At 64, the Bank Will Lay Him Off in November. Medicare Will Price His First Premium on His $140,000 Salary Until He Files One Form

At 64, a single bank employee making $140,000 a year learns his job will end in November. He plans COBRA coverage and will enroll in Part B at 65. His paycheck stops in 2026. Medicare won’t register that for two more years.

Medicare’s income surcharge is generally determined by Social Security using tax returns from two years earlier. His 2027 Income-Related Monthly Adjustment Amount (IRMAA) reflects his 2025 return, which shows a full year of salary. His 2028 IRMAA comes from his 2026 return, showing about 11 months of salary plus severance. Unless he files Form SSA-44, Medicare can bill him at a high earner’s rate despite having no job.

What His Old Salary Costs Him in 2027

Medicare calls the surcharge IRMAA, which applies to about 8% people enrolled in Part B. Anyone filing individually with modified adjusted gross income (MAGI) at or below $109,000 pays the standard $202.90 monthly. A joint filer at or below $218,000 does too. If this banker were married with the same household income, he would pay the standard premium.

For IRMAA, MAGI equals adjusted gross income (Form 1040, line 11) and tax-exempt interest (line 2a) combined. Pretax 401(k) deferrals lower it; interest from tax-exempt bonds counts toward it. Assume his MAGI matched his salary.

CMS has yet to release the 2027 brackets, so the table below uses the latest 2026 figures:

At $140,000, he sits just above the $137,000 line in the second tier. Using 2026 rates, his Part B bill doubles to $405.80 monthly, a surcharge of $2,434.80 over a full year. Part D adds another $37.50 a month at that same income level. If 2027 indexing pushes the line above $140,000, he could fall into a lower tier, but the 2027 surcharge amounts have not been released yet. In either case, he can wind up paying for income he no longer makes.

The problem won’t fix itself in 2028, because that year’s IRMAA uses his 2026 return and nearly a full year of pay. At 2026 rates, a full year in the second tier costs $2,434.80 in Part B surcharges alone. If the same income pattern carries into another premium year, the cost keeps adding up (IRMAA is one of several Medicare bills tied to income from two years back, and we laid out the full set in a free guide to Medicare’s hidden costs).

How One Form Swaps Out the Old Tax Return

SSA-44 doesn’t erase other income. A Roth conversion or discretionary IRA withdrawal still counts in the newer MAGI figure Social Security uses after the layoff. Social Security later checks an estimate against the actual tax data and can adjust the surcharge if the numbers differ. He should keep 2027 withdrawals below the first threshold if he wants to stay out of IRMAA.

He won’t have a 2027 tax return when applying, so he provides an estimate. Social Security’s operations manual says a recipient without a current-year return “must provide us with an estimate for the more recent tax year”. He can add a second estimate for the next premium year.

For example, say his 2027 MAGI comes to $60,000 from unemployment benefits, a small IRA withdrawal and interest. That’s below the 2026 first-tier line, so he would pay the standard $202.90.

He needs two pieces of information:

• Proof of the event: a layoff letter or an employer statement showing his last day of work.
• An estimate of his lower MAGI for the year his premium is based on, signed under penalty of perjury.

SSA-44 only covers income that fell because of the layoff. It can’t undo a Roth conversion or discretionary IRA withdrawal. Social Security later checks his estimate against his actual return and bills for any shortfall. He should keep 2027 withdrawals below the first threshold.

Why Filing Late Means Losing the Money

He shouldn’t assume the system will fix this on its own. If Social Security approves a new determination for the current premium year, the adjustment can reach back to the first month he owed IRMAA that year, and excess premiums can be refunded. But once a premium year has passed, getting an earlier year reopened becomes much harder.

1. File SSA-44 when he enrolls in Part B, or the day the IRMAA notice arrives. Social Security accepts the request “any time after” the event and the drop in income. He can upload it through a my Social Security account, mail or fax it to a field office, or call 800-772-1213.
2. Submit a realistic 2028 estimate if his income will change. If he takes a new job or consulting work, a second estimate keeps his 2028 premium accurate. That avoids a surprise bill after Social Security checks his return.
3. Enroll in Part B during his initial enrollment period around his 65th birthday. COBRA doesn’t count as coverage from current employment, so he shouldn’t use it as a reason to delay Medicare enrollment at 65. If he enrolls late, he can face a permanent penalty on top of any IRMAA. Medicare explicitly tells people who already have COBRA when they become eligible for Medicare to enroll at 65; COBRA doesn’t extend the Part B enrollment window.

The layoff changes his income right away. The paperwork is what makes Medicare catch up.

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