Is Your Medicare Premium Too High?Submitted by Mission Financial Planning on July 8th, 2020
When you turn 65 you become eligible for Medicare. Part A is free, but Medicare Part B is based on the income reported on your tax return from 2 years ago. But is that a fair way to determine the cost when your income level may have changed in the meantime?
Higher income means a higher Medicare premium. The extra that is charged is called your “income-related monthly adjustment amount” or IRMAA.
If you had higher income two years ago than you do now, you may be able to reduce your Medicare premium. Medicare allows you to appeal the premium level you are being charged if you have had a life-changing event, like stopping or reducing work, death of a spouse, divorce or otherwise have a reduction of income.
When dentists sell their practice, it creates a high-income year; it's important to be aware of this so you don't pay too much for Medicare two years later.
When you fill out the Appeal form, you have to estimate the (reduced) level of income that the premium should be calculated using. Documentation is required, and you have to re-submit annually, if needed.
Take a look at the chart to determine what your 2020 Medicare Part B (and prescription drug coverage) premium is, based on 2019’s income. If this year’s income will be significantly lower, and qualifies you for a lower Medicare premium, consider filing the appeal. Here’s a link to the form, https://www.ssa.gov/forms/ssa-44-ext.pdf it’s relatively easy to fill out and submit, but give us a call if you need guidance through the process.