Whether we agree or not, people who have higher incomes have to pay more for Medicare Part B premiums and Medicare Part D prescription drug coverage. In this blog, we will help you understand how this all works, the Medicare appeals process, and what you can do about it if you think that you might be paying too much.
For most new enrollees to Medicare in 2022, Medicare Part B will cost $170.10. However, if you happen to have a higher income, the price you pay may be substantially higher than this.
Social Security uses your modified adjusted gross income (MAGI) to decide how much you should pay. They will deduct this amount from your Social Security income check if you receive one. If you are not receiving Social Security income, they will send you a bill for this amount.
So, can I appeal a higher Medicare Part B Premium? If you think that your Medicare Part B premium is too high, there is a process for you to appeal it. You have to file Form SSA-44 and explain how your income has changed and why you should not have to pay this higher premium.
Let’s take a look at how your Part B premium is decided and what the process is for having the amount reconsidered by filing a Medicare appeal.
How Medicare Part B Premiums are Determined
When you add your total adjusted gross income and tax-exempt interest income the resulting figure is your Modified Adjusted Gross Income or MAGI. Your MAGI is taken from your most recent tax returns. This means your Part B premium is based on your income from 2 years ago. For example, the 2021 premium was based on the 2019 tax return information.
When to File a Medicare Part B Premium Appeal
When your life changes dramatically and that has a substantial impact on your finances, Social Security will reconsider the amount that you are being asked to pay. For instance, when you retire, your income will be far less than when you worked full time. Social Security will likely readjust the amount to fit your new income.
Common Reasons for an IRMAA Appeal
- Change in Pension
- Change in Marital Status
- Loss of Income Producing Assets
- Receipt of Settlement from Employer
- Change in Employment Status
Should I Appeal a Medicare Part B Premium?
If you have had a change in income and you feel that you are being asked to pay too much you should appeal your Medicare Part B Premium. It doesn’t ever hurt to double check or to try. As long as you represent honest information, the worst thing they can do is say no.
If you think that the IRS has given Social Security the wrong information, you will need to straighten that out with the IRS. There is nothing Social Security can do to help you in that situation and that is not a reason for an appeal.
How to Appeal a Higher Medicare Part B Premium
To appeal a higher Medicare Part B Premium, you must appeal the number that they use to set that premium which is the Income-Related Monthly Adjustment Amount. To do this, you must file the Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event form. This is Form SSA-44 and is available online to be printed out.
You will need to write a simple cover letter explaining why you feel you are being overcharged and what your life changing event has been. You will need to fill out Form SSA-44. You also must provide proof of your income changes. This might include documentation such as:
- Marriage licenses
- Death Certificates
- Financial Statements
- Pay Stubs
- Retirement Letters
Take note that you will have to continue to pay your assigned premiums until an adjustment is made. If there has been an overpayment, you will receive future credits once the Medicare appeal has been finalized.
Part D Income Adjustments
Income-Related Monthly Adjustment Amount (IRMAA) is also used in setting your Part D premiums. If there is a decision that your IRMAA is wrong or it is readjusted this will also affect your Part D premiums.
Saving Money with Medicare Planning
It is a good idea to work with a financial planner. They can help you to time the distribution of your retirement benefits so it will have as little of an effect on your Medicare coverage as possible.
Beyond this, you can choose the appropriate Medicare Supplement Plan to protect your savings and help cover the costs that Medicare doesn’t.
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