Paying too Much for Medicare? Reduce Your Premiums!
By Elie Harriett
March 29, 2016
Since 2007, Medicare premiums have adjusted based on income. Everyone pays a set premium for Medicare Part B, those with higher incomes … income from TWO YEARS AGO, pay higher costs. In 2011, increased costs for Medicare Part D were also added into the equation. These costs, called the “Income Related Monthly Adjusted Amounts,” or “IRMAA” are a way to spread around the increased costs of healthcare by making people with higher incomes pay a higher percentage of the cost for Medicare.
The threshold for IRMAA for a single individual is $85,000 of modified adjusted gross income (MAGI) from 2 years ago or for a household, a MAGI of $170,000, also from 2 years ago. If your income is above these amounts from 2 years ago, you are placed on a graduated scale where your Medicare Part B and Part D premiums will increase.
The problem arises when people, whose incomes were above these amounts 2 years ago, due to retirement or other factors, are no longer enjoying an income that high but they are still required to pay these increased premiums. Fortunately, there is a way to drop your premium and avoid these increased charges. Social Security will allow you to use your estimated income for the current year to gauge your Medicare premiums and potentially avoid the IRMAA if you have a “life changing event.” Some, but not all acceptable events are:
- Death of Spouse
- Retirement
- Reduction in amount of hours worked
- Pension loss
If these, or any other potential life changing events have happened to you, contact Social Security and ask them for a “Medicare-Reduction Based on Life-Changing Event form,” also known as form SSA-44 and complete it immediately to drop your Medicare Part B and D premiums down to the amount that corresponds with your current income situation.
For this and other useful information, contact a knowledgeable insurance advisor. If you are a resident of Ohio, West Virginia, or Kentucky, use the “ask a question” button on this page and we’ll be happy to assist you with all aspects of your Medicare insurance planning.
