Q: I was told by a colleague of mine that she has to pay more than the $134 Medicare Part B premium. Why is this so?
A: Medicare has what they call an Income Related Monthly Adjustment Amount (IRMAA) that individuals whose modified adjusted gross income (MAGI) is above a certain amount are required to pay for Medicare Part B. MAGI, with few exceptions, is your adjusted gross income (from your tax return) plus any tax-exempt interest income you may have received.
Congress was clear about the purpose of IRMAA, when it was introduced in 2007; that purpose was “to reduce the federal subsidy” for Medicare Part B for higher income Medicare beneficiaries. The table below shows the monthly Medicare Part B premiums for 2017.
|Single filing status||Joint filing status||Premium|
|Less than $85,000||Less than $170,000||$134|
|Between $85,000 and $107,000||Between $170,000 and $214,000||$187.50|
|Between $107,000 and $160,000||Between $214,000 and $320,000||$267.90|
|Between $160,000 and $214,000||Between $320,000 and $428,000||$348.30|
|Over $214,000||Over $428,000||$428.60|
The dollar amounts were initially indexed for inflation, but the indexing was frozen for five years in 2010 to help fund Obamacare. After five years were up, Congress froze it again just for general principles.
As of the time of this response, Congress is talking about modifying (reducing) the Part B premium for those with MAGIs below $85,000 (single) and $170,000 (joint).