Her Pension Pays Her Part D Premium. Medicare Still Pulls a $91 Monthly Surcharge From Her Social Security.

She retired from a long career with good benefits, and her former employer’s pension picks up her Medicare Part D drug premium. So when she scanned her first Social Security deposit of the year and saw a fresh $91 taken out on top of her usual Part B amount, she assumed it was a mistake. Her drug coverage was paid for. Why was Medicare reaching into her check for a prescription charge?

This shows up on retirement forums repeatedly. A woman writes in confused that her union plan covers Part D, yet a separate Medicare line item keeps draining from her benefit. She is meeting the Income-Related Monthly Adjustment Amount, known as IRMAA, and specifically the Part D version of it that almost nobody warns higher-income retirees about.

The plan premium and the income surcharge are two different bills

Here is the quirk. When a retiree health plan, union, or pension system pays a member’s Part D premium, they are paying the plan. The IRMAA surcharge is separate. It is owed by the retiree, to Medicare, based on his or her income. Medicare collects it by pulling it from their Social Security check or sending them a bill. The employer’s generosity does not touch it.

For 2026, the Part D IRMAA tiers run $14.50, $37.50, $60.40, $83.30, up to $91.00 a month, depending on income. That works out to roughly $174 to $1,092 a year on top of whatever the plan itself costs. A high-income retiree at the top tier pays the full $91 every month even if her drug plan premium is zero out of pocket.

The income Medicare uses comes from two years ago. 2026 surcharges are based on the 2024 tax return. As Suze Orman put it on the September 26, 2024 episode of Women & Money, “IRMAA is based on your modified adjusted gross income (MAGI) from two years prior. So they’re always looking back two years.”

And it works as a cliff. Cross the first threshold by a dollar and the full surcharge kicks in for the year. For 2026, the surcharges start when modified adjusted gross income on the 2024 return exceeds $109,000 for a single filer or $218,000 for a couple filing jointly.

Why this matters more than the drug plan itself

For a retiree whose Part D plan is already covered, the surcharge is the whole deal. She can shop drug plans all day and save nothing, because the line hitting her Social Security check is income tax policy wearing a Medicare uniform.

It also interacts with the rest of her income in ways that sneak up on people. A big Roth conversion in 2024, a property sale, a large capital gain, or an unusually fat required minimum distribution (RMD) can all push her over a bracket. She will not feel it until 2026, when the surcharge appears. The 2.8% cost-of-living adjustment (COLA) she got this year may subtly be offset by a surcharge tied to a one-time event two years back.

The good news: a one-time spike usually raises IRMAA for one year and then resets once the next tax return rolls through. And if the income jump came from a qualifying life event like retirement itself, the death of a spouse, divorce, or loss of pension income, Form SSA-44 lets her ask Social Security to use current income instead of the 2024 figure.

What to keep in mind

Two things are worth holding onto here.

1. If a former employer, union, or retirement system pays your Part D premium, that is a real benefit, but it does not shield you from the income surcharge. The surcharge follows your tax return.
2. Because Medicare is always looking two years back, the moves that matter most are the ones you make before a high-income year. A Roth conversion, an asset sale, or a withdrawal strategy timed without IRMAA in mind can cost a high-bracket retiree close to $1,092 in Part D surcharges alone, plus a larger hit on Part B.

Income, filing status, and timing all shift the picture, and the SSA-44 route is worth a phone call when a life change is the reason for the spike. The surcharge is rarely permanent, but it is rarely a surprise worth absorbing in silence either.