Who is IRMAA and why do I need to know about Her?

Do you pay more than $134 per month for Medicare Part B? This may be the reason!

The “Big Day” is fast approaching! You will be age 65 soon. You’ve done everything you need to begin this new life; notified your employer you’re retiring, contacted Social Security and filed for Social Security benefits and Medicare, and talked to your Financial Planner. You can already imagine you and your spouse on that beach in Florida or in a cabin in Wisconsin. Smooth sailing until you receive a letter from Social Security telling you your Medicare Part B Premium will be increased by $267.90 per month. You are also notified that an additional $33.60 will be added to your Medicare Part D Premium. To add insult to injury your spouse received a similar letter informing him/her of the same increases.

What IRMAA why am I being affected by it, you ask yourself? IRMAA is the acronym for Income-Related Medicare Adjustment Amount. IRMAA was a law enacted to help ensure Medicare will there for you when the time comes. If you have higher income, the law requires an adjustment to your monthly Medicare Part B premium and your Medicare prescription drug coverage premium. If you are married and filed a joint tax return, your spouse’s premiums would be adjusted also even if they had not worked.

Social Security determines how much you will pay for your Medicare Part B premiums and prescription drug plan based on your modified adjusted gross income (MAGI) from two years prior to the Premium Year (PY). Your MAGI is your total adjusted gross income plus tax-exempt interest income. If you file taxes “married, filing jointly” and your MAGI is greater than $170,000, you’ll pay higher premiums. If you file taxes using a different status you’ll pay a higher premium if your MAGI is greater than $85,000. If your income is not greater than the amounts mentioned, this law does not apply to you.

The IRS provides Social Security information from your most recent tax return. For instance, in 2018 IRS provides information from your 2017 tax return for tax year 2016. If you amended your tax return for that year and it changes your MAGI, it is up to you to provide Social Security proof of the amended return and acknowledgement receipt from the IRS.

If your income has gone down due a Life Changing Event (LCE) such as married, divorced, widowed or loss of income, and you have documentation of this, you may ask Social Security for a new decision. Social Security can provide a more complete list of the LCE’s.

If you are unsure if this decision to increase your Medicare Part B or prescription drug premium is correct, contact Social Security by calling 800-772-1213. Living By Your Design, Inc. also can give information or provide guidance, with proper documentation, on whether you have experienced a LCE and should pursue an appeal or request a new decision.

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