Medicare Part B Premium

Medicare Part B covers physician services, outpatient care, medical equipment, preventive services, and most things that happen outside a hospital. The monthly premium for 2026 is approximately $185/month ($2,220/year) for most beneficiaries — but higher-income enrollees pay significantly more through IRMAA (Income-Related Monthly Adjustment Amounts). IRMAA is calculated based on your Modified Adjusted Gross Income from two years prior (so 2026 premiums are based on 2024 income), and surcharges range from an additional $70/month to over $400/month for the highest-income beneficiaries. This two-year lookback creates planning opportunities and traps: a large Roth conversion or capital gain in 2024 can trigger unexpected higher premiums in 2026. For retirees with IRAs, managing MAGI — through Roth conversions, charitable distributions, and capital gain timing — can save thousands in annual Medicare premiums. Part B also has an annual deductible (~$257) and a 20% coinsurance requirement with no out-of-pocket maximum, meaning a serious illness can cost tens of thousands without supplemental coverage (Medigap) or enrollment in Medicare Advantage.

Current Law (2026)

Medicare Part B covers physician services, outpatient care, medical equipment, and preventive services. Most beneficiaries pay a standard monthly premium, with higher-income beneficiaries paying income-related surcharges (IRMAA).

Income-Related Monthly Adjustment Amount (IRMAA)

Higher-income beneficiaries pay surcharges based on Modified Adjusted Gross Income (MAGI) from two years prior (2024 income for 2026 premiums).

IRMAA brackets are inflation-indexed but historically have not kept pace with income growth, capturing more beneficiaries over time.

Legal Authority

• 42 U.S.C. § 1395j — Establishment of supplementary medical insurance program for the aged and disabled (Part B)
• 42 U.S.C. § 1395k — Scope of benefits (covered services under Part B)
• 42 U.S.C. § 1395l — Payment of benefits (coinsurance, deductible, and payment amounts)
• 42 U.S.C. § 1395r — Amount of premiums
• 42 U.S.C. § 1395r(i) — Income-related monthly adjustment (IRMAA)

How It Works

IRMAA uses a two-year income lookback: your 2026 Part B premiums are based on your 2024 Modified Adjusted Gross Income, which SSA receives directly from the IRS via inter-agency data match. You don't submit anything unless your income has changed since then. A large Roth conversion, capital gain realization, or one-time income event in 2024 — even if your income is back to normal in 2025 and 2026 — creates a two-year IRMAA surcharge. This is the most common Medicare planning surprise for retirees doing Roth conversions: an $80,000 conversion in 2024 can trigger $74–$111/month in additional premiums starting in 2026. The IRMAA tier structure has sharp cliff effects — crossing a bracket boundary by one dollar increases your annual per-person premium by $888–$1,332.

When your income has permanently dropped since the lookback year — due to retirement, divorce, death of a spouse, work reduction, or loss of income-producing property — you can appeal IRMAA using Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount — Life Changing Event). Submit the form with documentation and your estimated current income, and SSA can reduce your IRMAA tier prospectively. Appeals for qualifying life-changing events are commonly approved. Important: a market downturn, investment losses, or voluntary asset sales do not qualify — only the enumerated events in § 418.1205 apply. File SSA-44 promptly when the event occurs, not at year-end.

The hold-harmless rule protects most existing beneficiaries from Part B premium increases exceeding their Social Security Cost-of-Living Adjustment. If your COLA increases $40/month but Part B's standard premium rises $55/month, your increase is capped at $40 and the federal government absorbs the difference. This protection does NOT apply to new enrollees in their first year on Medicare, IRMAA payers, beneficiaries not yet receiving Social Security payments, or Medicaid dual-eligibles.

Beneficiaries already receiving Social Security at 65 are automatically enrolled in Part B — the premium is deducted from your Social Security check. If you're not yet receiving Social Security at 65 (because you delayed claiming), you must actively enroll during your Initial Enrollment Period — the 7-month window centered on your 65th birthday month. Failing to enroll without creditable employer coverage triggers a permanent 10% late enrollment penalty for each 12-month period of delayed enrollment — a surcharge that persists for life. Part B covers physician services, outpatient surgery, lab tests, imaging, ambulance, durable medical equipment, mental health services, and preventive care (wellness visits, cancer screenings, vaccines) — generally at 80% after the annual deductible, with no out-of-pocket maximum, which is why most beneficiaries add Medigap or Medicare Advantage coverage.

