The Sneaky Reason You Might Pay More for Medicare in 2028

Medicare premiums for Part B and Part D can be subject to income-related monthly adjustment amounts (IRMAAs) calculated from income two years prior, meaning 2026 income will determine 2028 surcharges; the standard Part B premium this year is $202.90. Large increases in 2026 income—due to raises, bonuses, beginning Social Security, or first RMDs—can trigger IRMAAs that add hundreds of dollars per month to retiree healthcare costs. Financial planning strategies such as delaying Social Security or making qualified charitable donations of RMDs may reduce 2026 taxable income and help avoid higher 2028 Medicare charges.

Analysis

Market structure: IRMAA creates durable demand for tax-planning and retirement-advice services because a 2026 income spike directly increases beneficiaries' Part B/Part D costs in 2028. Winners include fee-based RIAs/broker-dealers (RJF, LPLA), tax-software/advisors (INTU, HRB) and custodial/trading platforms (SCHW, NDAQ) that capture execution and planning flows; losers are discretionary consumer names that rely on older consumer spending if retirees cut budgets. Expect pricing power for planners (higher AUM fees, 5–10% incremental revenue possible over 12–24 months) while Medicare program receipts rise, not private insurers.

Risk assessment: Tail risks include a legislative rollback of IRMAA rules, broad RMD relief, or rapid market drawdowns in 2026 that reduce realized income — any of which would reverse planning demand. Immediate (days-weeks) effect: surge in client outreach and trading; short-term (3–12 months): elevated Roth conversion and DAF activity; long-term (2+ years): structural shift toward tax-efficient vehicles. Hidden dependencies: IRS guidance on RMD redemptions, state tax treatment of Roth conversions, and corporate bonus timing could materially change flows.

Trade implications: Direct plays: establish modest long exposure to INTU (2–3% portfolio) and RJF or SCHW (1–2%) to capture advisory/tax-planning revenue; consider buying NDAQ (1%) for higher market-data/trading activity. Pair trade: long INTU, short XLY (equal notional) to express advisors benefiting while older-consumer discretionary risks reprice. Options: buy 3–6 month INTU call spreads (e.g., +1 5% OTM / -1 15% OTM) to limit capital and capture event-driven volatility around year-end tax flows.

Contrarian angles: The market underestimates lasting demand for tax-planning; consensus treats IRMAA as a household problem, not an industry revenue catalyst. Reaction is underdone for custodial/trading venues (NDAQ, SCHW) where incremental volume and advisory onboarding are sticky. Unintended consequence: aggressive Roth conversions could boost near-term tax receipts and create supply pressure in equities near calendar-year-end, presenting tactical short-term volatility opportunities.

Key Decisions for Investors

• Establish a 2–3% long position in INTU within the next 30–90 days to capture increased tax-software and TurboTax/QuickBooks advisory uptake tied to IRMAA-driven planning; target +15% in 12 months, stop-loss 8%.
• Add a 1–2% long position in RJF or SCHW to benefit from higher RIA/broker-dealer advisory flows and trading volume over the next 6–18 months; take profits if fee revenue growth underperforms by >200 bps vs consensus in two consecutive quarters.
• Initiate a 1% long position in NDAQ as a play on higher market-data/clearing volumes from elevated year-end rebalancing and planning activity; hold 6–12 months and reassess on Q3/Q4 volume prints.
• Enter a pair trade: long INTU vs short XLY (equal notional) to hedge consumer discretionary exposure among retirees — establish within 3 months, rebalance if XLY outperforms by >10% or if consumer confidence >90 for two months.
• Use options for asymmetric risk: buy 3–6 month INTU call spreads (buy near-term 5% OTM, sell 15% OTM) sized to cap max loss at ~0.5% portfolio to exploit calendar-year conversion/DAF flows and expected volatility around tax-deadline windows.