USA Medicare B Premiums

[gk10002000]

So as I get near Social Security and Medicare age, I took a look at the Medicare B premium chart.  All is as I was aware, and be fore warned your initial premiums will be based on your MAGI from one or two years before!  So if you retired and made a lot of money, but the next year started Medicare B your initial premium would be much higher than what you might expect based on your now retired income.   So you have two choices:  1:  Wait one or two years after you stopped making high income before starting Medicare B, or 2:  You can file for a reduction in premiums.  NOTE:  SSA does NOT, I repeat does NOT seem to continuously adjust and then lower your Medicare B premiums.  At least not from anything I read.  They seem setup to try and charge you the most.  If anybody has had their Medicare B premiums automatically adjusted down please pipe in.  If anybody had filed the paperwork to get their premiums knocked down, please pipe in. 

 

Thanks

 

What if my income has gone down?

If your income has gone down due to any of the following situations, and the change makes a difference in the income level we consider, contact us to explain that you have new information and may need a new decision about your income-related monthly adjustment amount:

1. You married, divorced, or became widowed;

2. You or your spouse stopped working or reduced your work hours;

3. You or your spouse lost income-producing property because of a disaster or other event beyond your control;

4. You or your spouse experienced a scheduled cessation, termination, or reorganization of an employer’s pension plan; or

5. You or your spouse received a settlement from an employer or former employer because of the employer’s closure, bankruptcy, or reorganization.

    

If any of the above applies to you, we need to see documentation verifying the event and the reduction in your income. The documentation you provide should relate to the event and may include a death certificate, a letter from your employer about your retirement, or something similar. If you filed a federal income tax return for the year in question, you need to show us your signed copy of the return. Use Form SSA-44 Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event to report a major life-changing event. If your income has gone down, you may also use Form SSA-44 to request a reduction in your income-related monthly adjustment amount. You can find Form SSA-44 online at www.socialsecurity.gov/forms/ssa-44.pdf.

 

 

 

you're in 1 of these 5 groups, here's what you'll pay:

If your yearly income in 2016 (for what you pay in 2018) was			You pay each month (in 2018)
File individual tax return	File joint tax return	File married & separate tax return
$85,000 or less	$170,000 or less	$85,000 or less	$134
above $85,000 up to $107,000	above $170,000 up to $214,000	Not applicable	$187.50
above $107,000 up to $133,500	above $214,000 up to $267,000	Not applicable	$267.90
above $133,500 up to $160,000	above $267,000 up to $320,000	Not applicable	$348.30
above $160,000	above $320,000	above $85,000	$428.60

[taxout]

No, the income adjustment is made annually, based on your Federal tax return from two years before. So for 2018, it's based on your 2016 return. For 2019, it's your 2017 return.

 

Remember that delaying enrolment in Part B usually involves a significant penalty.

 

[Langsuan Man]

16 hours ago, taxout said:

No, the income adjustment is made annually, based on your Federal tax return from two years before. So for 2018, it's based on your 2016 return. For 2019, it's your 2017 return.

 

Remember that delaying enrolment in Part B usually involves a significant penalty.

 

Yes, 10% per year, so if you delay by 5 years your B premium will be 50% more

 

Also remember that MAGI is exactly that, modified, so certain normally tax free income will count towards the income adjustment, which is really a penalty despite bureaucrat speak 

[JLCrab]

There is also a Part B penalty waiver for which some here in Thailand might qualify:

(Scroll to): If you plan to move back to the U.S. or travel back frequently, you might consider delaying or dropping Part B if --

 

https://www.medicareinteractive.org/get-answers/medicare-health-coverage-options/medicare-and-living-abroad/medicare-coverage-for-those-who-live-abroad-but-plan-to-move-back-to-the-united-states-or-travel-back-frequently

 

[gk10002000]

On 10/11/2018 at 6:28 PM, taxout said:

No, the income adjustment is made annually, based on your Federal tax return from two years before. So for 2018, it's based on your 2016 return. For 2019, it's your 2017 return.

