Clients call us regularly, and our Client Care team of folks are the ones who answer the phone and offer help with many questions. Clients are happy they can have a one-and-done conversation! Below is one experience our team was able to help with.
When Medicare Uses Your Old Income Data
Julie called and spoke to client care because she received a notice from CMS (Centers for Medicare & Medicaid Services) that she owed IRMAA (Income Related Monthly Adjustment Amount) because of her high income. Everyone's Part B and Part D monthly premium is based on their Adjusted Gross Income. If your income is over a certain threshold, there is an additional surcharge added to the premium. The IRS provides CMS with 2-year-old income data, which for Julie, reflected the income she made when she was working. Julie was frantic. She was now retired and would not make the higher income she had in previous years. So instead of paying the standard Part B rate, she would be charged significantly more, reflecting the additional surcharge based on her prior income.
"I am retired and won't make this much income going forward!" she exclaimed to client care. We explained to her that Medicare reviewed the Adjusted Gross Income, and the monthly premium for Part B and D would be adjusted up or down based on each year's tax return.
"But that means I have to pay this higher rate for a whole year?" she cried. Client Care calmed her by saying, "Since you retired, 'Loss of Income' is a reason to file an appeal for the surcharge." We promptly sent her a form to fill out and appeal the premium. Form SSA-44 is the Medicare Income Related Monthly Adjustment Amount Life Changing Event Form.
While going through the appeal process, we also advised her to pay the premium as it stood with the increased amount, as CMS would refund the difference once the appeal was successful.
Julie was relieved, saying, "I'm so glad you guys are always there to help me!"
Got issues and questions? Call us! We can help!
By American Retirement Advisors
American Retirement Advisors helps retirees and pre-retirees navigate Medicare, estate planning, and retirement income — so you can enjoy the retirement you've earned.
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Easy Eddie's Take
This story about Julie happens more often than you'd think. Here's what's important to know: Medicare's Income-Related Monthly Adjustment Amount (IRMAA) kicks in when your Modified Adjusted Gross Income exceeds certain thresholds. For 2026, that's $106,000 for individuals or $212,000 for married couples filing jointly. The tricky part is that the Centers for Medicare & Medicaid Services uses your tax return from two years ago, so recent retirees often get caught paying surcharges based on their old working salaries.
The good news is that "loss of income due to retirement" is one of eight qualifying life-changing events that lets you appeal your IRMAA determination. The Social Security Administration handles these appeals through Form SSA-44, and they typically process them within 30-60 days. You can also appeal for other reasons like marriage, divorce, or reduction in work hours. Most people are surprised when they learn this, but you should keep paying the higher premium during your appeal because Social Security will send you a refund check once it's approved.
Think of it this way: a little paperwork today can save you hundreds of dollars every month going forward. That's what makes getting help with Medicare 123easy.