Surprise! You may pay an IRMAA
May 1, 2019
When we talk about the costs of Medicare, the discussion can include premiums, deductibles, co-insurances and copays. Another cost to Medicare beneficiaries that may come as a surprise is the Income Related Monthly Adjustment, or IRMAA. The IRMAA is an increased amount that individuals who have a higher income pay. This can affect you if your earnings are high or you receive an unexpected windfall such as an inheritance. The IRMAA can affect both your Medicare Part B (Medical) premium and your Part D (prescription drug coverage) premium. You will still pay the standard premium and then the IRMAA as an extra charge.
The IRMAA has five levels depending on your revenue level. The Part B IRMAA can range in cost from $54.10 per month to $325 per month. The Part D IRMAA may cost between $12.40 and $77.40 per month. The Social Security Administration (SSA) determines if you owe an IRMAA. It is calculated based on your income from two years ago. For example, since it is 2019, the SSA goes back to 2017 and evaluates your Modified Adjusted Gross Income (MAGI) as reported on your tax forms. If you, as an individual, made more than $85,000 in 2017 or as a couple filing together made more than $170,000, you will pay an IRMAA for 2019.
The IRMAA is calculated anew each year so if your income changes, your IRMAA will be adjusted.
The Social Security Administration will notify you by mail of the IRMAA. If you have received this notification and you feel it is incorrect, or if you feel there are extenuating circumstances that could affect the IRMAA, you can request a new initial determination based on a life-changing event. Life changing events include: death of a spouse, marriage, divorce or annulment, work stoppage or reducing the number of hours you work, involuntary loss of income-producing property due to a natural disaster, disease, fraud or other circumstances, loss of pension, receipt of settlement payment from a current or former employer due to the employer’s closure or bankruptcy.
You can submit a Medicare IRMAA Life-Changing Event form (available online) or schedule an appointment with SSA to request a new initial determination. If you do not qualify to request a new initial determination under a Life-Changing Event, or if you disagree with the determination, there is a four level appeal process.
The first level of appeal is called Reconsideration. You can contact the Social Security Administration to learn how to file this request. If your reconsideration is successful, your Medicare Part B and D premiums will be adjusted. If it is unsuccessful, you can choose to appeal to the Office of Medicare Hearings and Appeals. Note that there are specific time frames in which you must submit the appeal at this stage and above, however there is the opportunity to request extensions if you are unable to provide the pertinent information within the time frame allowed. The next level of appeal is the Council level and the fourth level is the Federal District Court. This is the final level of the Medicare appeals process.
If you have received an IRMAA notification and are unsure if it is correct, or if you are would like clarification on your next step, you can contact the Alaska Medicare Information Office at 1-800-478-6065 for clarification and assistance.
Nila Morgan is a Certified Medicare Counselor who works at the Anchorage Senior Activity Center.