How It Affects You

State Variations

Medicare Part B premiums are federal and uniform nationwide. States do not supplement or modify them. However:

• Medicare Savings Programs: States administer programs (QMB, SLMB, QI) that pay Part B premiums for low-income beneficiaries
• Medicaid dual-eligibles: States pay the Part B premium for beneficiaries enrolled in both Medicare and Medicaid

Implementing Regulations

• 42 CFR Part 408 — Premiums for Supplementary Medical Insurance (49 sections — CMS rules governing the mechanics of Medicare Part B premium amounts, payment obligations, late enrollment penalties, and the process for premium deduction from Social Security and other federal benefit payments):

  Premium Amounts and Adjustments (Subpart A, §§ 408.20–408.28):

  • § 408.20 — Standard monthly premium: CMS publishes the standard monthly premium annually; the statute sets a formula targeting beneficiary contributions at 25% of expected per-capita Part B program costs; the current standard premium (~$185/month for 2026) applies to all enrollees not subject to IRMAA
  • § 408.22 — Late enrollment penalty: beneficiaries who delay enrolling in Part B past their Initial Enrollment Period without qualifying coverage face a permanent surcharge of 10% of the standard premium for each full 12-month period they could have enrolled but did not; this penalty continues for life — a 3-year delay adds a permanent 30% surcharge; the penalty applies to each period of non-coverage independently
  • § 408.28 — IRMAA (income-related monthly adjustment amount): beneficiaries with MAGI above the statutory threshold pay a monthly surcharge in addition to the standard premium; CMS establishes IRMAA tiers annually using IRS income data for the year two years prior to the coverage year; the adjustment ranges from ~$74 to ~$443/month per person above the standard rate (2026 figures), with up to five IRMAA tiers depending on income level; for joint filers with MAGI above ~$750,000, both members of a couple pay the top-bracket surcharge
  • § 408.27 — Rounding: premium amounts that are not a multiple of 10 cents are rounded to the nearest 10 cents (and up if exactly halfway); this rounding rule applies to the standard premium, IRMAA adjustments, and late enrollment surcharges independently before they are combined

  Payment Methods and Deduction (Subparts B and C, §§ 408.4–408.68):

  • § 408.4 — Payment obligation: premiums are due for each month beginning with the first month of enrollment; premiums must be paid even for months when no Part B services are used
  • § 408.6 — Priority of payment methods: (1) deduction from Social Security benefits is the default for beneficiaries receiving SS; (2) deduction from Railroad Retirement Board annuities (§ 408.42); (3) deduction from civil service annuities (§ 408.44); (4) direct remittance by the beneficiary if no federal benefit is available for deduction
  • § 408.40 — Automatic deduction: CMS instructs SSA to withhold the premium from the monthly SS benefit; beneficiaries receiving SS do not pay separately — the premium is deducted before the SS benefit is deposited
  • § 408.60 — Direct remittance: beneficiaries not receiving Social Security or other federal benefits that allow automatic deduction must pay their Part B premium directly to CMS, either monthly or quarterly; CMS mails bills to these enrollees; failure to pay triggers a termination process under § 408.100

  Termination for Non-Payment (Subpart D, §§ 408.100–408.110):

  • § 408.100 — Termination for nonpayment: if a direct-remittance enrollee fails to pay premiums, coverage terminates at the end of the calendar quarter following the calendar quarter in which the unpaid premiums first became overdue; CMS must give notice before terminating
  • § 408.102 — Reinstatement: a terminated enrollee may be reinstated if they pay all overdue premiums plus the current month's premium within a specified period; reinstatement without a gap in coverage requires payment within the termination quarter; reinstatement after the termination date requires a new enrollment with the associated re-enrollment waiting periods
  • § 408.200 et seq. — State/local government buy-in agreements: state Medicaid agencies and some local government programs may enter bulk enrollment and payment agreements with CMS covering their beneficiaries' premiums; these agreements allow Medicaid to pay Part B premiums for dual-eligible beneficiaries automatically through an inter-governmental billing mechanism rather than requiring each beneficiary to arrange individual payment

• 20 CFR Part 418 — Medicare Subsidies — SSA's regulations governing IRMAA administration (138 sections across 3 subparts; implementing § 1839(i) of the Social Security Act; SSA is the agency that actually determines and adjusts individual IRMAA amounts, acting on IRS income data and beneficiary appeals):

  • § 418.1005 — Purpose: IRMAA exists to reduce the federal subsidy of Medicare Part B for beneficiaries with MAGI above the threshold — Congress set the subsidy reduction on a sliding scale so higher-income beneficiaries cover a larger share of actual program cost
  • § 418.1101 — IRMAA defined: the amount you pay in addition to the standard monthly premium; SSA adds it to your Part B premium and deducts the combined amount from your Social Security benefit (or bills you directly if not receiving Social Security)
  • § 418.1135 — IRS data source: SSA generally uses MAGI from the IRS return filed for the tax year two years before the coverage year (so 2026 premiums use 2024 tax data); SSA receives this data directly from IRS via inter-agency data match — you don't file anything unless your income has changed
  • § 418.1140 — IRS correction: if IRS later provides different MAGI data than what SSA initially used, SSA will recalculate IRMAA and either refund an overpayment or collect an underpayment
  • § 418.1145 — No IRS data: if IRS has no data (e.g., you didn't file a return), SSA uses the most recent prior year for which data exists, or may determine IRMAA based on information you provide
  • § 418.1150 — Amended returns: you may provide an amended tax return (within 3 calendar years of the tax year's close) and SSA will recalculate IRMAA based on the amended figure
  • § 418.1201 — Life-changing event appeals: you can request SSA use a more recent tax year when a qualifying major life-changing event caused a significant income reduction; file Form SSA-44 with documentation
  • § 418.1205 — What qualifies as a major life-changing event: death of spouse, marriage, divorce or annulment, work stoppage (retirement from employment or self-employment), work reduction (significant reduction in work hours), loss of income-producing property (disaster, fraud, or other involuntary loss), loss or reduction of pension income, employer settlement payment — these are the only qualifying events; a stock market crash, investment losses, or voluntary asset disposal do not qualify
  • § 418.1210 — What does NOT qualify: events that reduce investment income without an underlying qualifying life event (e.g., a bad year in the market, selling a home at a loss voluntarily) are not life-changing events for IRMAA purposes
  • § 418.1215 — Significant reduction standard: the income reduction must be large enough to move you to a lower IRMAA bracket (or out of IRMAA entirely); a reduction that leaves you in the same bracket produces no change in IRMAA and is not "significant" for these purposes
  • § 418.1250–1265 — Evidence requirements: for a work-stoppage appeal, SSA needs proof of the end of employment (retirement letter, final pay stub, or employer statement); for death of spouse, the death certificate or SSA's own records; for divorce, the divorce decree; for loss of income-producing property, documentation of the loss event

