Medicare Surcharges: Do They Apply to You? Learn How to Appeal Them.
If you are a high-income earner, you could be hit with a Medicare surcharge. The good news is that you may be able to appeal them. Here’s what you need to know.
Q: How Is My Medicare Premium Determined?
A: When you enroll in Medicare, the premium you pay for your Part B (medical insurance) and Part D prescription drug plan coverage is based on your modified adjusted gross income (MAGI), which is your adjusted gross income plus tax-exempt interest. But not your current MAGI—your MAGI from two years ago. So, if you’ve already signed up for Medicare in 2022 or will sometime this year, your MAGI from 2020 will determine the premiums you pay.
Q: What Premium Will I Pay?
A: A standard, or base, MAGI range and Medicare premium are set at the end of each year for the coming year. If your MAGI puts you above that range, you’ll pay an Income-Related Monthly Adjustment Amount, or IRMAA, in addition to the standard Medicare premium for Part B and Part D. Visit medicare.gov and work with your wealth advisor or Medicare navigator to determine how much you can expect to pay.
Q: Will I Be Notified If I Have to Pay an IRMAA?
A: Yes. If you’re subject to an IRMAA, you’ll receive a Pre-Determination Notice from the Social Security Administration for the coming year only. It will show the standard Medicare premium for the next year as well as your IRMAA for Part B and Part D coverage.
Q: Can I Appeal My Medicare Surcharges?
A: If you’ve experienced a “life-changing event” and your current MAGI is now in a lower range than two years ago, the answer is yes. The most common life-changing events are retirement or work reduction.
But you don’t have to wait another two years before your lower current MAGI is reported by the IRS to the Social Security Administration. Instead, you can estimate your MAGI for this year by filing an appeal to your IRMAA, called a Request for Reconsideration. In doing so, you could save thousands of dollars.
Q: How Do I File an Appeal/Request for Reconsideration?
A: You’ll need to complete Form SSA-44, which is available on the Social Security Administration’s website. Appeals are individual, so if you and your spouse both received a Pre-Determination Notice indicating that you’ll be charged an IRMAA, you each must fill out a separate Form SSA-44.
Although Form SSA-44 is eight pages long, you need to complete pages 1 through 3 only. Sign the form and provide your address and phone number and attach any documentation that supports your appeal, such as a retirement letter and a breakdown of how you arrived at your MAGI estimate, although you’re not required to provide any proof.
Finally, consider sending your and your spouse’s paperwork together to ensure the same Social Security Administration representative processes both sets. Make copies of all documentation for your records and mail it (requesting a receipt or confirmation number to verify delivery) to your local Social Security Administration Office. You should expect a reply in 30-60 days.
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