Dear Toni:
I retired last March and my income was over $300,000. I was surprised to learn that Medicare Parts B and D are both income based and I have to pay $335.70 for Part B and $69.30 for Part D, totaling $405.00 monthly from my Social Security check.
I was recently told that you understand the Medicare rules and I could possibly appeal my Medicare premium because I am not working full-time with an income of $300,000; only receive a $2,400 monthly Social Security check.
Can you explain what I should do to appeal this decision and bring my Medicare premium to a lower amount? I am looking forward to your answer…Guy from Hockley,TX
Mr. Guy:
I hear about this Part B and D premium problem all of the time. People think that everyone pays the same amount for their Medicare Parts B and D, but those days are long gone. If your income for an individual is over $85,000 or married is over $170,000, then your Parts B and D premiums will be more.
Social Security explains how they arrived at the Part B and D premiums based on your “Modified Adjusted Gross Income” (MAGI) from your last filed tax return.
Your MAGI was over $300,000 and the table used in letter you received from Social Security shows what the Part B and Part D premium adjustment (nice way of saying it’s going to cost you more) will be, whether you are filing single or married.
Most retirees do not realize that they have special situations also known as life changing events that can lower your “income related monthly adjusted amount” (IRMAA).
Below are a few of the life changing event that can make your income go down:
- you have gotten married or divorced, or your spouse has died;
- you or your spouse have stopped working or have reduced your hours;
- you have lost property that you were making money from due to a disaster or other event beyond your control; or
- you or your spouse’s benefits from an insured pension plan stopped or went down
If your income has gone down, YOU must inform Social Security before the end of September so Social Security can correct your amount to begin in January 1st of the next year.
For Social Security to change their records, you must show evidence that your income is lower. Bring your evidence such as tax information, retired and no longer producing the type of income you were, etc. in person to your local Social Security office. Or you can use the form SSA-44 titled “Medicare Part B Income-Related Premium – Life-Changing Event” and attach the original documents or certified copies. Social Security does not accept copies; your original documents should be returned to you.
Once Social Security is satisfied with the evidence, it will update its records and correct Part B and Part D premiums to what your current income is.
Don’t forget a onetime increase in your income such as property that is sold or cashing in your IRA or even winning the lottery(aren’t we wishing for that) can change your monthly adjusted gross income (MAGI) that may cause you to pay a higher Part B or Part D premiums.
I have had clients come to me after cashing in an IRA to pay cash for a new car and realize that they both, if married, have to pay more for the Part B and Part D premiums for a whole year until their income goes down. They then have to prove what their new income is.
**Social Security reviews your income each year and will adjust your Part B and D premiums to your new income level the next year.
For those interested in the different income levels visit www.tonisays.com/ask-toni and request the 2014 Medicare costs and premiums. Toni or one of her team members will make sure you get it.
Toni King, Medicare advocate/author of the new Medicare Survival Guide®, which is a simple guide that puts Medicare in “people” terms, is on sale at www.tonisays.com.
