Danielle Roberts, founding partner of Boomer Benefits, a Fort Worth–based insurance agency specializing in Medicare-related coverage. She is a Medicare Supplement Accredited Advisor. BoomerBenefits.com
Most Medicare beneficiaries pay part B premiums of $144.60 per month in 2020, but some are charged an amount between $202.40 and $491.60—for exactly the same coverage.
The inflated premiums are imposed on a sliding scale on Medicare recipients whose modified adjusted gross income (MAGI) plus any tax-exempt interest income tops $87,000 ($174,000 for married couples filing jointly). But there’s a twist—your premiums are calculated based on your income from two years prior. Example: Your 2020 premiums are based on your 2018 MAGI. So if your income is lower now than it was two years ago, there’s a chance you’re paying more than you should. This is especially likely if you or your spouse were working in 2018 but now are retired.
What to do: If you are paying more than $144.60 per month for Medicare Part B, you might be able to appeal the inflated premiums. To successfully appeal, you must have experienced a “qualifying life event” that lowered your income during the prior two years. The most common qualifying life event is that you and/or your spouse stopped working or are working fewer hours. Other qualifying events include marriage…divorce…death of a spouse…loss/sale of an income-producing property…changes in or termination of a pension…or receipt of a settlement from an employer due to its bankruptcy or closure. You also can appeal if you believe that the IRS misreported your income to the Social Security Administration.
Download and complete Social Security form SSA-44, Medicare Income-Related Monthly Adjustment Amount—Life-Changing Event (SSA.gov/forms/ssa-44-ext.pdf) if you think you might qualify. Include any documentation you have. Example: If your qualifying event is retirement, include a letter from your former employer noting your retirement date. Also include your most recent tax return.
It’s certainly worth investigating if you or your spouse recently retired and your MAGI prior to retirement topped $87,000 ($174,000 if married and filing jointly.)