Each year, usually in November or early December, those individuals enrolled in Medicare are informed by the Center for Medicare and Medicaid Services (CMS) as to how much their monthly Medicare Part B (medical insurance) and Medicare Part D (prescription drug coverage) premiums will be effective January 1 of the following year. Medicare Part B beneficiaries should shortly receive their CMS notices notifying them of their 2026 Medicare Part B monthly premium amounts.
This column discusses how CMS determines beneficiary monthly premiums and how beneficiaries can appeal those premiums.
Medicare Part B Monthly Premiums
READ: Should Federal Retirees Enroll in Medicare Part B?
What a Medicare Part B beneficiary pays in monthly premiums in a given year depends on the beneficiary’s modified adjusted gross income (MAGI) from two years ago. A beneficiary’s MAGI is the beneficiary’s adjusted gross income (AGI) plus any untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest. This means that the amount of Medicare Part B beneficiary’s 2026 monthly Medicare Part B premium is based on the beneficiary’s 2024 MAGI.
Those Medicare Part B beneficiaries who had higher MAGI during 2024 will pay more in 2026 monthly Part B premiums. Medicare Part B premium amounts are broken down by tax filing status and “income tiers.” Part B beneficiaries who are in a higher “income tier” (starting with the second “income tier”) pay an additional monthly premium called an “Income Related Monthly Adjustment Amount (IRMAA).” Table 1 presents the projected 2026 IRMAA and current year 2025 IRMAA.
Medicare Part D Monthly Premiums
READ: Should Federal Retirees Enroll in Medicare Part D?
Medicare Part D consists of privately run prescription drug plans that are partially funded through Medicare. The drugs covered by each plan vary, as does the cost for each drug. Each plan has a formula or list of drugs covered. Plans are required to include a range of drugs in prescribed categories to ensure Part D beneficiaries receive the medication they need. There are several types of payments that a Part D beneficiary must pay. Among the payments is a monthly payment owed to the insurance provider for Part D coverage. Like Medicare Part B, for those Part D beneficiaries with higher MAGI, there is an IRMAA, Table 2 presents the projected 2026 IRMAA and 2025 IRMAA for Medicare Part D.
Table 1: Summary of projected 2026 Medicare Part B monthly premiums (based on 2024 MAGI) for single and married filing jointly beneficiaries together with projected 2026 Medicare Part B IRMAA.
Table 2: Summary of projected 2026 Medicare Part D IRMAA (based on 2024 MAGI) for single and married filing jointly filing beneficiaries.
The following two examples illustrate the projected cost of monthly Medicare Part B premiums during 2026:
Example 1. Randi is a federal retiree aged 67 and enrolled in Medicare Parts A and B. During 2024, Randi’s MAGI was $145,700. Randi’s 2024 MAGI of $145,700 puts Randi in the third Medicare Part B “income tier bracket” for 2026. Randi is projected to pay $413.00 each month during 2026 for her Medicare Part B monthly premium.
Example 2. Dan, aged 67 and Melissa, aged 66 are a retired married couple, both of whom retired from federal service. Both are enrolled in Medicare Part B. During 2024, Dan’s and Melissa’s joint tax return showed a MAGI of $426,340. Since Dan’s and Melissa’s 2024 MAGI was between $410,000 and less than $750,000, Dan and Melissa are in the fourth Medicare Part B “income tier bracket” for 2026. This means that both Dan and Melissa are each projected to pay $660.80 in Medicare Part B monthly premiums during 2026.
How Does a Medicare Beneficiary’s Drop in Income Affect IRMAA?
The federal government is using the best income information it can in order to determine IRMAA. However, the federal government understands the system is flawed due to the delay in reporting and processing tax returns. The federal government reviews tax returns at the end of each year to determine IRMAAs for the following year. For example, the federal government in December 2025 will send out 2026 IRMAA letters to those Medicare Part B and Medicare Part D beneficiaries who are in second and above “income tier” brackets based on their 2024 MAGI.
