Medicare Part D

How Higher Income Raises Medicare Premiums in Kingsport

KINGSPORT, Tenn. — If you're on Medicare and your income has crept up in recent years, an envelope from the Social Security Administration could land in your mailbox this fall with unwelcome news: a higher Part B and Part D premium for 2027.

Why higher earners are watching their mail this fall

That extra charge is called IRMAA — the Income-Related Monthly Adjustment Amount. It isn't a penalty, and it isn't tied to your health. It's simply an add-on premium that Medicare applies to beneficiaries whose reported income sits above a set threshold. With the Annual Enrollment Period running Oct. 15 through Dec. 7, this is the time of year when local retirees start comparing what they'll owe in 2027 — and IRMAA is often the surprise line item.

What IRMAA actually is

Most people on Medicare pay the standard Part B premium and whatever their Part D drug plan charges. IRMAA is an additional amount that gets tacked on to both of those premiums when your income is over the threshold. It's collected by Medicare (usually deducted from your Social Security check for Part B) rather than by your insurance company.

Two important points to keep in mind:

• IRMAA applies to both Part B and Part D. Even if you don't have a stand-alone drug plan, the Part D IRMAA can still apply if you have drug coverage through a Medicare Advantage plan.
• It's based on your tax return from two years ago. Your 2027 IRMAA will generally be based on your 2025 federal tax return — specifically your Modified Adjusted Gross Income (MAGI).

The income thresholds for 2027

For 2026, IRMAA surcharges begin above $109,000 for a single filer and $218,000 for a married couple filing jointly, based on 2024 income. From there, the surcharge climbs through several tiers — the more your income exceeds the threshold, the larger the monthly add-on for both Part B and Part D.

Medicare publishes the exact tier amounts each year on Medicare.gov once they're finalized. Because the top tiers apply to very high incomes, most people who trigger IRMAA land in the first or second bracket.

If you file "married filing separately" and lived with your spouse during the year, a separate, narrower set of rules applies — and the surcharge can kick in at a much lower income. That's a common trip-up worth flagging to a tax preparer.

The mistake to avoid: assuming IRMAA is permanent

Here's the part that catches Kingsport-area retirees off guard. IRMAA is recalculated every year. A one-time bump — selling a home, cashing out an IRA, taking a large Roth conversion, or a final year of high wages before retirement — can push you into IRMAA for just one year, then drop you back out the next.

If a life-changing event caused your income to fall since the tax year Medicare is using, you can ask Social Security to reconsider. Qualifying events include:

• Marriage, divorce, or death of a spouse
• You or your spouse stopping work or reducing hours
• Loss of income-producing property (not due to a sale)
• Loss or reduction of a pension
• An employer settlement payment from a closed or bankrupt plan

You file Form SSA-44 with supporting documentation. Don't just pay the higher amount assuming there's no appeal — many people qualify for relief and never ask.

How this connects to your local coverage choices

Kingsport is in Sullivan County, where Medicare beneficiaries have a range of Advantage and stand-alone Part D options to compare during Annual Enrollment. IRMAA doesn't change which plans are available to you, and it isn't charged by the plan — but it does change the true monthly cost of Part B and Part D once you're above the threshold.

When you're pricing out coverage for 2027, remember to look at the full picture: the plan's premium plus any IRMAA add-on Social Security will bill you directly. Two households with identical plan choices can end up paying very different totals because of IRMAA alone.

What else is changing for 2027

A few program-level updates worth knowing as you review your coverage:

• Part D out-of-pocket cap: $2,100 in 2026 and $2,400 in 2027. Once your out-of-pocket spending on covered drugs hits this amount, you pay nothing for covered drugs for the rest of the calendar year.
• Part D maximum deductible: $615 in 2026 and $700 in 2027. Individual plans can set a lower deductible, but not a higher one.
• The coverage gap ("donut hole") is gone. Part D now has three phases — deductible, initial coverage, and catastrophic — instead of four.
• Medicare Prescription Payment Plan. This optional program lets you spread your Part D out-of-pocket drug costs across monthly payments instead of paying them all at the pharmacy counter.