what is the medicare penalty for making too much money

The Medicare “too much money” penalty is usually the IRMAA surcharge, which adds to your Part B and Part D premiums if your income is above set thresholds. In 2026, Medicare looks at your tax return from two years earlier, so higher income in 2024 can raise what you pay in 2026.

How it works

If your income is above the limit, you don’t lose Medicare coverage — you pay a higher monthly premium. For 2026, the standard Part B premium is $202.90, and the IRMAA can raise it to $284.10, $405.80, $527.50, $649.20, or $689.90 depending on income.

2026 income thresholds

For Part B in 2026, the higher premium starts above $109,000 for single filers and above $218,000 for joint filers, based on 2024 income. The Part D surcharge also rises in tiers, starting at an extra $14.50 per month above the first threshold.

Important distinction

This is different from the Medicare late enrollment penalty , which can happen if you delay signing up for Part B or Part D when you should have enrolled. A late enrollment penalty can be permanent in some cases, while IRMAA is an income-based surcharge.

Example

If someone had a one-time income spike two years ago, like a large IRA withdrawal, that can trigger a higher Medicare premium today even if their current income is lower. Medicare uses that earlier income snapshot to calculate the surcharge.

If you want, I can break down the 2026 IRMAA brackets in a simple table.