Your Situation
I Have a Higher Income — What Does Medicare Cost Me?
With a higher income, you'll pay more for Medicare through a surcharge called IRMAA. In 2026, Part B alone ranges from $202.90 to $689.90 a month per person, depending on income. Some of that is out of your control — but with a little planning, a lot of people pay less than they would have.
How IRMAA Works in Plain English
It looks back two years. Your 2026 premiums are based on the income on your 2024 tax return.
Surcharges start above $109,000 for single filers and $218,000 for joint filers in 2026.
The brackets are cliffs. Going just $1 over a bracket means paying the full surcharge for that bracket — for the whole year.
Married and filing jointly? Each spouse on Medicare pays the surcharge.
There's a Part D surcharge too, even if your drug coverage is part of a Medicare Advantage plan.
Just Retired? You May Be Able to Lower It
Because of the two-year look-back, your first years on Medicare are often based on your working income. If your income dropped because of a life-changing event, you can ask Social Security to use your current, lower income instead with Form SSA-44.
You stopped working or cut back your hours
You married, divorced, or lost a spouse
You lost a pension or income-producing property
You received a one-time settlement from an employer
What doesn't qualify: a one-time spike you chose, like selling stock or a vacation home, or converting to a Roth IRA. Those count, and there's no appeal for them — which is why planning ahead matters.
Income That Can Catch You Off Guard
Roth conversions
A conversion counts as income in the year you do it. Because of the two-year look-back, conversions at 63 or later can raise your Medicare premiums.
Selling property, a business, or investments
Capital gains count toward the income Medicare uses — including the part of a home sale gain that isn't excluded from tax.
Required minimum distributions
Once required withdrawals from IRAs and 401(k)s begin, they can push your income up each year.
Tax-exempt interest
Interest from municipal bonds is added back in when Medicare figures your income, even though it isn't taxed.
Ideas like timing Roth conversions or giving to charity straight from an IRA can help, but they're tax decisions. Talk them over with your tax professional or financial advisor.
Does Income Change Which Plan You Should Pick?
IRMAA applies whether you choose Medicare Advantage or a Medicare Supplement, so it doesn't favor one path. What often changes is what people care about most. When the premium difference matters less to your budget, things like seeing any doctor in the country, predictable costs, and fewer prior approvals may matter more.
Still working past 65? Staying on a large employer's plan and delaying Part B can mean you don't pay IRMAA until you retire.
Still have questions? Talk with Marit.
Licensed Wisconsin agent in downtown Appleton. No cost to talk, no pressure to enroll.
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