Appealing to Social Security Administration Can Reduce Your Medicare Payments if You’ve Lost Income

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Of the 63.3 million Medicare beneficiaries, about 7% end up paying higher monthly premiums because of income-related charges. While the standard monthly premium for Part B this year is $148.50, CNBC reported that the surcharge for higher earners this year can range from $59.40 to $356.40. This means that some Medicare beneficiaries are paying monthly premiums ranging from $207.90 to $504.90, thanks to income-related adjustment amounts, or IRMAA.

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“The law requires Medicare parts B and D to make premium adjustments based on a person’s income,” according to Medical News Today. “A person’s income cannot be so high that it disqualifies them for Medicare. Even those who receive very high incomes may enroll. However, individuals with higher incomes pay higher premiums.”

However, beneficiaries can appeal the IRMAAs.

The Social Security Administration (SSA) makes IRMAA determinations ahead of each new year and will typically use the most recent tax return available, which could be from two years earlier.

“For some clients, their income from two years prior is significantly higher than it is today or will be when they retire,” Elizabeth Gavino, founder of Lewin & Gavino and independent broker and general agent for Medicare plans, explained to CNBC.

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For this tax year, IRMAAs kick in when your modified adjusted gross income exceeds $88,000, or $176,000 for married couples filing jointly. The higher your household income, the higher the surcharge. To appeal the determination, you must fill out a form and ask the SSA to reconsider their decision, including proof that your current income is lower.

Danielle Roberts, co-founder of insurance firm Boomer Benefits, told CNBC that the best way to appeal is to file your form and provide as much proof as possible. Proof may include your most recent tax return, a letter from your former employer stating that you retired, recent pay stubs or any other evidence showing that your income is lower.

“Life-changing” events may also count towards a reduction or elimination of IRMAAs, such as marriage, divorce, death of spouse or loss of pension.

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You can also bring your appeal to an administrative law judge; however, CNBC noted that this may take time and you’ll still be expected to pay surcharges while waiting for a decision.

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About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.

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