  The operational split between SSA and CMS in IRMAA administration is worth understanding: CMS determines the IRMAA bracket thresholds and premium levels (published annually in the Federal Register); SSA collects the IRS income data, determines each beneficiary's individual IRMAA amount, processes SSA-44 life-changing event appeals, and deducts premiums from Social Security payments or bills beneficiaries directly. An IRMAA appeal goes to SSA (not CMS), and a beneficiary who disagrees with SSA's determination can request a hearing before an SSA administrative law judge. The same income thresholds and appeal process apply to Part D IRMAA (governed by Subpart C of 20 CFR Part 418, which references the same life-changing event definitions and evidence standards).

Pending Legislation (119th Congress)

• HR3007 — Medicare Protection Act (Rep. Kiley, R-CA) — Stops home-sale capital gains from counting toward Medicare IRMAA premium calculations, protecting sellers from temporary premium surcharges
• S1640 — Medicare Patient Access and Practice Stabilization Act (Sen. Marshall, R-KS) — Temporary 8.51% Medicare Part B payment increase for specific services (June-Dec 2025) to support provider access
• S1996 — Medicare Audiology Access Improvement Act (Sen. Warren, D-MA) — Adds audiology services to Medicare coverage; lets qualified audiologists bill directly
• HR1221 — Social Security and Medicare Lock-Box Act (Rep. Walberg, R-MI) — Sets aside Social Security and Medicare Part A surpluses in protected accounts; creates commission to study non-Treasury investments
• HR 6455 — Count Medicare premiums of household members toward deductions, expanding the tax benefit of Part B premiums. Status: Introduced.
• IRMAA reform: Proposals to adjust brackets for inflation more aggressively or add more gradual tiers to reduce cliff effects.
• Part B premium cap: Some proposals would cap premium growth to the Social Security COLA.

Recent Developments

• 2026 standard Part B premium set at $202.90/month (November 2025): CMS announced the 2026 standard Medicare Part B premium — an increase from $185.00 in 2025, representing a $17.90/month rise. The annual Part B deductible increased to $257 (from $240 in 2025). For the 7.5 million beneficiaries subject to IRMAA surcharges, the 2026 income brackets increased slightly with inflation: individuals with 2024 MAGI above $106,000 pay additional amounts ranging from $73.90 to $443.90/month above the standard premium. Beneficiaries who believe their 2026 income will be lower than their 2024 income used for IRMAA can file Form SSA-44 to request a reduction.
• CY 2026 Physician Fee Schedule cut reversed by Congress: The November 2025 final rule initially reduced physician payments by approximately 2.8% for CY 2026 due to the budget neutrality adjustment required by the Medicare Physician Payment schedule. Congress passed a year-end budget patch restoring approximately 2.5% of the cut — continuing the annual cycle of temporary "doc fixes" that have characterized physician payment policy since the SGR era. The patch does not resolve the underlying structural problem; physicians face continued uncertainty about annual payment rates.
• Part B drug price negotiation — GLOBE model proposed: CMS proposed the Global Benchmark for Efficient Drug Pricing (GLOBE) model in December 2025, which would test international reference pricing for certain Part B drugs (administered in physician offices and hospital outpatient settings). Part B drug spending has grown faster than overall Medicare because oncology drugs, biologics, and infused medications are billed under the Part B fee schedule at average sales price (ASP) + 6%. GLOBE would cap payments at a percentage of international reference prices for selected high-cost drugs.
• IRMAA lookback and appeal process — increasing beneficiary use: More Medicare beneficiaries are filing SSA-44 appeals of IRMAA determinations as 2022-2023 income (the lookback years for 2024-2025 IRMAA) reflected pandemic-era one-time income events — Roth conversions, asset sales, business income. SSA processes IRMAA reduction requests based on a "life-changing event" (marriage, divorce, death of spouse, work reduction/cessation, loss of income-producing property, employer settlement). The 2-year lookback means a financially difficult 2026 won't reduce 2026 IRMAA — it will reduce 2028 IRMAA. File SSA-44 as soon as the qualifying event occurs, not at year-end.