{"id":3682,"date":"2023-10-20T13:05:30","date_gmt":"2023-10-20T13:05:30","guid":{"rendered":"https:\/\/infundpros.com\/news\/avoiding-irmaas-hit-to-your-wallet-worth-the-effort\/"},"modified":"2023-10-20T13:05:31","modified_gmt":"2023-10-20T13:05:31","slug":"avoiding-irmaas-hit-to-your-wallet-worth-the-effort","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=3682","title":{"rendered":"Avoiding IRMAA’s Hit To Your Wallet: Worth The Effort?"},"content":{"rendered":"
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Introduction<\/h2>\n

The Income-Related Monthly Adjustment Amount<\/strong><\/em>, referred to as IRMAA, was first enacted in 2003 as part of the Medicare Modernization Act, and then first applied four years later. It originally applied only to high-income enrollees of Medicare Part B, but in 2011, IRMAA was expanded under the Affordable Care Act to include high-income enrollees in Medicare Part D. While it applies to Advantage policy premiums, I couldn\u2019t confirm if it applies to Part B Gap policies also.<\/span><\/p>\n

Since most of us value our time, the answer to the title questions appears to be that investors should worry about other parts of their finances as the potential savings for a couple appears to top out at $3000 for any year. I do suggest reading on as there are useful strategies discussed that might justify the time and effort to execute them. Look at avoiding some IRMAA costs as a bonus. Unless you are just over one of the IRMAA income thresholds, odds are you will not drop down a bracket anyway.<\/span><\/p>\n

That disclaimer aside, the Life Events<\/strong> section<\/strong><\/em> could apply to your situation if you retired within two years of enrolling into Medicare.<\/p>\n

IRMAA bracket changes<\/h2>\n

A great change started in 2020 when the income thresholds for IRMAA surcharges became inflation adjusted (finally). With the two-year look back for income, this benefits those who might be caught by the calculation, especially if inflation is running high. The brackets and surcharges are adjusted based on the Consumer Price Index for Urban Consumers (CPI-U). <\/span>In 2018, the Bi-Partisan Budget Act created a 5th IRMAA<\/strong> bracket, with the stipulation that this new bracket would not be increased for inflation until at least 2028.<\/p>\n

To give readers an idea of how things have changed over time, I built this table using data pulled from IRMAA Solutions.<\/p>\n

<\/span><\/p>\n\n\n\n\n\n\n\n\n
Year<\/td>\nLowest IRMAA<\/td>\nMC “B” cost<\/td>\nIRMAA cost<\/td>\nIRMAA “D” cost<\/td>\nHighest IRMAA B<\/td>\nHighest IRMAA D<\/td>\n<\/tr>\n<\/thead>\n
2007<\/td>\n$160-200k<\/td>\n$93.50<\/td>\n$12.30<\/td>\nNA<\/td>\n$67.90<\/td>\nNA<\/td>\n<\/tr>\n
2011<\/td>\n$170-214<\/td>\n$115.60<\/td>\n$45.90<\/td>\n$12.00<\/td>\n$253.50<\/td>\n$69.10<\/td>\n<\/tr>\n
2015<\/td>\n$170-214<\/td>\n$104.90<\/td>\n$42.00<\/td>\n$12.30<\/td>\n$230.80<\/td>\n$70.80<\/td>\n<\/tr>\n
2019<\/td>\n$170-214<\/td>\n$104.90<\/td>\n$84.70<\/td>\n$12.34<\/td>\n$323.70<\/td>\n$77.40<\/td>\n<\/tr>\n
2022<\/td>\n$182-228<\/td>\n$170.10<\/td>\n$68.00<\/td>\n$12.40<\/td>\n$408.20<\/td>\n$77.90<\/td>\n<\/tr>\n<\/table>\n

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