How to help Medicare clients appeal IRMAA surcharges after income changes

Your client calls, frustrated. Their Medicare Part B premium just jumped by hundreds of dollars, and they want to know why.

Truth is, they're paying an Income Related Monthly Adjustment Amount (IRMAA) premium surcharge based on income from two years ago—income that no longer reflects their current circumstances after retirement, divorce, or another major life change.

This is exactly the kind of problem-solving opportunity you need to demonstrate your expertise, provide value to your clients, and earn a few more referrals.

Understanding IRMAA and why appeals matter

IRMAA is a premium surcharge that affects Medicare beneficiaries whose Modified Adjusted Gross Income (MAGI)—essentially their adjusted gross income plus tax-exempt interest—exceeds certain thresholds. For this purpose, MAGI is calculated using tax information from two years prior, which creates a timing problem when someone's financial situation changes dramatically.

Here's the foundation every agent should understand: Medicare uses a two-year lookback period for IRMAA calculations. If your client's 2023 tax return showed high income, they'll pay an IRMAA surcharge in 2025, even if their income dropped significantly in 2024.

The premium surcharge applies to both Medicare Part B and Part D, and the additional costs can range from roughly 40% above standard premiums to over 200% for the highest income brackets. For many retirees, these surcharges represent a significant, unexpected expense that continues month after month until corrected.

Recognizing appeal opportunities for your clients

The Social Security Administration recognizes eight specific life-changing events that may qualify someone for an IRMAA appeal:

Income reduction events:

• Work stoppage - An employee either retired fully or suffered complete job loss
• Work reduction - An employee faced a reduction in hours or salary
• Loss of income-producing property - Your client suffered a loss of real estate or other property due to arson, disaster,   fraud, or theft; sale of the property does not count for this event
• Loss of pension income - Your client lost their pension payments, or the plan was reorganized

Family status changes:

• Marriage - Your client entered a legal marriage
• Divorce or annulment - Your client's legal marriage ended, and a joint return will not be filed for the year
• Death of spouse - Your client's spouse died, removing their income from calculations

Settlement payments:

• Employer settlement payments - Your client received a one-time payment, due to either bankruptcy or reorganization, that artificially inflated the previous year's income

The key insight is that these events must have occurred after the tax year used for the current IRMAA calculation and must have resulted in a significant reduction in the client's MAGI.

The practical appeal process

When you identify a potential appeal opportunity, guide your clients through this process:

Step 1: Gather documentation

 Help clients collect evidence of their life-changing event and its income impact. This might include:

• Retirement letters or final pay stubs
• Divorce decrees
• Death certificates
• Medical records (for disability-related work stoppage)
• An insurance adjustment's statement of loss
• Pension termination letters
• A copy of their tax return or an estimate of their MAGI

Step 2: Complete Form SSA-44

The Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event form is the official appeal document. The form requires specific information about the life-changing event and current income projections.

Step 3: Submit supporting evidence 

Include documentation, gathered in step one,  that proves both the occurrence of the life-changing event and its impact on income. Social Security needs to verify that the event happened and understand how it affected the client's financial situation.

Step 4: Follow up appropriately

 Appeals typically take 30-90 days to process. If approved, IRMAA adjustments may be retroactive to the date of the event, often resulting in refunds for overpaid premiums.

The technical considerations

Timing matters:  Clients can appeal IRMAA at any time, but the sooner the better. Delaying the appeal means continued overpayment of premiums.

Income projections: The appeal process requires either a copy of a tax return or an estimate of the current year's MAGI. Help clients understand that Social Security wants realistic projections, not optimistic hopes. Base estimates on actual circumstances—retirement income, Social Security benefits, investment income, etc.

Documentation standards: Social Security requires official documentation, not just client statements. A letter from HR confirming retirement carries more weight than a client's word alone.

Multiple-year impacts: Some life-changing events affect multiple years. A client who retired mid-2023 might appeal both their 2024 and 2025 IRMAA calculations if their income remains significantly lower.

Common mistakes to avoid

Don't delay Medicare enrollment: Some clients mistakenly think they can avoid IRMAA by delaying Part B enrollment. This creates late enrollment penalties that are typically more costly long-term than the temporary IRMAA surcharge.

Don't assume automatic adjustments: Social Security doesn't automatically adjust IRMAA when life changes occur. The appeal process is required even for obvious situations like retirement or divorce.

Don't appeal frivolous cases: Appeals should be based on genuine, significant income reductions. Minor decreases or temporary fluctuations typically won't qualify for IRMAA relief.

Making this work for your practice

IRMAA reviews should be part and parcel of your appointments with higher-income clients.  When reviewing their situations each year, make sure to ask about income fluctuations. Many clients don't realize appeals are possible or assume the process is too complicated.

But, you know better. Saving your clients hundreds -- or thousands -- of dollars in premiums each year can go a long way toward building loyalty and a referral network.

Keep the SSA-44 form readily available and bookmark the submission process. When clients face IRMAA issues, you want to respond immediately with expertise and resources, not scramble to research the topic.

Next steps

Download the official SSA-44 form and get to know its contents. Review your current Medicare clients' situations for potential appeal opportunities—many may already be overpaying.

For complex cases or questions about specific client situations, our individual team is always standing by.