How to appeal your Medicare premium surcharge after income changes

Your Medicare Part B premium statement arrives, and the number makes you do a double-take. Instead of the standard premium, you're now paying hundreds of dollars more each month.

You're most likely facing an Income Related Monthly Adjustment Amount (IRMAA) premium surcharge based on your income from two years ago—income that no longer reflects your current financial reality.

If you've experienced a major life change that significantly reduced your income, you don't have to accept these higher premiums. You have the right to appeal, and the process, while detailed, is straightforward when you understand the steps.

Why you might be paying more than necessary

IRMAA is an additional premium that higher-income Medicare beneficiaries pay on top of standard Part B and Part D premiums. The challenge is that Medicare calculates these surcharges using your Modified Adjusted Gross Income (MAGI)—essentially your adjusted gross income plus any tax-exempt interest—from two years prior.

This two-year lookback creates a timing problem. If your 2023 tax return showed high income, you'll pay IRMAA premiums in 2025, even if your financial situation changed dramatically in 2024 due to retirement, divorce, job loss, or other major life events.

The additional costs can be substantial. Depending on your previous income level, IRMAA can increase your Medicare premiums by 40% to over 200% above standard rates. For many people, this represents hundreds of dollars in extra monthly expenses that continue until corrected.

Life changes that qualify for appeals

The Social Security Administration recognizes eight specific life-changing events that may allow you to appeal your IRMAA:

Work-related changes:

• Complete retirement or job loss - You stopped working entirely
• Reduced work - You moved from full-time to part-time, took a pay cut, or had your hours reduced
• Loss of income-producing property - You suffered a loss of real estate or other property due to arson, disaster,   fraud, or theft; sale of the property does not count for this event
• Loss of pension income - Your pension was terminated or reduced

Family changes:

• Marriage - Your new household income situation differs significantly from when you filed as single
• Divorce or annulment - Your legal marriage has ended, and you will not file a joint return this year
• Death of spouse - You've lost your spouse's income

One-time payments:

• Employer settlement payments - You received a one-time settlement, typically due to bankruptcy or reorganization, that artificially increased your income in a previous year

The key requirement: these events must have occurred after the tax year Medicare is using for your current IRMAA calculation, and they must have resulted in a significant reduction in your MAGI.

Understanding the appeal process

Don't let fear of making mistakes prevent you from appealing. The process is designed to be accessible, and taking action is far better than continuing to overpay premiums month after month.

Step 1: Gather your documentation

 Collect evidence that proves your life-changing event occurred and how it affected your income. Examples include:

• Letters from employers confirming retirement or job changes
• Final pay stubs showing your last day of work
• Divorce decrees or death certificates
• Documentation showing the statement of loss of property
• Letters confirming pension changes
• A copy of your tax return, or an estimate of your MAGI

Step 2: Complete the official form

Use Form SSA-44, the Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event form. This form asks for specific information about what happened and how it affected your income.

The form isn't complicated, but be thorough and accurate. You'll need to estimate your current year's MAGI based on your new circumstances. Don't guess—base your estimate on actual numbers like your retirement income, Social Security benefits, and any remaining investment income.

Step 3: Submit everything together 

Send the completed form along with your supporting documentation. Social Security needs both the form and proof of your life-changing event to process your appeal.

Step 4: Wait for the decision 

Appeals typically take 30-90 days to process. If approved, your IRMAA adjustment may be retroactive to the date of the event, which often means you'll receive a refund for premiums you overpaid.

Avoiding common concerns and mistakes

Don't delay Medicare enrollment: Some people mistakenly think they can avoid IRMAA by delaying their Medicare Part B enrollment. This is almost always a costly mistake. Late enrollment penalties for Part B are permanent and typically cost more over time than temporary IRMAA surcharges. If you're eligible for Medicare, enroll on time and appeal the IRMAA if your circumstances qualify.

Don't assume automatic adjustments: Social Security doesn't automatically adjust IRMAA when life changes occur. The appeal process is required even for obvious situations like retirement or divorce.

Don't delay your appeal: You can submit an IRMAA appeal at any time, but sooner is better. Every month you wait is another month of unnecessary premium overpayment.

The technical details that matter

Income projections: When estimating your current year MAGI, be realistic rather than optimistic. Base your projections on your actual new circumstances—retirement income, Social Security benefits, reduced investment income, etc. Social Security wants accurate estimates, not wishful thinking.

Documentation requirements: Official documents carry more weight than personal statements. A letter from HR confirming your retirement date is better than your own written explanation.

Multiple years: Some life changes affect multiple years of IRMAA calculations. If you retired in mid-2023, you might be able to appeal both your 2024 and 2025 IRMAA if your income remains significantly lower.

Taking action with confidence

IRMAA appeals exist specifically for situations like yours. Social Security recognizes that the two-year lookback period can create unfair premium calculations when major life changes occur. The appeal process is meant to help in these situations.

If you're unsure whether your situation qualifies, it's often worth submitting the appeal. The worst outcome is that Social Security says no, but you'll have lost nothing except the time to complete the form. The potential savings—hundreds of dollars per month in reduced premiums—make the effort worthwhile.

Many people successfully navigate this process on their own, but don't hesitate to ask for help if you need it. The form and process are straightforward, but the stakes are high enough that getting assistance makes sense if you're uncertain about any aspect.

Your next steps

Download the SSA-44 form and review the requirements. Gather documentation of your life-changing event and its impact on your income. Complete the form carefully, attach your supporting documents, and submit your appeal.

Our team is happy to help with any specific questions you have about the process. We can review your circumstances, help ensure your appeal is complete and accurate, and guide you through any complications that arise.