $60.40 |
| Above $205,000 and below $500,000 | Above $410,000 and below $750,000 | $446.30 | $649.20 | $83.30 |
| $500,000 or more | $750,000 or more | $487.00 | $689.90 | $91.00 |
Source: CMS, 2026 Medicare Parts A & B Premiums and Deductibles fact sheet, released November 14, 2025; figures checked as of November 6, 2026. Amounts are per person, per month. Tiers are based on modified adjusted gross income (MAGI) from your 2024 tax return. The Part D adjustment is added to your own plan's premium. Different thresholds apply to married beneficiaries who live together but file separate returns; see the CMS fact sheet. Thresholds and premiums change every year.
The surcharge works in tiers rather than as a gradual slope. Once income is above a tier's threshold, the adjustment for that tier applies for the year, and for a married couple filing jointly it applies to each enrolled spouse. Whether a given income lands in a higher tier depends on individual circumstances.
The Two-Year Lookback and Life-Changing Events
Medicare does not use your current income to set this year's surcharge. Social Security generally uses the most recent federal tax return the IRS provides to it. For 2026 premiums, that is generally the 2024 return. Income from a Roth conversion, a large capital gain, or a required distribution in one year can therefore show up in Medicare premiums two years later. Your MAGI is your adjusted gross income plus tax-exempt interest income.
If your income has gone down since that return, you may ask Social Security to make a new decision about your surcharge. According to Social Security's guidance on higher-income Medicare premiums, qualifying events include marriage, divorce, the death of a spouse, you or your spouse stopping work or reducing work hours, and certain losses of income-producing property or employer pension changes. You report the event on Form SSA-44 and provide documentation, such as a letter from an employer about retirement.
This request has limits. Social Security reviews the documentation and decides each request, so a reduction is not guaranteed, and an event only helps when it makes a difference in the income level Social Security considers. Individual outcomes depend on the facts of each situation.
IRMAA Brackets for 2027
As of November 6, 2026, CMS has not announced the 2027 Part B premium or the 2027 income tiers. CMS usually publishes them in the fall; the 2026 figures were released on November 14, 2025. For 2027 premiums, Social Security generally uses the 2025 tax return. Check the CMS newsroom fact sheets for the official 2027 figures once they are released.
How IRMAA Connects to Other Retirement Decisions
Because the surcharge is based on MAGI, decisions that change taxable income can also change Medicare premiums two years later. Three related guides explain those connections in more detail:
- How Connecticut and federal rules tax retirement income is covered in our guide to retirement taxes in Connecticut.
- How conversions add to taxable income in the year they happen is covered in our guide to Roth conversions for Connecticut retirees.
- How the start date of benefits affects income, and the taxable share of benefits, is covered in our guide to Social Security timing for Connecticut retirees.
The hypothetical example at the end of this page shows how one couple might think about a conversion near the first threshold. It is an illustration only and is not a recommendation.
Medigap Insurance Options
Medigap policies help cover costs that Original Medicare doesn't pay, such as copayments, coinsurance, and deductibles. Medigap rules, including when an insurer must accept an applicant, vary by state and by individual circumstances. The Connecticut Insurance Department can provide the current rules.
Plan G
Covers most Medicare cost-sharing, except the Part B deductible. Benefits are standardized, but premiums vary by insurer and by individual circumstances.
Plan N
Includes copayments for some doctor visits and emergency room visits, and premiums are generally lower than Plan G. Whether the trade-off fits depends on individual circumstances and expected health care use.
High-Deductible Plan G
Lower monthly premiums, with higher out-of-pocket costs until the annual deductible is met. The 2026 deductible is $2,950, according to Medicare.gov. Availability varies by state and insurer.
Next Step: Talk Through Your Medicare Costs
If you would like to understand how these rules may apply to your income sources, you can Schedule a Call with Skinner Wealth Strategies.
Content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal professional.
Worked Example
A conversion resized to stay under the surcharge
Hypothetical example — not an actual client.
An Avon couple on Medicare plans a $15,000 Roth conversion that would lift income above the first Medicare surcharge threshold of $218,000. Resizing the conversion to $5,000 keeps them under it and avoids about $2,296 a year in premium surcharges — a cost that would not appear until 2 years later.
The household
George and Lisa Martin, ages 70 and 68, live in Avon. Both are enrolled in Medicare. Neither has reached required-distribution age, so conversions are still discretionary.
The problem
Medicare premiums are income-tested, and the test looks back 2 years. Ordinary brackets are steps — only income above the line is taxed at the higher rate. The Medicare surcharge is not a step. One dollar over the threshold applies the full surcharge for that tier, to both spouses, for a full year. A $15,000 conversion would take this couple from $210,000 to $225,000, past the line.
The strategy
- Resize the current-year conversion from $15,000 to $5,000, holding income at $215,000 — $3,000 below the threshold rather than exactly on it, so a late 1099 correction or a year-end fund distribution cannot trip the cliff.
- Defer the remaining $10,000 to a year with more room under the line.
- Weigh the surcharge against the conversion rather than avoiding it reflexively. A large enough conversion can be worth paying a surcharge tier to complete.
The arithmetic
- Projected income before conversion
- $210,000
- With the full conversion
- $225,000over the $218,000 threshold
- With the resized conversion
- $215,000$3,000 of headroom
- First-tier surcharge per person
- $1,148/yrtwo enrolled spouses
What it accomplishes
By resizing one conversion, George and Lisa avoid roughly $2,296 a year of Medicare surcharges — and they do it with margin to spare rather than by landing on the threshold. The remaining $10,000 of conversion capacity is not lost; it moves to a year with room.
Where this breaks down
- Surcharge tiers and premium amounts change annually. Figures reflect the 2026 tax year and must be re-checked before each conversion decision.
- Thresholds behave as cliffs, but appeals are available after life-changing events such as retirement or the death of a spouse. A household that crosses a threshold is not automatically stuck with the result.
- A conversion may still be worth doing after accounting for a surcharge. This illustration shows the trade-off being measured, not a rule that surcharges must always be avoided.
Rules and research referenced
- CMS — Medicare premium tiers and the two-year lookback
- Ed Slott — surcharge planning around conversion decisions
- Michael Kitces — surcharges inside effective marginal rate analysis
Hypothetical example — not an actual client. Figures reflect the 2026 tax year and were last reviewed 2026-08-18. Names, ages, balances, assumed rates and outcomes are illustrative and do not represent any actual client. They do not predict or guarantee results. Federal and Connecticut thresholds change, and Connecticut’s are set by budget act rather than indexed to inflation. This is general education, not tax, legal or investment advice for any individual — every situation requires its own analysis.