Medicare Part B and D premiums jump significantly in 2027 for higher-income beneficiaries. The Income-Related Monthly Adjustment Amount, or IRMAA, applies surcharges based on your modified adjusted gross income from two years prior. Your 2025 tax return determines what you'll pay in 2027.
The IRMAA thresholds climb each year. For 2027, single filers hit the first surcharge tier at $103,000 in modified adjusted gross income. Married couples filing jointly cross into surcharges at $206,000. These brackets rise roughly 2 percent annually to account for inflation.
The surcharges themselves grow steeper. In 2027, a single filer earning $103,000 to $129,000 pays an additional $17.70 monthly on Part B premiums beyond the standard $174.70 base premium. Top earners above $499,000 face an extra $70.80 per month. Part D premiums carry similar brackets, with surcharges ranging from $5.90 to $23.70 monthly depending on income level.
What triggers IRMAA calculation? Modified adjusted gross income includes wages, self-employment income, taxable interest, dividends, capital gains, and tax-exempt bond interest. Social Security benefits do not count toward IRMAA, but rental income and distributions from retirement accounts do.
The two-year lag matters. Your 2027 surcharges lock in based on 2025 income, not 2026 or 2027 earnings. This creates planning opportunities. If you expect a drop in income, the lag provides a window to make strategic moves. Conversely, if you just hit a higher tax bracket, you face surcharges now even if income drops later.
Higher earners can challenge