 

Remember that delaying enrolment in Part B usually involves a significant penalty.

 

I understand the initial enrollment calculation.  My question is, have any of you had your premium subsequently reduced, either automatically or by you sending in some form and documentation and letter?  The website as I quoted above does NOT say it automatically reduces subsequent premius.

[gk10002000]

9 hours ago, Langsuan Man said:

Yes, 10% per year, so if you delay by 5 years your B premium will be 50% more

 

Also remember that MAGI is exactly that, modified, so certain normally tax free income will count towards the income adjustment, which is really a penalty despite bureaucrat speak 

Yes.  I know all about MAGI.  Which is why much of my traditional IRA is being converted to my ROTH IRA well before I start Medicare.  Roth stuff is NOT part of MAGI for either Social Security or VA benefits for that matter

[taxout]

Social Security automatically reduces (or increases) your Part B adjustment based on your tax return for two years prior. They really do. That is, it's a rolling adjustment. If you think they've made a mistake calculating the adjustment, there's a procedure for notifying them and asking for a correction.

 

 

[gk10002000]

58 minutes ago, taxout said:

Social Security automatically reduces (or increases) your Part B adjustment based on your tax return for two years prior. They really do. That is, it's a rolling adjustment. If you think they've made a mistake calculating the adjustment, there's a procedure for notifying them and asking for a correction.

 

 

Do you have any proof that they do that automatically? Did they do that with you or do you know anybody that had their premiums automatically reduced?  The social security website does NOT say that they automatically do such a thing.  The only time two years is mentioned is when a person first starts Medicare B.  

[taxout]

Yes, they do it automatically.

 

If you don't believe me, fine.

 

Spend your own time searching all over the web for some links.

 

 

[gk10002000]

12 hours ago, taxout said:

Yes, they do it automatically.

 

If you don't believe me, fine.

 

Spend your own time searching all over the web for some links.

 

 

You keep avoiding the question.  have you ever had yours automatically decreased, or do you know of anybody that has had theirs automatically decreased?  I did find the links on the official website and the only thing it says is exactly what I quoted above:

 

"What if my income has gone down?

If your income has gone down due to any of the following situations, and the change makes a difference in the income level we consider, contact us to explain that you have new information and may need a new decision about your income-related monthly adjustment amount:"

[Pib]

Below quote from the Social Security website.  Like already stated Medicare automatically does a review each year....applies an IRMAA if required, raises it as req'd, lowers it if required which can also mean lower it to zero....no IRMAA at all. 

https://www.ssa.gov/pubs/EN-05-10507.pdf

Quote

We use your modified adjusted gross income (MAGI) from your federal income tax return to determine your income-related monthly adjustment amounts. Your MAGI is the total of your adjusted gross income and tax-exempt interest income.

 

Each fall, when we ask the IRS for information to determine next year’s premiums, we ask for tax information to verify your reports of changes affecting your income-related monthly adjustment amounts, if any. We also ask the IRS for your two-year-old MAGI if we’ve temporarily used three-year-old MAGI. When we find a difference between the IRS information and information we previously used, and the difference results in a change in your income-related monthly adjustment amounts, we notify you of the change.

 

And the quote from whatever website you used above deals with if you want to appeal an IRMMA like due to a life changing event such as income going down due to certain events or incorrect federal return data, etc.   See below websites.

 

https://www.medicareinteractive.org/get-answers/medicare-denials-and-appeals/premium-appeals/appealing-a-higher-part-b-or-part-d-premium-irmaa

 

https://www.ssa.gov/forms/ssa-44.pdf

 

I don't know anyone nor have I personally ever had to pay a Medicare IRMMA since the great majority of folks don't get hit with IRMMA.  But one thing I believe is as the govt states they automatically review, adjust, and notify annually.  If you get hit with IRMMA for one year due to a peak in income one year, well, when you income returns to normal their automatic review each year will automatically do away with the IRMMA you are being hit with.   Don't know why you don't want to believe the govt "automatically" makes the adjustment.

