This Little Known Provision Could Add Hundreds of $ to Your Medicare Premiums

August 21, 2025. IRMAA is not a hurricane, but it could have that effect on finances for higher income Medicare recipients who are not careful. The rule determines how much your Medicare Part B premiums will be beyond the base rate, based on your modified adjusted gross income (MAGI) from 2 years prior.

The standard monthly Part B premium in 2026 is expected to be $186.90. For married recipients with income over $216,000 the Part B premium will go up to $216, increasing through different brackets until taxpayers with MAGI over $750,000 will pay $635.50 per month.

Kiplingers has an article, “I Missed the 2 Year IRMAA Rule, Now My Medicare Premiums Are Soaring” which explains the problem.  IRMAA stands for income-related monthly adjustment amount, and it affects your Part B and Part Medicare premiums.

Ways to Reduce IRMAA impact

There are some ways to mitigate the increased Medicare premiums that come when MAGI goes beyond $216,000. And, while that is not a problem for most people, it can come into play quite easily for the taxpayers forced to take hefty Required Minimum Distributions (RMDs) as they go into their 80s and 90s. Distributions from non Roth IRAs and 401(k)s are taxable and included in MAGI.

• Try to structure payments before you turn 63 (2 years before you are eligible for Medicare), or have the money spread out over many years to keep from going over the IRMAA threshold. If that doesn’t cause you a problem with your other taxes, it will help keep you IRMAA lower.
• Maximizing deductible retirement contributions in your final working years can help keep taxable income lower.
• Likewise, being careful about which funds you withdraw from after age 63 can lead to substantial savings. Roth distributions do not count toward your MAGI; the same applies to savings and investments not in IRAs or 401(k)s.
• Delay taking Social Security as long as possible (until max of age 70). This will help keep IRMAA exposure lower until then, although the flip side is the higher benefit will add to it after that. But, the extra income will probably outweigh any extra premium you have to pay.

Other Mediare News: Budget Deficits Are Going to Cause Medicare Cuts

Despite promises of Republicans that they won’t touch Medicare, the trillion dollar deficits caused by their generous tax breaks to the top 10% of earners are going to lead to just that.

The Congressional Budget Office (CBO) reported that the increases in the national deficit caused by the budget reconciliation bill (“One Big, Beautiful Bill Act”) will trigger Medicare cuts of up to $491 billion from 2027 to 2034. Millions of people could be affected. That’s in addition to its cuts of almost a trillion dollars to Medicaid over the next ten years. The reason for the Medicare cuts come from the 2010 Statutory Pay-As-You-Go Act (S-PAYGO), which automatically triggers cuts to government programs if the budget deficit increases.

Bottom line

While it is always a good thing to have higher income, it can lead to extra Medicare premiums. Fortunately there are some strategies that can help to reduce that exposure. Does IRMAA apply to you, and if so what are you doing about it?