Medicare, Social Security, and Insurance

4/6/2022 | By Sandra Block

Sandra Block, senior editor at Kiplinger’s Personal Finance magazine, explains the Medicare premiums and discusses how to avoid the Medicare surcharge and how to appeal this high-income charge if you are hit with it.

Most Medicare beneficiaries in 2022 pay the standard monthly premium of $170.10 for Part B, which covers doctors’ visits and outpatient services. But the higher your income, the more you will pay for Part B as much as $578.30 per month.

This high-income surcharge is called the income-related monthly adjustment amount or IRMAA.

And here are five ways to avoid the Medicare surcharge before it happens:

  1. If you’re still working, contribute to your 401(k) or other tax-deferred account (such as a SEP IRA, if you’re self-employed). Contributions will reduce your modified adjusted gross income (MAGI), which is used to calculate the surcharge.
  2. Factor in the potential for a one-year hike in Medicare premiums, along with the tax bill, when calculating the cost of converting tax-deferred money to a Roth IRA. (A conversion will increase your MAGI.) You may want to spread out a conversion over several years to reduce the hit to your income. Scott Stratton, a certified financial planner with Good Life Wealth Management, in Little Rock, Arkansas, says he works with clients to make sure the amount they convert doesn’t push them into a higher tax bracket, which reduces the likelihood the conversion will trigger the surcharge.
  3. If possible, avoid taking large, one-time withdrawals from your traditional IRAs or other tax-deferred accounts. Nadine Burns, a CFP in Ann Arbor, Michigan, says one of her clients triggered the surcharge after taking a large IRA withdrawal to buy an RV. The client probably would have been better off taking out a low-interest loan to finance the purchase and paying it off over time, she says.
  4. If you’re 70 1/2 or older, you can donate up to $100,000 a year from your IRAs to charity via a qualified charitable distribution, and after you turn 72, the QCD will count toward your required minimum distribution. A QCD isn’t deductible, but it will reduce your MAGI, which could help you avoid the surcharge.
  5. If you’re hit with capital gains in your taxable accounts, look for losses you can harvest to offset those gains. If your mutual funds have been paying large capital gains distributions, consider shifting to more tax-efficient exchange-traded funds.

Even if you are unable to avoid the Medicare surcharge are assessed the extra fee, you can appeal it. The surcharge is based on your MAGI from two years ago. If your income has dropped since then, say, because you retired, you can file an appeal with the Social Security Administration by filling out Form SSA-44, available at

How to appeal a surcharge

If you were unable to avoid the Medicare surcharge, here are some possible ways to appeal it after the fact.

Retirees are paying sharply higher premiums for Medicare Part B in 2022 – an increase of 14.5% from 2021. The price hike was even more jarring for seniors who are subject to the Medicare high-income surcharge ˆ also known as the income related monthly adjustment amount (IRMAA).

A calculator on top of U.S. bills and a bottle of medications, with Medicare on the calculator display

Although the standard monthly premium for Medicare Part B, which covers doctor’s visits and outpatient services, is $170.10, seniors who are hit with the surcharge will pay from $238.10 to $578.30, depending on their income. A surcharge, ranging from $12.40 to $77.90 per month, also applies to premiums for Part D, which covers prescription drugs.

Making matters worse, the IRMAA is a “cliff” surcharge. That means if your modified adjusted gross income (MAGI) exceeds the threshold by as little as a dollar, you will have to pay higher premiums. However, if your income has now dropped substantially, you can ask the Social Security Administration, which determines whether you must pay the surcharge, to reconsider it.

The Medicare surcharge is based on your MAGI from two years ago. For 2022, for example, the surcharge is based on your 2020 MAGI. For purposes of calculating the surcharge, MAGI consists of your adjusted gross income plus interest from tax-exempt municipal bonds.

A lot can happen in two years, and if you can demonstrate to Social Security that a “life-changing event” has affected your income, it will reduce or waive your premiums.

Related: Medicare open enrollment as a family discussion

The most common life change that leads to a reconsideration of the surcharge is retirement, says Jim Blankenship, author of A Medicare Owner’s Manual: Your Guide to Medicare Benefits. If you were working fulltime in 2020 and have since retired, you may qualify based on the decline in your income. You may also get a break if you’re working fewer hours than you were in 2020 or your spouse retired.

Other life-changing events that could lead to a reduction in your premiums include the death of a spouse or a divorce. However, if your surcharge was triggered by a one-time spike in income, you’re probably out of luck. A conversion to a Roth IRA, which will increase your MAGI, is one of most common reasons retirees get hit with a Medicare high-income surcharge, Blankenship says.

If you’re subject to the surcharge, you should receive a notice from Social Security known as an initial determination. To request a review, complete Form SSA-44, available at, and provide supporting documents.

You can mail the form and supporting documents to your local Social Security office or take it there in person. If Social Security denies your application, you have the right to request a hearing before an Office of Medicare Hearings and Appeals.

The next level, if you’re unsatisfied with the result, is the Medicare Appeals Council, then ultimately the federal appeals court. At that point, though, you’ll probably need a lawyer, and attorney fees may exceed the potential savings in Medicare premiums, particularly if they’re likely to go down next year.

© 2022 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.

Sandra Block

Sandra Block is a senior editor at Kiplinger’s Personal Finance magazine. For more on this and similar money topics, visit