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IRMAA and Medicare Part B Costs in Sioux Falls 2026: What Higher-Income Beneficiaries Need to Know

The surcharge most people never see coming — and why a $0-premium Medicare Advantage plan doesn't protect you from it.

Big Sioux Benefits Data Desk

Published June 26, 2026 · 10 min read · Sourced from CMS.gov / SSA.gov

If your income is above $106,000 (individual) or $212,000 (joint), Medicare Part B costs more — automatically, silently, and regardless of which plan you pick. That's IRMAA, and it surprises more beneficiaries in Sioux Falls than almost any other Medicare cost rule. This article explains exactly how it works, shows the full published bracket table, and connects it to the real 2026 plan landscape in Minnehaha County.

The bracket figures in this article come from the CMS 2025 Medicare Parts B Premiums fact sheet and SSA's IRMAA guidance — the most recently published official schedule. Annual amounts change; verify the current year at SSA.gov before making enrollment decisions.

What IRMAA is — and how SSA calculates it

Medicare Part B has a standard monthly premium set by CMS each year. In 2025, that standard is $185.00/month. Most beneficiaries pay exactly that. But Congress built in an income adjustment: if your Modified Adjusted Gross Income (MAGI) exceeds certain thresholds, the Social Security Administration adds a surcharge to your Part B bill. That surcharge is IRMAA.

A few mechanics that catch people off guard:

• SSA uses IRS data automatically. You don't fill out a form to trigger IRMAA — SSA pulls your tax return from two years ago and applies the schedule without a request from you.
• The lookback is two years. For coverage starting in 2026, SSA looks at your 2024 tax return (filed in spring 2025). If you retired in 2025 and your income dropped sharply, that doesn't affect your 2026 IRMAA — but it does affect 2027.
• IRMAA is deducted from Social Security. If you draw Social Security, it comes out before you see your check. If you're not drawing Social Security yet, SSA bills you directly (quarterly).
• IRMAA covers Part B AND Part D. Both carry separate income-adjusted surcharges at the same income tiers.

The Part B IRMAA bracket table (2025 published schedule)

Here is the full 2025 Medicare Part B premium schedule by income tier, based on the CMS/SSA November 2024 announcement:

Source: CMS 2025 Medicare Parts A & B Premiums and Deductibles (Fact Sheet) (November 2024). Verify current-year amounts at SSA.gov — amounts are reset each fall.

At the top tier, a single beneficiary earning above $500,000 pays $$628.9/month for Part B alone — $$5,327 more per year than a standard beneficiary. Even at the first tier ($106,001–$133,000 individual), the extra cost is $$888/year — not trivial when you're comparing plan premiums.

Part D IRMAA: the second surcharge most people forget

IRMAA doesn't stop at Part B. If you have any Medicare drug coverage — a stand-alone Part D plan or an integrated Medicare Advantage drug plan — SSA adds a separate Part D surcharge at the same income tiers. These surcharges apply on top of your plan's own premium (which is paid to the insurer), not instead of it:

Source: Medicare.gov — Medicare costs (including income-related monthly adjustments) (2025 schedule). Part D surcharges are also reset annually — confirm at SSA.gov.

A Tier 2 beneficiary (individual income $133,001–$167,000) pays $35.30/month extra for Part D coverage, regardless of which drug plan they enrolled in. Add that to their $370.00 Part B premium, and their baseline Medicare cost before any plan premium is $405.30/month. That's the number that matters — not the plan's headline premium.

IRMAA + the Sioux Falls plan landscape: your real monthly cost

Here is how IRMAA interacts with the five standard Medicare Advantage PPOs available to Minnehaha County beneficiaries in 2026. These plan premiums are real 2026 CMS figures — but your actual monthly Medicare cost must add your IRMAA tier on top:

Source: Plan premiums from CMS Medicare Advantage / Part D Landscape (PY2026); IRMAA from CMS Fact Sheet.

The $0 vs. $80 plan premium difference becomes much smaller relative to IRMAA. At Tier 3 IRMAA, every beneficiary's Part B is $480.90/month — making that $80/month plan premium gap feel much narrower. This is why, for higher-income beneficiaries, the comparison should focus more on deductibles, out-of-pocket maximums, and formulary coverage rather than plan premiums.

How the 2-year income lookback works — and why 2024 income matters right now

IRMAA uses what CMS and SSA call a two-year lookback. For 2026 Medicare coverage, SSA uses your 2024 MAGI (your 2024 federal tax return, filed in 2025). Here's the full chain:

This lag matters in a few common Sioux Falls scenarios:

• Recent retirees. If you retired in late 2025 after a high-income career, your 2026 Medicare bill still reflects your 2024 working income. The lower retirement income only affects 2028 (when SSA uses your 2026 return).
• Roth conversions. Converting traditional IRA funds to a Roth raises MAGI for that year, which can push you into a higher IRMAA tier two years later — even if your ongoing income doesn't change. Coordinate Roth conversion timing with your financial advisor.
• Business sales and capital gains. A one-time income spike from selling a business, farm, or investment property in Sioux Falls can push you into IRMAA for two years, then drop you back out. Plan accordingly.
• Death of a spouse. If your filing status changed from joint to single, your income threshold drops — potentially triggering IRMAA or pushing you into a higher tier. This is also an LCE eligible for appeal.

