21% of Workers 60 and Older Are Skipping Medical Appointments Because of Cost. At 66, Her Side Job Could Raise Her Medicare Premiums Two Years Later

A recent WTW survey found that 21% of employees 60 and older delayed or skipped medical care because of cost. Take a hypothetical 66-year-old widow who starts freelance bookkeeping in 2026 to pay for dental work and a rising pharmacy bill. The extra money fixes this year’s budget. It can also raise her Medicare premiums in 2028, long after the dental bills are paid.

Most people with side jobs never run into this. CMS says income-related surcharges affect roughly 8% of people with Medicare Part B. In 2026, a single filer pays no surcharge with modified adjusted gross income (MAGI) of $109,000 or less, and joint filers have no surcharge up to $218,000. If your household income stays far under those limits, Medicare takes nothing extra from your side-job pay. The risk falls on people already close to the line, and a switch to single filing status can push widows there.

Every Side-Job Dollar Counts Toward Medicare’s Income Test

Medicare’s surcharge, called IRMAA, is based on modified adjusted gross income, or MAGI. That includes adjusted gross income plus tax-exempt interest, so even municipal bond income can count. Wages contribute to AGI, while freelance earnings generally count after business expenses and the deduction for half of self-employment tax. Medicare doesn’t distinguish between money earned for medical bills and money earned for other expenses.

Widowhood creates another complication. If her husband died in an earlier tax year and she no longer qualifies for joint or surviving-spouse filing status, she may now face Medicare’s lower income threshold for single filers. In 2026, that threshold is $109,000, compared with $218,000 for married couples filing jointly. Even if much of her retirement income remains intact, she has less room before Medicare’s income-related surcharges begin.

Her $20,000 Side Job Could Add $1,148 to Her Medicare Bill

Medicare looks back two years, so her 2026 tax return sets her 2028 premiums. CMS has not published 2028 brackets yet, so this example uses 2026 limits for illustration.

Say her pension, IRA withdrawals and taxable Social Security benefits give her $95,000 in MAGI. That leaves her $14,000 below the 2026 threshold. If her bookkeeping business adds another $20,000 to MAGI after applicable expenses and deductions, her income rises to $115,000, putting her $6,000 above the line.

Below the threshold, she pays the standard $202.90 Part B premium plus her Part D plan premium. Using the 2026 brackets, crossing $109,000 would raise her monthly Part B bill to $284.10 and add another $14.50 for Part D. That’s $1,148.40 in additional annual premiums. Her actual 2028 costs will depend on income thresholds and surcharge amounts that have yet to be revealed.

The Medicare surcharge is separate from the income taxes she owes on her bookkeeping profits. Social Security reviews income each year, so a temporary increase doesn’t necessarily mean permanently higher premiums. If her 2027 MAGI falls below the applicable threshold, she could return to standard premiums in 2029. IRMAA is only one of several Medicare surcharges that subtly tax retirement income, and we mapped out the rest in a free guide to Medicare’s hidden bills.

SSA-44 Relief Requires a Qualifying Life Change

Social Security allows Medicare beneficiaries to request a lower IRMAA after certain life-changing events that reduce income. These include marriage, divorce, the death of a spouse, stopping or reducing work, losing income-producing property, certain pension changes and qualifying employer settlement payments.

If she closes her bookkeeping business in 2027 and her income falls, she may qualify to have her 2028 premiums recalculated using more recent income information. She can request a new determination through Form SSA-44. Simply having an unusually profitable year, however, doesn’t qualify. Neither does a voluntary IRA withdrawal on its own.

Moves to Make Before December 31

1. Estimate your 2026 MAGI now. Add your expected AGI and tax-exempt interest. If you’re approaching the $109,000 single-filer threshold or the $218,000 joint-filer threshold, review any additional income you expect before December 31. The 2028 brackets aren’t available yet, but understanding where you stand can help you avoid an unexpected premium increase.
2. Consider retirement contributions. Her freelance income may allow her to contribute to a SEP-IRA or a traditional IRA, subject to contribution and deduction limits. Deductible contributions can lower AGI and potentially help her avoid a higher Medicare premium bracket. But a $20,000 bookkeeping profit won’t support an unlimited SEP contribution, and her eligibility for a deductible traditional IRA contribution depends on her circumstances. She should calculate how much she can contribute before assuming retirement savings will bring her income below the threshold.
3. Look at the whole trade. Even after income taxes, self-employment taxes and a potential Medicare surcharge, the bookkeeping income could leave her substantially better off. Skipping medical care to avoid higher premiums isn’t the answer.

She can keep earning, monitor her income and review her eligibility for IRMAA relief if she eventually stops working.

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