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Medicare and income: surcharges above, help below, and the appeal in between
Short answer: income changes what Medicare costs you in both directions. Above $109,000 single or $218,000 joint, you pay a surcharge called IRMAA that can more than triple your Part B premium, based on a tax return from two years ago. Below roughly 135% to 150% of the federal poverty level, programs exist that pay your Part B premium outright and cut drug costs to a few dollars. Both ends are widely misunderstood: high earners do not realize the surcharge is appealable after a life change, and people who qualify for help overwhelmingly do not apply.
Key takeaways
- IRMAA surcharges begin above $109,000 single or $218,000 joint, based on your tax return from two years earlier.
- At the top bracket, the 2026 Part B premium rises from $202.90 to $689.90 a month, plus a Part D surcharge.
- IRMAA is appealable with form SSA-44 after retirement, widowhood, divorce, or loss of income-producing property.
- Below roughly 135% of poverty, Medicare Savings Programs can pay your Part B premium entirely.
- Extra Help cuts drug costs to a few dollars and reaches people up to roughly 150% of poverty; many states are more generous.
The surcharge brackets
| 2024 income: single / joint | 2026 Part B monthly | Part D surcharge |
|---|---|---|
| $109,000 or less / $218,000 or less | $202.90 | None |
| Above $109,000–$137,000 / $218,000–$274,000 | $284.10 | +$14.50 |
| Above $137,000–$171,000 / $274,000–$342,000 | $405.80 | +$37.50 |
| Above $171,000–$205,000 / $342,000–$410,000 | $527.50 | +$60.40 |
| Above $205,000–under $500,000 / $410,000–under $750,000 | $649.20 | rising toward the top tier |
| $500,000 or more / $750,000 or more | $689.90 | +$91.00 |
2026 brackets, based on 2024 tax returns. Married filing separately has its own thresholds. The 2027 brackets arrive with the CMS fall announcement, which had not been published as of October 12, 2026.
Two features make IRMAA sting. It is a cliff, not a phase-in: one dollar over a threshold moves you into the whole next bracket. And it uses income from two years ago, so it typically arrives the year after a house sale, a Roth conversion, or a final year of full-time work. Full detail in the IRMAA article, and the reason it shows up as a smaller Social Security deposit is in that article.
How income is counted
The measure is modified adjusted gross income: your AGI plus tax-exempt interest. That means the following count: wages, self-employment income, pensions, IRA and 401(k) withdrawals, capital gains, dividends, rental income, taxable Social Security, and municipal bond interest. These do not count: Roth IRA withdrawals, qualified charitable distributions from an IRA, return of principal, and the proceeds of a loan. The practical consequence is that two retirees with identical lifestyles can pay very different Medicare premiums depending on which accounts they draw from, which is why this is a planning question and not just a reporting one.
Appealing the surcharge
If a life-changing event has reduced your income since the tax year being used, file form SSA-44 and ask Social Security to use current income instead. The qualifying events include work stoppage or reduction (which covers retirement, and is therefore the most common and most missed), the death of a spouse, marriage or divorce, loss of a pension, loss of income-producing property, and employer settlement payments. Attach proof, such as a retirement letter or a death certificate, and file as soon as the determination letter arrives. This is free, routine, and granted regularly; the reason people miss it is simply that nobody tells them it exists.
Note what does not qualify: a one-time capital gain from selling a house or investments is not a life-changing event, even though it is exactly the thing that pushed you over. That makes it a planning problem instead, which the last section covers.
Help at the other end
| Program | What it pays | Roughly who qualifies |
|---|---|---|
| QMB | Part B premium plus deductibles, coinsurance and copays; providers may not bill you | Around or below 100% of the federal poverty level |
| SLMB | The Part B premium | Roughly 100% to 120% of poverty |
| QI | The Part B premium | Roughly 120% to 135% of poverty; funded annually, so apply early each year |
| Extra Help (LIS) | Most Part D costs: premium, deductible, and copays down to a few dollars | Up to roughly 150% of poverty, with a full subsidy tier |
| Medicaid | Varies by state; can cover long-term care Medicare does not | State-specific income and asset rules |
Limits are set annually, are higher in Alaska and Hawaii, and several states apply more generous rules or no asset test at all. Qualifying for a Savings Program generally brings Extra Help automatically.
The dollar value is substantial and immediate: the Part B premium alone is $202.90 a month, roughly $2,435 a year, and because it is withheld from Social Security, approval shows up as a larger deposit. Detail in the Savings Programs guide and Extra Help. The single most common reason eligible people do not apply is assuming they earn too much, which is a guess worth replacing with an application.
Planning around the thresholds
- Watch the two-year lookback when timing a Roth conversion, a property sale, or a large IRA withdrawal. The Medicare consequence lands two years later.
- Mind the cliff. Near a threshold, a few hundred dollars of extra income can cost well over a thousand dollars in surcharges across the year.
- Use the sources that do not count where you can: Roth withdrawals and qualified charitable distributions.
- File SSA-44 the year you retire. Retirement is a qualifying event, and the surcharge based on your working income is contestable.
- If your income is modest, apply for everything. Being told no costs nothing; SHIP counselors will do the paperwork with you free.
Questions people also ask
What are the Medicare income limits for 2026?
How does Medicare determine my income?
Can I appeal a Medicare income surcharge?
What are the income limits for Medicare help?
Does selling my house affect my Medicare premiums?
Sources for this article
- CMS.gov2026 Medicare premiums and deductibles: the IRMAA brackets and premium amounts.
- SSA.govForm SSA-44: requesting a reduction after a life-changing event.
- Medicare.govMedicare Savings Programs: the programs that pay premiums and cost sharing.
Figures checked against these sources on October 12, 2026. We update within days when CMS publishes new amounts.
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