IRMAA And Medi­care Pre­mi­ums

The Oakdale Leader - - PERSPECTIVE - By RUS­SELL GLOOR So­cial Se­cu­rity Ad­vi­sor

Dear Rusty: Due to my ad­justed in­come in 2015 my wife and I (70 and 66) now have over $400 taken from our monthly So­cial Se­cu­rity fixed in­come to pay for our share of Medi­care. I was let go from my last com­pany of 27 years while I was on med­i­cal leave. I had to pull out money from my 401k to live on and that showed as an in­crease to my 2015 in­come. Why do se­niors get pun­ished for try­ing to sur­vive and not lose all they have worked for? I never heard of this type of ac­tion taken against re­tired se­niors be­fore. Was it an ACA (Oba­macare) reg­u­la­tion so the gov­ern­ment can steal from the el­derly? Signed: Frus­trated

Dear Frus­trated: Well, no, it’s not some kind of Gov­ern­ment con­spir­acy against se­nior cit­i­zens, but rather it’s a con­se­quence of the Medi­care Mod­ern­iza­tion Act of 2003 (which took ef­fect in 2007) af­fect­ing Medi­care Part B pre­mi­ums, and of the ACA, which took ef­fect in 2011 af­fect­ing Part D pre­mi­ums. Both of th­ese laws tar­geted higher in­come ben­e­fi­cia­ries by caus­ing them to pay higher Medi­care Part B and Part D pre­mi­ums, de­pend­ing upon their fil­ing sta­tus and in­come level. I’m afraid what you have come up against is some­thing called “IRMAA,” or the In­come Re­lated Medi­care Ad­just­ment Amount. And since Medi­care pre­mi­ums are usu­ally de­ducted from So­cial Se­cu­rity ben­e­fits, those af­fected see their ben­e­fit check get smaller.

With­out get­ting into all the dif­fer­ent in­come lev­els and higher pre­mi­ums for each fil­ing sta­tus, I’ll just fo­cus on your per­sonal sit­u­a­tion. Since you are mar­ried and, I pre­sume, fil­ing jointly on your in­come taxes, as long as your com­bined Mod­i­fied Ad­justed Gross In­come (MAGI) is un­der $170,000 there is no sur­charge to ei­ther your Part B pre­mium or your Part D pre­mium. If your MAGI is more than $170,000, your Part B pre­mium in­creases to any­thing from $187.50 monthly to $428.60 monthly de­pend­ing upon your in­come level, and a sup­ple­ment of from $13.30 to $76.20 is added to your Part D pre­mium (all dol­lar val­ues are for 2017). It sounds as though the 2015 with­drawals from your 401(k) were enough to push you over the in­come limit, caus­ing Medi­care pre­mi­ums for both you and your wife to in­crease for 2017 (Note that Medi­care re­views tax re­turns from two years prior to make the in­come de­ter­mi­na­tion).

Now for a lit­tle light at the end of the tun­nel: Medi­care rec­og­nizes that ben­e­fi­cia­ries some­times have a ma­jor “life-chang­ing event” which can cause their in­come level to be unusu­ally high for a given year, thus ac­ti­vat­ing Medi­care’s IRMAA clause. You can re­quest that Medi­care re­view your sit­u­a­tion and base your Medi­care pre­mium on a sub­se­quent year’s lower in­come (e.g., 2016), but you will need to prove to Medi­care that your IRMAA should be less. To do this, you may start by us­ing Form SSA-44 found at https:// www.ssa.gov/forms/ssa-44.pdf or you can make an ap­point­ment at your lo­cal So­cial Se­cu­rity of­fice and re­quest re­con­sid­er­a­tion of your IRMAA amount in per­son. Even if the ini­tial re­view re­sults in re­jec­tion, you have sev­eral ap­peal op­tions avail­able to you, start­ing with sub­mit­ting form SSA-561 “Re­quest for Re­con­sid­er­a­tion” which can be found at https://www.ssa.gov/ forms/ssa-561.pdf, and con­tin­u­ing if nec­es­sary to a re­view by an Ad­min­is­tra­tive Law Judge, by the Medi­care Ap­peals Coun­cil, and even by the Fed­eral District Court, if nec­es­sary. And if you are suc­cess­ful, you might be get­ting a let­ter from So­cial Se­cu­rity no­ti­fy­ing you that you’ll be get­ting a re­fund of the ex­cess of those higher IRMAA-re­lated Medi­care pre­mi­ums which you’ve been pay­ing.

The in­for­ma­tion pre­sented in this ar­ti­cle is in­tended for gen­eral in­for­ma­tion pur­poses only. The opin­ions and in­ter­pre­ta­tions ex­pressed in this ar­ti­cle are the view­points of the As­so­ci­a­tion of Ma­ture Amer­i­can Cit­i­zens Foun­da­tion’s So­cial Se­cu­rity Ad­vi­sory staff. To sub­mit a ques­tion, con­tact the Foun­da­tion at info@ amac­foun­da­tion.org.

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