IRMAA in 2026: How High-Income Houston Retirees Calculate Their Medicare Surcharge (and Appeal It)

The standard 2026 Medicare Part B premium is $202.90 a month. If you are a Houston retiree with a higher income, you do not pay that. You pay anywhere from $284.10 to $689.90 a month for Part B alone — plus an extra surcharge on your Part D drug premium that ranges from $14.50 to $91.00. The mechanic that decides how much extra you owe is called IRMAA, the Income-Related Monthly Adjustment Amount, and it is one of the most expensive surprises in the Medicare program for high-income retirees in The Woodlands, Memorial, River Oaks, Sugar Land, and Bellaire.

This is a working guide to how IRMAA is actually calculated for the 2026 plan year, the exact 2026 income brackets and surcharges (sourced directly from SSA’s POMS HI 01101.020), what counts as Modified Adjusted Gross Income (MAGI) for this calculation, why your 2024 tax return is what determines your 2026 premium, and the specific situations under which you can — and should — file Form SSA-44 to ask Social Security to lower your IRMAA.

What IRMAA actually is — and why it exists

The Income-Related Monthly Adjustment Amount is a per-month surcharge that higher-income Medicare beneficiaries pay on top of their standard Part B and Part D premiums. It is not a tax. It is not a penalty. It is a cost-sharing escalator that Congress wrote into the Medicare statute so that wealthier beneficiaries pay a higher share of their actual program costs and lower-income beneficiaries pay a smaller share. CMS and the Social Security Administration jointly administer it.

The standard Part B premium is set at roughly 25% of average Part B program costs per beneficiary; CMS subsidies cover the other 75%. IRMAA reverses that subsidy at higher income tiers, so that the highest earners actually pay something closer to 85% of their share of costs. The dollar values move every year — both the income brackets and the surcharge amounts are adjusted annually by CMS — but the structure has been stable since the 2007 Medicare Modernization Act and the Affordable Care Act extensions.

About 7% of Medicare beneficiaries pay an IRMAA surcharge in any given year. That number is higher in Houston-area ZIPs with concentrations of retired physicians, energy-sector executives, attorneys, and small-business owners — neighborhoods like Memorial, Tanglewood, River Oaks, West University, Bellaire, the inner Loop, The Woodlands, and parts of Sugar Land and Katy.

How Modified Adjusted Gross Income (MAGI) is calculated for IRMAA

IRMAA tiers are defined in terms of Modified Adjusted Gross Income. MAGI for IRMAA is a specific definition — different from MAGI used for ACA premium tax credits, different from MAGI used for IRA contribution limits. The IRMAA version is:

This is a narrower definition than people often assume. It does not include:

• Unrealized capital gains on appreciated stock or real estate.
• Roth IRA distributions (qualified distributions are not in AGI).
• Health Savings Account distributions used for qualified medical expenses.
• Loan proceeds, including reverse mortgage withdrawals.
• Inheritances received (the inheritance itself, not subsequent income from inherited assets).

It does include — and these are the ones that trip up Houston retirees most:

• Realized capital gains — selling appreciated stock or a Houston rental property in a single year can pull a normally low-MAGI retiree into a high IRMAA tier for the year that gain shows on the 1040.
• Roth conversions — converting a Traditional IRA to a Roth is a taxable event and adds to AGI. A large conversion in 2024 directly drives 2026 IRMAA.
• Required Minimum Distributions (RMDs) — once you turn the RMD age, the forced annual withdrawals from Traditional IRAs and 401(k)s flow into AGI.
• Pension and annuity income — energy-sector pensions in Houston are common, and they push MAGI up year after year.
• Tax-exempt municipal bond interest — even though it is “tax-free” for federal income tax, IRMAA adds it back in.
• Social Security benefits — the taxable portion of Social Security flows into AGI for most Houston retirees.

2026 Part B and Part D IRMAA brackets — the full table

These are the official 2026 IRMAA tiers as published by SSA’s Program Operations Manual System (POMS) section HI 01101.020. The Part B amounts in the table are the total Part B premium at each tier (standard $202.90 plus the IRMAA surcharge). The Part D amounts are the add-on you pay on top of your stand-alone Part D plan’s regular premium (or your MA-PD plan’s drug-side premium).

Single, Head of Household, or Qualifying Surviving Spouse

Married Filing Jointly

Married Filing Separately (lived together at any point during the tax year)

Why 2026 IRMAA uses your 2024 tax return

SSA does not have access to your real-time income. It uses tax data from the IRS, and the most recently available federal return at the time CMS sets the next year’s premiums is two tax years prior. Practically, that means:

The two-year lookback is the source of most IRMAA frustration. A retiree who sold a Houston rental property in 2024 to fund retirement may have had a one-time MAGI spike from capital gains, even if their 2025 and 2026 income returns to normal. SSA will still use the 2024 number for the 2026 premium notice. Then, in late 2026, SSA pulls the 2025 return and recalculates 2027 — at that point, the lower 2025 income flows through and the surcharge drops back down.

The married-filing-separately trap

The married filing separately bracket structure is unusually punishing. Couples who file separately for any reason — second-marriage estate planning, separate professional liability concerns, Texas community-property complications — discover that the lowest IRMAA bracket above the standard premium does not even exist for them. Their second tier kicks in at $109,001 and applies a surcharge of more than $446 a month above the standard premium.

