Medicare couple keeps paying IRMAA after job loss, told to file form to lower premiums

Even after employment income disappears, Medicare's income-related surcharge may not. That lag sent one couple to Reddit for guidance.

After one spouse lost a job and both stopped working, they wondered when they could finally stop paying their Income-Related Monthly Adjustment Amount, or IRMAA.

Here's what to know

On Reddit, a married couple on Medicare said one spouse was laid off in June and received severance, and that neither of them is employed now. Despite that, they wrote, "Currently paying IRMAA on Medicare, supplemental and drug prescription insurance premiums."

Several replies pointed them toward Form SSA-44. One commenter wrote, "You don't have to wait — file Form SSA-44 now. Work stoppage is one of the life-changing events Social Security accepts for recalculating IRMAA."

The thread also explained why the surcharge can keep showing up after a layoff: "IRMAA is normally set from your tax return two years back, which is why you're still paying on income you no longer have."

Commenters also corrected one point about what IRMAA applies to. One person wrote, "There is no IRMAA on medigap supplement." Others said the surcharge applies to Medicare Parts B and D, not Medigap plans.

More background

IRMAA is determined using modified adjusted gross income from a prior tax year. Because of that look-back, a family can lose wages and still see higher Medicare premiums until Social Security recalculates the amount.

The goal is to reduce or remove that surcharge if current income has dropped enough to fall below the IRMAA thresholds.

In the discussion, commenters said a job loss or work stoppage can be the kind of change Social Security considers. They also noted that the agency may rely on an estimate of current income, which is why severance can make things trickier since it still counts as income in the year it is paid.

The original poster raised that exact concern, replying, "We figured we would want the IRMAA to be removed in 2027 due to the severance package. Living off of that and small pension of mine."

What can be done?

Most practical advice focused on filing SSA-44 promptly and estimating income carefully. Commenters said that estimate should include severance, investment income, and unemployment insurance when applicable.

People in the thread said documentation requirements are not always the same. One commenter shared, "I got an IRMAA reduction this yr and didnt have to provide any documentation. Just had to complete the form." Others said Social Security may still request records showing that a job ended.

There was also a warning about getting the estimate wrong. Another commenter wrote that if someone reports a life-changing event with inaccurate earnings, "it will be caught in the next IRMAA match with the IRS."

"But the abrupt job loss puts us in a different position now," the original poster wrote.

Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.