Social Security checks rose by 2.8% in 2026 thanks to the annual cost-of-living adjustment (COLA). But for a significant group of higher-income retirees, that increase may be quietly erased — or even reversed — by sharply higher Medicare premiums.
The reason: the Income-Related Monthly Adjustment Amount (IRMAA), a surcharge added to Medicare Part B and Part D premiums based on income from two years earlier. In some cases, the added cost can exceed $400 per month, and the money is deducted directly from Social Security payments.
Why this matters now
More than 70 million Americans receive Social Security benefits. While most pay the standard Medicare premium, IRMAA thresholds can catch retirees off guard — especially those who had unusually high income in 2024 from investments, asset sales, or delayed retirement earnings.
“For many people, this feels like a surprise tax on retirement,” said Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, speaking to Newsweek. “It generally only impacts higher earners, but when it does, the financial shock can be real.”
What is IRMAA and how does it work?
IRMAA was created under the Medicare Modernization Act of 2003 to shift more program costs to higher-income beneficiaries.
Key points:
- IRMAA applies to Medicare Part B (outpatient care) and Part D (prescription drugs)
- It is based on Modified Adjusted Gross Income (MAGI) from two years prior
- Income data comes directly from federal tax returns
- The surcharge is automatically deducted from Social Security checks
That means a retiree who had strong income in 2024 could see higher Medicare costs throughout 2026 — even if their current income is much lower.
2026 Medicare premiums at a glance
For 2026, the standard Medicare Part B premium is $202.90 per month, while Part D plans typically carry a separate premium set by insurers. IRMAA adds fixed monthly surcharges on top of those amounts.
2026 IRMAA income brackets (individual filers)
- Under $109,000 (2024 income):
Part B: $202.90 | Part D: $0 surcharge - $109,000–$137,000:
Part B: $284.10 | Part D: $14.50 - $137,000–$171,000:
Part B: $405.80 | Part D: $37.50 - $171,000–$205,000:
Part B: $527.50 | Part D: $60.40 - $205,000–$500,000:
Part B: $649.20 | Part D: $83.30 - Over $500,000:
Part B: $689.90 | Part D: $91.00
2026 IRMAA income brackets (joint filers)
- Under $218,000:
No IRMAA surcharge - $218,000–$274,000:
Part B: $284.10 | Part D: $14.50 - $274,000–$342,000:
Part B: $405.80 | Part D: $37.50 - $342,000–$410,000:
Part B: $527.50 | Part D: $60.40 - $410,000–$750,000:
Part B: $649.20 | Part D: $83.30 - Over $750,000:
Part B: $689.90 | Part D: $91.00
At the top tiers, combined Part B and Part D surcharges can approach — or exceed — $480 per month per person.
How IRMAA impacts Social Security checks
For retirees already receiving Social Security, Medicare premiums are deducted automatically before payments are sent.
“So you retire expecting one amount, and suddenly hundreds of dollars disappear each month,” said Michael Ryan, founder of MichaelRyanMoney.com. “Many retirees describe it as being blindsided.”
Unlike COLA increases, IRMAA adjustments are not gradual. A single dollar above an income threshold can trigger a steep jump in monthly costs.
Can retirees challenge IRMAA?
Yes. Beneficiaries can appeal an IRMAA determination if their income has dropped due to a life-changing event, such as:
- Retirement or reduced work hours
- Death of a spouse
- Divorce
- Loss of income-producing property
Appeals are handled through the Social Security Administration, not Medicare itself, and often require documentation.
The bottom line
For many retirees, the 2026 COLA increase will provide modest relief. But higher-income seniors should closely review their Medicare premiums — because IRMAA can quietly turn a raise into a pay cut.
Understanding how Medicare premiums interact with Social Security is now just as important as tracking COLA increases themselves.
Stay informed and plan ahead. Social Security remains a lifeline for over 71 million Americans — knowing your payment dates and any upcoming changes is key to staying financially secure. If you’re unsure about your benefits or need personalized guidance, visit SSA.gov or call 1-800-772-1213.
Stay informed and protect your health. Medicare and Medicaid provide essential coverage for over 150 million Americans — understanding your eligibility, benefits, and upcoming policy changes is vital to maintaining access to care. For personalized assistance or the latest updates, visit Medicare.gov, Medicaid.gov, or call 1-800-MEDICARE (1-800-633-4227).
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