For Houston households where one spouse is a high-earning surgeon at the Texas Medical Center and the other is a retiree on Medicare, the filing-status decision can swing IRMAA by thousands of dollars a year for the Medicare-aged spouse. This is a tax-planning conversation worth having with a CPA — and worth re-running every year as filing-status options shift.

Appealing IRMAA with Form SSA-44 — life-changing events

SSA accepts appeals of IRMAA determinations when a “life-changing event” has caused your income to drop after the tax year SSA used. The appeal vehicle is Form SSA-44, “Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event.”

Eight life-changing events are explicitly listed on SSA-44 and are the only ones SSA will accept for an IRMAA reduction:

1. Marriage
2. Divorce or annulment
3. Death of your spouse
4. Work stoppage (you stopped working — full retirement)
5. Work reduction (you cut back significantly)
6. Loss of income-producing property due to disaster, theft, or other circumstances beyond your control (this can apply after a Harris County hurricane that destroys an income-producing rental property)
7. Loss of pension income
8. Employer settlement payment (e.g., a one-time severance that artificially inflated AGI in the lookback year, when current income is lower)

What does not qualify: a one-time Roth conversion you chose to do, a stock sale you elected to make, a planned RMD, or simply “my income went down.” SSA wants a documented life event with paperwork — a death certificate, a divorce decree, an HR retirement letter, a FEMA disaster reference number.

Houston scenarios: where IRMAA shows up

The energy-pension retiree in The Woodlands

A 67-year-old retiree from a major Houston-headquartered energy company, with a defined-benefit pension of $140,000 a year, $25,000 in Social Security, and $30,000 from RMDs, has a single MAGI around $195,000. That triggers the third IRMAA tier — $527.50 a month for Part B, plus $60.40 in Part D IRMAA. Annual extra cost vs. standard: roughly $3,895. If the same retiree’s spouse is also on Medicare, joint MAGI matters and they are likely in tier 1 or 2 — much lower.

The Memorial doctor selling a practice

A retiring Houston physician sells a private practice in 2024 with a $1.2M long-term capital gain on the sale of equity. Combined with normal income, the year’s MAGI exceeds $750,000. The 2026 IRMAA notice arrives in November 2025 showing $689.90/month Part B + $91.00 Part D add-on per spouse — about $18,706 a year for a married couple just on premiums. By 2027, with the practice sale a memory and W-2 income gone, MAGI returns to a normal range and IRMAA drops accordingly.

The Sugar Land widow on a survivor benefit

A widow with $58,000 in survivor pension income, $30,000 in Social Security, and $15,000 in dividends (single MAGI around $103,000) pays only the standard $202.90 — no IRMAA. But she should keep an eye on RMDs starting next year, which could push her over the $109,000 threshold. Pre-emptive Roth conversions earlier in life are a planning lever that some Houston widows use to keep future MAGI down.

Planning to avoid future IRMAA cliffs

For Houston pre-retirees in the 60–65 age band, IRMAA planning is mostly tax-bracket management. The levers that help:

• Roth conversions before age 63. A Roth conversion is a taxable event in the year it happens — but qualified Roth distributions in retirement are not. Converting traditional IRA dollars to Roth before the IRMAA-relevant tax year (for 2026 IRMAA, that is 2024) can keep future MAGI down indefinitely.
• Capital-gain timing. Spreading appreciated-asset sales across multiple tax years can keep each year’s MAGI under bracket cliffs.
• Qualified Charitable Distributions (QCDs). If you are 70½ or older, sending RMD dollars directly from an IRA to charity excludes them from MAGI entirely. For Houston retirees with active church or charitable giving, this can shave thousands off MAGI without changing total giving.
• Tax-exempt-bond awareness. Municipal bond interest counts for IRMAA even though it is federally tax-exempt. Pre-retirement portfolios heavily weighted to munis are not as IRMAA-friendly as they look.
• HSA accumulation. Pre-65 HSA contributions and qualified withdrawals never touch MAGI.

None of this changes how Medicare itself works — Part A, Part B, Part D, Medicare Advantage, and Medigap all function the same. But it changes how much you pay for them.

2026 IRMAA at a glance (Part B premium chart)

Houston-area context: what this means in Harris County

Harris County has more than 700,000 Medicare beneficiaries. The share who actually pay IRMAA is concentrated in higher-income ZIPs — 77024 (Memorial), 77005 (West University), 77019 and 77098 (River Oaks / Upper Kirby), 77381 and 77382 (The Woodlands), 77479 and 77498 (Sugar Land), 77094 (Energy Corridor), 77401 (Bellaire). Retired physicians, attorneys, energy executives, and small-business owners populate those tiers heavily, particularly in the early years of retirement when pension and RMD income stack on each other.

If you are a Houston pre-retiree with a one-time large income event coming up — selling a practice, exercising stock options, taking a partnership buy-out, settling a lawsuit — model the IRMAA impact a year before. The lookback structure means a 2026 sale flows into 2028 IRMAA. There is real money in spreading recognition across years and avoiding the single-year cliff.

For more on how Original Medicare and Medicare Supplements interact with the premium structure, see our Medicare overview, Medicare Plans page, and Medicare Supplement Plans resources.

Frequently asked questions

Kim Nguyen is a licensed insurance agent in Texas. This information is general guidance and not tax or legal advice. IRMAA brackets, surcharge amounts, and Part B premiums are set annually by CMS and SSA. Confirm your specific situation with SSA, your CPA, and a licensed insurance agent before making decisions.