Broker Check

Medicare Premiums Means Testing

| September 12, 2018

The standard Medicare Part B premium is $134 per month for the 2018 calendar year.  How-ever, some individuals and families may be subject to an Income Related Monthly Adjustment Amount (IRMAA) depending on their Modified Adjusted Gross Income (MAGI). 

The IRMAA is an extra charge added to your monthly premium and is determined by your MAGI reported on your tax return filed two years prior to the adjustment.  For example, your 2018 premiums were determined by the MAGI reported on your 2016 tax return. 

For 2018, the IRMAA impacts Medicare beneficiaries with a MAGI exceeding $85,000 (Single filing status) and $170,000 (Married Filing Jointly filing status) in 2016.

While the Tax Cuts and Jobs Act may provide favorable tax brackets for the ROTH Conversion strategy, it is important to consider the effects the additional income from the conversion may have on your MAGI and therefore future Medicare premiums. In addition to trying to keep your income below the next tax bracket, you may also want to consider keeping your income below the next threshold for Medicare proposes to avoid paying the IRMAA.