Medicare Part D Carries Its Own IRMAA Surcharge of Up to $91 a Month on Top of Part B, Taken Straight From Your Social Security Check
Most retirees carefully budget for the Medicare Part B surcharge and then watch their Social Security deposit come in lower than expected anyway, because a second hidden surcharge was quietly running in the background the entire time.
When most people learn about Medicare IRMAA surcharges, they often hear about Part B first. The income-related premium hikes that happen with doctor and outpatient coverages are often the first to get discussed in retirement circles. Not to mention, these are the same conditions that can push a monthly premium from $202.90 all the way up to $689.90.
What doesn’t get mentioned as often is Part D, or the prescription drug coverage side of Medicare, which has its own separate IRMAA surcharge. The thing to remember here is that this surcharge also comes out of your Social Security check the exact same way Part B does.
As a result, most people take their time and research what kind of charges they will get with Part B and plan for this number. However, when their Social Security deposit comes the next month, it feels off, as in being lower than they had expected. The reason? They weren’t planning for the Part D surcharge, which had been running in the background the whole time.
What the Part D Surcharge Actually Looks Like in 2026
The Part D surcharge is what applies after you see that your modified adjusted gross income, better known as MAGI, crosses certain thresholds. In 2026, any individual with a MAGI of $109,000 or less, or a married couple filing jointly with a MAGI of $218,000 or less, will not have to pay a Part D surcharge.
However, if your MAGI goes above those income levels, the story changes completely. In 2026, the monthly amount starts at $14.50 for income above $109,000 and up to $137,000, and it rises to $37.50 for any income above $137,000 up to $171,000. The story gets more expensive when you are charged $60.40 for income above $171,000 all the way up to $205,000.
When you go above $205,000 in MAGI, the next tier is even harder to swallow, as it hits $83.30 monthly if your income goes all the way up to $500,000. After the income level crosses the $500,000 mark, you can reach the maximum surcharge of $91 per month. For married couples filing jointly, the income limit is a bit higher for the $91 surcharge, as the top MAGI tier starts at $750,000.
The important part is that the $91 is not your total Part D premium; it is the IRMAA surcharge that is added to your plan’s premium. So if your prescription drug plan charges $40 a month, someone in the highest IRMAA tier would pay $131 a month for Part D.
Why It Comes Out of Social Security
This is where the numbers start to matter. The same income that triggers Part B IRMAA can also trigger a Part D IRMAA. Social Security says that if you have both Part B and prescription drug coverage and your income is above the applicable threshold, you pay the income-related adjustments for both.
At the highest income level in 2026, Part B carries a $487 monthly IRMAA on top of the standard $202.90 premium. Part D adds another $91 a month. Together, that is $578 a month in IRMAA alone. Over 12 months, this comes to $6,936.
This still does not include the standard Part B premium or the premium charged by your Part D plan. If you are a retiree who has spent years trying to build up a predictable income plan, it’s easy to miss this surcharge. Even if you think you know exactly to the dollar what your Social Security benefit is supposed to be, the deposit that is received may be smaller because Medicare premiums are taken out of Social Security checks before being deposited into any bank accounts.
The Centers for Medicare and Medicaid Services says Part D IRMAA is deducted from Social Security benefit checks or paid directly to Medicare. Part D plan premiums themselves can be handled differently depending on how the beneficiary chooses to pay.
The Income That Causes It
If there is something you really need to pay attention to, it’s that the income that determines your 2026 Part D surcharge is based on your 2024 MAGI, and that number is more than most people realize. This number is likely going to include any wages you have earned, self-employment income, any IRA or 401(k) distributions, capital gains, taxable Social Security benefits, rental income, and even tax-exempt municipal bond interest.
To be fair, the one that consistently surprises most people is the tax-exempt municipal bonds, because the bonds themselves are actually federal income tax-free holdings, but the trick is that they still play a role in the MAGI formula.
What this means in reality is that any single large financial event that takes place in 2024, including selling property or taking a big IRA distribution or Roth conversion, can play a role in creating a Part D surcharge in 2026 that you will still be paying for two years after it happened. There is a good chance you may have even forgotten about this event when the bill shows up.
What You Can Do About
Let’s say your income has dropped significantly because of some kind of life-changing event like retirement, the death of a spouse, divorce, or loss of work. You can still appeal your 2026 IRMAA determination using Form SSA-44. The good news is that the Social Security Administration will then look at more recent income information rather than using a two-year-old return. Better yet, the form isn’t all that complicated, and if you are someone who has seen significant income changes in the last 24 months, it’s worth the time to complete this form.
On the planning side, you can look at the same strategies that helped with Part B IRMAA and apply them to Part D because they both use the same MAGI calculation. For example, spacing Roth conversions over multiple years rather than doing them all at once, or using qualified charitable distributions to satisfy RMDs without those amounts hitting adjusted gross income, as well as being intentional about when you look to realize your capital gains, can all help keep income from crossing a threshold.
The main point here is that if you are trying to model your Medicare costs when you retire, Part D has to be in the picture alongside Part B. The two surcharges use the same income calculation, come out of the same Social Security check, and can add up to more than most retirees anticipate when they first see numbers side-by-side.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
