What if your Medicare premiums are higher not because of your current income—but because of something that happened two years ago?
Many retirees are surprised to learn that Medicare premiums are calculated using income from two years prior. If your income temporarily increased due to an event such as retiring, selling a business, or receiving severance, you may be paying higher Medicare premiums even after your income has declined.
In certain situations, Medicare allows individuals to request a review of those premiums. Understanding the IRMAA reconsideration process can help ensure healthcare costs better reflect your current financial circumstances.
What Is IRMAA?
IRMAA stands for Income-Related Monthly Adjustment Amount, an additional surcharge applied to Medicare Part B (medical insurance) and Part D (prescription drug coverage) for individuals whose income exceeds certain thresholds.
For example, in 2026 IRMAA applies if Modified Adjusted Gross Income (MAGI) from 2024 exceeds $109,000 for individuals or $218,000 for married couples filing jointly. The standard Medicare Part B premium in 2026 is $202.90 per month, with surcharges ranging from $81.20 to $487 per month depending on income level. Source: SSA.gov
For retirees managing multiple income sources, these adjustments can meaningfully increase annual healthcare expenses.
When IRMAA Reconsideration May Apply
If income has declined due to a qualifying life-changing event, you may be eligible to request a reconsideration of your premiums.
Examples may include:
- Retirement or a significant reduction in work hours
- Sale or closure of a business
- Loss of income-producing property
- Divorce or the death of a spouse
- Certain employer settlements or severance payments
In these cases, the income used to determine Medicare premiums may no longer reflect your current financial situation.
How the Reconsideration Process Works
To request a review, individuals typically complete Form SSA-44, available through the Social Security Administration. The form documents the qualifying event and provides an estimate of current and future income.
Supporting documentation—such as a retirement letter, business sale agreement, or updated income estimates—is generally required. Requests can usually be submitted by mail, in person, or through a local Social Security office.
If approved, adjustments generally apply going forward rather than retroactively.
Why This Matters for Your Retirement Plan
Healthcare expenses are a major component of retirement spending. When IRMAA surcharges are combined with taxes and portfolio withdrawals, they can affect overall cash flow.
For many households, Medicare planning becomes part of a broader conversation about retirement income, tax efficiency, and long-term financial stability. Reviewing IRMAA eligibility can help ensure premiums align with your current income rather than a temporary spike from the past.
A Coordinated Approach to Medicare Costs
IRMAA reconsideration is not guaranteed, but understanding the process may help retirees avoid paying higher premiums than necessary.
At VestGen, we help clients integrate Medicare decisions into their broader retirement strategy—coordinating income timing, tax planning, and healthcare costs with long-term financial goals.
If you’ve experienced a meaningful change in income and are facing higher Medicare premiums, speaking with a VestGen advisor may help clarify whether reconsideration is worth exploring.