Appealing IRMAA: life-changing events that can reduce your surcharge

If your income has dropped significantly since the year SSA used to calculate your IRMAA, you can request a reconsideration. SSA accepts eight qualifying Life-Changing Events (LCEs):

To file, use SSA Form SSA-44, attach proof of the LCE and evidence of your actual lower income (a letter from your former employer, a tax return showing lower income, or a statement of benefits). SSA can use a more recent tax year — or even a current-year estimate — if your circumstances qualify. A successful appeal can remove or reduce the surcharge starting immediately, with refunds for prior months if approved retroactively.

The appeal process is separate from the normal IRMAA determination. If you simply believe SSA used incorrect income data (wrong year, IRS reporting error), you can request a standard reconsideration rather than an LCE appeal.

IRMAA and the 2026 Part D $2,100 cap: how they interact

One of 2026's biggest Medicare developments is the first-ever hard cap on out-of-pocket drug spending: $$2,100 per year under any Part D plan. This cap applies to your drug spending — copays, coinsurance, and the deductible — but it does not include premium costs.

IRMAA Part D surcharges are premiums, not drug spending. They do not count toward the $2,100 cap. So a beneficiary at IRMAA Tier 2 might pay:

• Their plan's Part D premium (e.g., $0 on a $0 MA-PD plan's drug portion)
• + $35.30/month IRMAA Part D surcharge (billed by SSA)
• + actual drug costs up to $$2,100 out-of-pocket before the cap kicks in

The $2,100 cap still caps their drug costs — just not the surcharge. For high-cost medication users in the IRMAA tier, the practical advice is: focus your plan comparison on formulary tier placement for your specific drugs, since the cap limits your spending but the surcharge doesn't go away regardless of which plan you choose.

Local health data underscores why drug costs matter in Minnehaha County:

Source: CDC PLACES: Local Data for Better Health, County 2023 (2023), Minnehaha County adults.

With 31.7% of local adults managing high blood pressure and 10% managing diabetes, many Sioux Falls beneficiaries are carrying prescription regimens where both the formulary tier and the $2,100 cap are meaningful numbers — especially when layered on top of IRMAA.

What IRMAA means for Medigap vs. Medicare Advantage

IRMAA affects both coverage paths — Original Medicare + Medigap and Medicare Advantage — equally on the Part B side. The strategic difference appears in how you handle the remaining costs:

• Medicare Advantage (MA) beneficiaries at IRMAA tiers see their Part B cost increase, but their plan's own premium (often $0 in Sioux Falls) doesn't change. The IRMAA makes the premium comparison between MA plans feel even smaller, which shifts the focus to the plan's medical out-of-pocket maximum.
• Medigap beneficiaries also pay Part B including IRMAA. But Medigap's job is to cover what Original Medicare doesn't — so their higher-premium plan (Medigap Plan G, for example) is now competing against a total monthly cost that includes both the Medigap premium and the Part B IRMAA tier. This makes the Medigap premium feel more visible.

For many higher-income retirees in Sioux Falls, the right comparison is total annual Medicare outlay: Part B (including IRMAA) + plan premium + Part D IRMAA surcharge + your estimated out-of-pocket for care and drugs. That's a calculation worth running before AEP (Oct 15–Dec 7), not after. Our Medigap vs. Medicare Advantage deep dive covers the full two-path comparison.

What to watch for 2026 and beyond

1. Check your IRMAA determination letter. SSA mails it in advance of your Medicare start or each fall before the new year. The letter shows which tier you're in, the income year used, and how to appeal.
2. Track your 2024 income carefully if you retire in 2025. Your 2026 bill reflects 2024, but your 2027 bill reflects 2025 — if you retired mid-2025, your 2027 IRMAA could drop significantly. Plan for that shift.
3. Coordinate Roth conversions with IRMAA brackets. A conversion just above a tier threshold can trigger an extra year of surcharge. Ask your financial advisor to model IRMAA impact before converting.
4. Confirm the $2,100 Part D cap applies to your specific plan's drug spending — the cap is universal in 2026, but your formulary tier determines how fast you reach it.
5. Review IRMAA each year during AEP. Income changes cascade into IRMAA two years later — making it important to reassess annually, not just at initial Medicare enrollment.

How we know all this: Big Sioux Benefits runs every article through a data desk that cross-references CMS plan landscape files, SSA IRMAA schedules, 2026 star ratings, and CDC county health data — built by Strategic AI Architects. IRMAA bracket figures are from the CMS/SSA November 2024 published schedule; 2026 amounts are set annually and should be verified at SSA.gov. This is education, not advice; confirm your eligibility, income tier, and plan options with a licensed agent or Medicare.gov. We take no payment from any carrier to feature a plan.