S1E28 What is this Part B Surcharge (IRMAA)?

IRMAA? Who is that? Well... it's really more 'what's' that? 
In case you received a letter from Medicare expressing some unexpected surcharges to your Medicare premium, the show today might provide some answers to 'what' those charges mean.

Transcript

Welcome back, everyone! I had a different episode planned for today, but I’ve been taking many calls and answering a lot of emails about Part B Premium bills coming in! So fear not! Today we’re gonna talk about what’s going on with that bill coming from Health and Human Services every quarter! 

So, if you’re collecting Social Security, a lot of this will sound different from what you’re currently doing. For those of you on Social Security, Medicare pulls your Part B premium right out of your check every month instead of sending you a bill in the mail. But you probably already know that.

So let’s get into it --- First, if you haven’t heard the news yet, Part B premium amount is changing! In 2021, Part B will be $148.50 per month for most people, so that’s a quarterly bill of $445.50. Let’s talk about that! This amount is for people who made less than $88,000 in 2019 as a single individual or married people filing jointly, less than $176,000 in 2019. These amounts are for your 2019 Adjusted Gross Income. Remember, like I’ve mentioned in previous episodes, even if you enroll in a Medicare Advantage plan with no monthly premium, you still have to pay for your Part B!

Now, there’s something else that comes with the Part B premium if you made more than the amounts I just went over… Medicare has what’s called an income-related monthly adjustment amount, or IRMAA! And it’s throwing some people for a loop! This surcharge gets added to your Part B and Part D monthly premiums.

The IRMAA charge is based on your income and is on a sliding scale, and it’ll tack on to your Part B payment. Let’s go over that quickly:

See IRMAA Graphic for this section.

Remember, IRMAA is based on your 2019 adjusted gross income, for example:

If, as a single individual, you made between $88,000 and $111,000 - or as a married couple, you earned between $176,000 and $222,000, you will qualify for a $59.40 surcharge to your Part B plan and a $12.30 surcharge on your Part D plan.

If, as a single individual, you made between $111,000 and $138,000 - or as a married couple, you earned between $222,000 and $276,000, you will qualify for a $148.50 surcharge to your Part B plan and a $31.80 surcharge to your Part D plan. 

If, as a single individual, you made between $138.000 and $165,000 - or as a married couple, you earned between $276,000 and $330,000, you’re looking at a $237.60 surcharge to your Part B and a $51.20 surcharge to your Part D. 

If as a single individual you made between $165,000 and $500,000 - or as a married couple, you earned between $330,000 and $750,000, you’re looking at a $326.70 surcharge to your Part B and a $70.70 surcharge to your Part D. 

And finally, if as a single individual you made more than $500,000 - or as a married couple you made more than $750,000, you’re looking at a $356.40 surcharge to your Part B and a $77.10 surcharge to your Part D. 

You, like many others, might receive your first bill for the new year and ask, “Why am I being surcharged! I don’t make near that amount!” or you may be saying, “Yeah, well, I used to make that much in 2019, but I’m retired now, I don’t make that much anymore!” What do I do?

Fear not! I’ve noticed that some people receiving that surcharge may have had a one-time increase in annual income because they sold their house, received an inheritance, or even just a big bonus at work. Still, they don’t intend on carrying income like that in the coming year or afterward. And the same goes for retiring or retired people since 2019 who have begun to receive a lower income.

There is a solution!

The Department of Health and Human Services is aware of these life changes, and they have provided you with a simple form to complete and submit to Social Security to lower or remove the surcharge! This particular form is called Form SSA - 44, again that’s Form SSA - 44. Not only does this form include the amounts we have just discussed and the surcharges associated with them, but it also allows you to give them the information revolving around your life-changing event and for you to estimate your income going forward. All you have to do is list your income for the tax year in question and then calculate your income going forward. Of course, you’ll have to provide them with some simple to find proof, but it’s as easy as 123!

If you think you may need some help with this, Certified Medicare Planners are standing by to help, as always! 

I hope this episode helped you understand your Part B premium bill a little more. 

Don’t forget to like and subscribe to the page, share this video with your friends, and most importantly, have a great week~!