 

 

 

[gk10002000]

On 10/17/2018 at 9:36 AM, Pib said:

Below quote from the Social Security website.  Like already stated Medicare automatically does a review each year....applies an IRMAA if required, raises it as req'd, lowers it if required which can also mean lower it to zero....no IRMAA at all. 

https://www.ssa.gov/pubs/EN-05-10507.pdf

 

And the quote from whatever website you used above deals with if you want to appeal an IRMMA like due to a life changing event such as income going down due to certain events or incorrect federal return data, etc.   See below websites.

 

https://www.medicareinteractive.org/get-answers/medicare-denials-and-appeals/premium-appeals/appealing-a-higher-part-b-or-part-d-premium-irmaa

 

https://www.ssa.gov/forms/ssa-44.pdf

 

I don't know anyone nor have I personally ever had to pay a Medicare IRMMA since the great majority of folks don't get hit with IRMMA.  But one thing I believe is as the govt states they automatically review, adjust, and notify annually.  If you get hit with IRMMA for one year due to a peak in income one year, well, when you income returns to normal their automatic review each year will automatically do away with the IRMMA you are being hit with.   Don't know why you don't want to believe the govt "automatically" makes the adjustment.

 

 

 

It is not that I don't want to believe it, it is just that nobody has reported ever seeing it happen and the website language is far from explicit.  For example the part you put in your post still mixes up automatic and routine with somebody submitting reports of changes to income.  It subtly implies as a caveat that they ask for tax information only if one files a report for a change.  I find it a bit hard to believe that of all the people that retire, and say the year before they retired they made say 85k, then the next year they started Medicare B, but their income now is say 50k.  Nobody has ever had their premiums automatically reduced after 1 or 2 years?  Nobody on this site ever had that happen?  Nobody ever reported MAGI prior to retirement of over 85k (85k is actually the first premium change point)

 

"we ask for tax information to verify your reports of changes affecting your income-related monthly adjustment amounts, "

[Langsuan Man]

27 minutes ago, gk10002000 said:

It is not that I don't want to believe it, it is just that nobody has reported ever seeing it happen and the website language is far from explicit.

There is a whole world outside of Thai Visa and just because no one has reported a reduction here that means absolutely nothing regarding the automatic reduction as well as the automatic increases.  And if you are unhappy about the way that Social Security handles the system write your representative in Washington

 

It really makes no difference if you or anyone else doesn't believes what Pip states since he is correct.  You are getting wrapped around the words "reported"  YOU don't report anything, IRS reports to SSA, and the system to increase your IRMAA is as automatic as the system that reduces it.  And further more,  IRMAA only kicks in after the threshold has been reached, so as Pip states,  the vast majority of TV members don't have to worry about it, especially marred ones,  since the threshold is doubled for them

 

I have been hit with it because, even though my income did not go up that much after retirement, the types of income I have impacted the IRMAA.  Tax free municipals bonds eventually pushed me over the limit, since they may be tax free but they are subject to the Modified Adjusted Gross Income (MAGI) test and count towards the income threshold.  Fortunately Required Minimum Distributions (RMD) so far have not pushed me into the next level of pain since the income spread is large enough to cover it 

 

I get a letter every year directly from the Social Security Administration telling me exactly how much of a penalty I will pay every month.  And if they send me a letter telling me when it is going up or staying the same, I can assume that they will also tell me when it is going to go down   

[gk10002000]

On ‎10‎/‎19‎/‎2018 at 12:14 PM, Langsuan Man said:

There is a whole world outside of Thai Visa and just because no one has reported a reduction here that means absolutely nothing regarding the automatic reduction as well as the automatic increases.  And if you are unhappy about the way that Social Security handles the system write your representative in Washington

 

