Since 2003, Medicare has forced those of higher incomes to pay more for Medicare Part B and Part D. Although not commonly known by its official name, this premium increase is called the Income-related Monthly Adjustment Amount, or IRMAA for short.

To determine who is subject to higher Medicare premiums, Social Security uses a special modified adjusted gross income (MAGI) — a total of tax-exempt interest added to adjusted gross income from one's income tax statement.

In 2018, the threshold for paying higher Medicare premiums is $85,000 for an individual filer and $170,000 for a couple. The additional amounts that an individual beneficiary pays per month ranges from $53.50 to $294.60 for Part B, and $13.00 to $74.80 for Part D.

Be aware: Social Security looks at the tax return two years prior to the current year. For example, Social Security reviewed 2016 tax returns to identify those who are subject to IRMAA in 2018. If a client's income is dramatically lower in the current year due to a life-changing event, that client may be able to have those IRMAA amounts reduced or eliminated altogether.

For more information about IRMAA, head to the "IRMAA Calculator" in the Resources section of i65. Use this simple, yet powerful, tool to help determine whether or not your client is subject to higher Medicare premiums and if a life-changing event notice could reduce these premiums.