Income & Medicare Premiums

IRMAA -for Medicare Beneficaries

Medicare does not cost the same for everyone, and some individuals are subject to pay higher premiums due to their income. We will quickly break down what you need to know to avoid paying more for your Medicare benefits.

IRMAA – Income Relation Monthly Adjustment Amount

IRMAA is a penalty with Medicare when you have a “high” income. The challenge with this penalty is it tends to sneak up on individuals since Medicare is looking at income from two years prior. Click here to see the 2022 income brackets.

How can I avoid this increase?

IRMAA is an additional cost that is not permanent. Be sure to work with your financial advisor to understand how your income is different in retirement and create strategies to lower your taxable income. If you are subject to this penalty, you can appeal Medicare’s decision. Your appeal request is completed with an appointment at Social Security or completing their “Life-Changing-Event” form.

If you are filing jointly on your taxes, do not forget that your spouse will be subject to this penalty as well. You must take steps for both of you.

How often do I need to appeal my premium?

Because Medicare is always looking two years back to adjust premiums, it is not uncommon for some individuals needing to appeal their premium amount multiple years in retirement. Perhaps, you received a large bonus or may have converted money from your IRA; these income streams will be part of your taxable income for the year and could cause your Medicare premiums to rise in the future.

Just know that you do not need to navigate this on your own.

Schatz Benefit Group specializes in Medicare and health insurance options in retirement. They walk their clients through each step of the Medicare maze.