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For some Medicare beneficiaries, premiums are just the beginning of what they must pay monthly for coverage.
That is, instead of paying the standard premiums for Part B (ambulatory care) and Part D (prescription drugs) like most Medicare registrants, their income is high enough that ” Monthly income-related adjustment amounts “or IRMAA take effect.
However, the supplement is usually based on their tax return two years earlier, which may not accurately reflect their current financial situation.
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“For some clients, their income two years ago is significantly higher than it is today or will be when they retire,” said Elizabeth Gavino, Founder of Lewin & Gavino and Broker independent and general agent for health insurance schemes.
The good news for these recipients is that they can appeal for IRMAA.
“Most people don’t want to wait two years for their low income to catch up with them in order to get a downward adjustment or removal of the ARIAA,” said Danielle Roberts, co-founder of the insurance company. Boomer Benefits.
Of the 63.3 million Medicare beneficiaries, about 7%, or 4.4 million people, pay these supplements monthly, according to the Centers for Medicare & Medicaid Services. This is due to various legislative changes over the years which have forced higher incomes to pay a greater share of the costs of Medicare.
The reason a tax return two years earlier is used is that it is usually the most recent available when the Social Security Administration performs the ARIAA determination before each new year.
For 2022, the IRMAA come into force for people with modified adjusted gross income over $ 91,000. For married couples filing joint income tax returns, surcharges start at over $ 182,000 next year. Additional fees increase at higher income thresholds.
The standard monthly premium for Part B next year is $ 170.10, which most Medicare beneficiaries pay. (Part A, which provides hospital coverage, is usually premium free.) The top income supplement ranges from $ 68 to $ 408.20, depending on income. This translates to monthly premiums ranging from $ 238.10 to $ 578.30.
For Part D, the supplements for 2022 range from $ 12.40 to $ 77.90. This is in addition to any premium you pay, whether through a stand-alone drug plan or a Medicare Advantage plan, which typically includes Part D coverage. Although premiums vary for prescription coverage, the average for 2022 is about $ 33.
The process of proving that your current income is lower is to ask the Social Security Administration to reconsider its assessment. You have to fill out a form and provide supporting documents.
âThe best way to appeal is to file your form with as much evidence as possible,â Roberts said.
Appropriate proof may include a more recent tax return (if applicable), a letter from your former employer stating that you have retired, more recent pay stubs, or something similar showing proof that your income has gone down. .
The required form contains a list of “life-changing” events that are grounds for reducing or eliminating AIMRIs, including marriage, death of a spouse, divorce, loss of pension or the fact that you stopped working or reduced your hours.
If your efforts don’t work, you can appeal the decision to an administrative judge, although the process may take time and you would continue to pay these surcharges in the meantime.
Plus, your situation is reassessed every year, which means the IRMAA (or if you pay them) may change every year, depending on how volatile your income is.