A recipient of an IRMAA letter is eligible to appeal the IRMAA if the recipient had a “life-changing event” resulting in a decrease of income in the current year. This means that an IRMAA letter recipient in December 2025 whose income decreased significantly during 2025 as a result of a life changing event can appeal the IRMAA. Table 3 summarizes “life-changing events” for IRMAA appeals in order to reduce the amount of the IRMAA and therefore the Medicare Part B and Medicare Part D premiums.
Table 3. Life Changing Events for Appealing IRMAA
If a federal retiree currently enrolled in Medicare Part B and/or Medicare Part D and who had experienced a life changing event during 2025 that could result in their income decreasing to a lower Medicare “income tier” for 2026, is advised to complete and submit Social Security Administration Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount) (https://www.ssa.gov/forms/ssa-44.pdf) after receiving their IRMAA notice. A portion of Form SSA-44 (for 2024, to be updated in December 2025) is presented here:
It is possible that an individual during 2026 may need to appeal the IRMAA twice, once for the initial enrollment in Medicare Part B sometime early in 2025 and again in December 2025 for 2026 due to the delay in tax returns timing and processing. The following example illustrates:
Example 3. Carol, age 65, enrolled in Medicare Part B for the first time on June 1, 2025. At that time, Carol filed an appeal via Form SSA-44 for her 2025 IRMAA which was based on her 2023 MAGI. In December 2025, Carol may have to file another appeal for her 2026 IRMAA, based on her 2024 MAGI.
What Happens If an IRMAA Appeal Via Form SSA-44 Is Denied?
If a Medicare beneficiary’s IRMAA appeal via Form SSA-44 is denied (often due to the non-qualifying event), then the beneficiary has 60 days to pursue a formal reconsideration request (using Form SSA-561).
• Reconsideration (second level). A different SSA reviewer examines the beneficiary’s case. Success rate is typically low (20-30%).
• Administrative Law Judge (ALJ) hearing (third level). The beneficiary can request a hearing before an impartial judge. This is a complex process but has a higher success rate (40-50%) for valid claims that were denied due to bureaucratic errors.
Some Income Planning Suggestions to Minimize Future Year IRMAA
The following are some suggestions that current year and soon-to-be Medicare Part B and Medicare Part D beneficiaries can take in order to head off future year IRMAA:
• Factor in the potential for a one-year hike in Medicare premiums and additional taxes when calculating the cost of a Roth IRA conversion (and starting in 2026, converting portions of traditional TSP to Roth TSP). A beneficiary may want to spread a conversion over several years in order to reduce current year income. In particular, converting an amount in any year which does not push the beneficiary into a higher tax bracket, which reduces the likelihood the conversion will trigger IRMAA.
• If a beneficiary is still working with access to a qualified retirement plan (such as the traditional TSP or traditional 401(k) plan) contribute to the 401(k) or other tax-deferred account (such as a SEP-IRA, if self-employed). Contributions will reduce the beneficiary’s MAGI, which is used to calculate IRMAA.
• If possible, avoid taking large, one-time withdrawals from traditional TSP, traditional IRAs or other tax-deferred accounts.
• If age 70.5 or older, a beneficiary can donate up to $108,000 during 2025 ($115,000 for 2026) from traditional IRAs to charity via a qualified charitable distribution (QCD). Once a beneficiary reaches his or her traditional IRA required beginning date (currently age 73), a QCD will count toward the beneficiary’s required minimum distribution (RMD). As such, the RMD will then not be included in MAGI.
• If a beneficiary is hit with capital gains (a result of selling capital assets in taxable brokerage accounts) then the beneficiary should look for capital losses that can be harvested to offset capital gains. If a beneficiary’s mutual funds have been paying large capital gains distributions, then the beneficiary should consider shifting to more tax-efficient exchange-traded funds.