One of the biggest misconceptions about Medicare is that coverage under it is free. While Medicare Part A, which covers hospital care, is generally free for enrollees, Part B, which covers outpatient care, charges a monthly premium.

Once you start collecting Social Security, your Medicare Part B premiums will be paid out of your monthly benefits automatically. If you're not on Social Security, you'll have to make arrangements to pay those premiums yourself.

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Each year, Medicare Part B has a standard monthly premium that applies to most enrollees. This year, it's $202.90.

But some Medicare enrollees end up paying a lot more for Part B. And it's important to understand how the system works.

Understand the two-year lookback rule for IRMAAs

Once your income exceeds a certain threshold, you may be subject to Medicare surcharges known as income-related monthly adjustment amounts, or IRMAAs. IRMAAs can drive your Part B costs up substantially, and they can apply to Part D drug plans as well.

One important thing to know about Medicare IRMAAs is that they're based on your income from two years prior. This means your 2026 income will determine how much you pay for Medicare in 2028.

Now you may be thinking, "OK, if I earn a lot this year, I'll pay $20 or $30 more for Medicare a couple of years down the road."

But you should know that IRMAAs could add hundreds of dollars a month to the cost of Medicare Part B. So it's important to do what you can to avoid them.

Know what triggers IRMAAs

On a basic level, earning too much money could leave you facing IRMAAs. But there are certain factors that could make an IRMAA more likely. These include:

• Large withdrawals from a traditional IRA or 401(k) -- whether by choice or because of having to take required minimum distributions.
• Roth conversions.
• Capital gains from selling property or investments.
• Earnings from a business you run in retirement to stay busy.

It's important to work with a tax professional if you're worried your 2026 income will leave you subject to IRMAAs a couple of years down the line. They may be able to offer strategies that allow you to lower your income just enough to stay under the IRMAA threshold.

And if that isn't possible, they can at least prepare you for the likelihood of an IRMAA in a couple of years so that a surcharge on your Medicare premiums doesn't completely throw your finances for a loop.