PUBLISHED TUE, NOV 10 20201:46 PM EST Sarah O’Brien@SARAHTGOBRIEN
KEY POINTS
·
Next year, the income-related monthly adjustments will kick in
for individuals with modified adjusted gross income above $88,000.
·
For married couples who file a joint tax return, that threshold
is $176,000.
Medicare beneficiaries who pay extra for
coverage due to higher income should be aware that those monthly surcharges are
creeping up for 2021.
With the standard premium for Part B (which
covers outpatient care) now set at $148.50 next year, those so-called
income-related monthly adjustment amounts, or IRMAAs, will result in about 8%, or 5 million,
of Medicare’s 62.8 million beneficiaries paying anywhere from $207.90 to
$504.90 for that coverage. (See chart below.)
In 2021, the adjustments will kick in for
individuals with modified adjusted gross income above $88,000; for married
couples who file a joint tax return, that amount is $176,000.
For Part D prescription drug coverage, the
additional amounts range from $12.30 to $77.10 with the same income thresholds
applied. That’s on top of any premium you pay, whether through a standalone
plan (whose premiums vary) or via an Advantage Plan, which typically includes
drug coverage.
Higher-income beneficiaries have paid more for
Part B since 2007 and for Part D since 2011. Generally speaking, your tax
return from two years earlier is used to determine whether you are subject to
the surcharges, because it usually is the most recent filing available. So for
2021, it would be your 2019 return (which was due this year).
If your income has dropped and is not reflected
in a tax return yet, you can ask the Social Security Administration to
reconsider. Events that qualify as justification for reducing or eliminating
the IRMAAs include marriage, death of a spouse, divorce, loss of pension or the
fact that you stopped working or reduced your hours.
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As long as you meet one of the qualifying
reasons, most of the time it gets adjusted, said Elizabeth Gavino, founder of
Lewin & Gavino and an independent broker and general agent for Medicare
plans.
You’ll also need to provide supporting documents
to justify your appeal. Suitable proof may include a letter from your former
employer (if you’re no longer working) or something similar that shows evidence
of reduced income.
If your effort doesn’t work, you can appeal the
decision to an administrative law judge, although the process could take time
and you’d continue paying those surcharges in the meantime.
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