It really makes no difference if you or anyone else doesn't believes what Pip states since he is correct.  You are getting wrapped around the words "reported"  YOU don't report anything, IRS reports to SSA, and the system to increase your IRMAA is as automatic as the system that reduces it.  And further more,  IRMAA only kicks in after the threshold has been reached, so as Pip states,  the vast majority of TV members don't have to worry about it, especially marred ones,  since the threshold is doubled for them

 

I have been hit with it because, even though my income did not go up that much after retirement, the types of income I have impacted the IRMAA.  Tax free municipals bonds eventually pushed me over the limit, since they may be tax free but they are subject to the Modified Adjusted Gross Income (MAGI) test and count towards the income threshold.  Fortunately Required Minimum Distributions (RMD) so far have not pushed me into the next level of pain since the income spread is large enough to cover it 

 

I get a letter every year directly from the Social Security Administration telling me exactly how much of a penalty I will pay every month.  And if they send me a letter telling me when it is going up or staying the same, I can assume that they will also tell me when it is going to go down   

Again, you miss the point.  Nobody has yet ever reported their premium going down automatically and the language on the gov sites never explicitly and uniquely state the situation I have described.  Apparently nobody here ever retired with a large enough income that caused them to have high premiums, then later had social security automatically lower their premiums.  That's OK.  seems odd but it is what it is.   I never said anything about  being unhappy with anything.  Goodness you people love to argue.  I asked a simple question and people go off on tangents.

[IAMHERE]

They did it automatically for me. The first I had to pay Part B was based on a MAGI that put me in the next bracket up. It lasted two months (Nov,Dec) then went down to the lower level Part B payment in January.  

I could have applied for a reduction for November,December because I'd quit working, retired; but it was only a couple months and about fifteen bucks a month so didn't bother.

Good move with the movement of monies from Traditional IRA to ROTH. That movement of money is considered part of your MAGI, I believe.

[gk10002000]

On ‎11‎/‎4‎/‎2018 at 9:55 PM, IAMHERE said:

They did it automatically for me. The first I had to pay Part B was based on a MAGI that put me in the next bracket up. It lasted two months (Nov,Dec) then went down to the lower level Part B payment in January.  

I could have applied for a reduction for November,December because I'd quit working, retired; but it was only a couple months and about fifteen bucks a month so didn't bother.

Good move with the movement of monies from Traditional IRA to ROTH. That movement of money is considered part of your MAGI, I believe.

Oh yes, converting the Traditional to the ROTH monies are considered part of MAGI in the tax year you do it.  That is why you want to do that before you get into Social Security and a few other programs that look at MAGI. 

 

Thanks for responding.

 

 

[onera1961]

On 10/11/2018 at 1:25 PM, gk10002000 said:

Wait one or two years after you stopped making high income before starting Medicare B,

Can you wait one or two years or you have to enroll in Medicare part B as soon as you enroll in Medicare or lose it forever?

[taxout]

There are some other threads here where we discuss this in detail, but the basic answer is yes you can enrol later in Part B, with two caveats:

 

1. Your coverage under Part B won't take effect immediately. Depending on when you return to the States, you might have to wait over a year for coverage to take effect.

 

2. You'll pay more for Part B for the rest of your life as a penalty for not enrolling at age 65. The penalty is an extra ten percent of the base premium per each full year you weren't covered. So if you go two full years without Part B coverage after age 65, your basic Part B Medicare premium will be increased 20 percent. (You don't pay the penalty on the additional premium you're charged if you have high MAGI.)

 

As always, there are some narrow exceptions to these rules. See the other threads for details. But the rules are clearly designed to push you towards enrolling in Part B at age 65, even if you're overseas and can't currently use the benefits.

 

It's also important to understand that free Part A covers surprisingly little. The major coverage is under Part B.

[Sheryl]

Can you wait one or two years or you have to enroll in Medicare part B as soon as you enroll in Medicare or lose it forever?

You can wait but for each year you eaited you will pay a 10% greater premium for life.

Exception if you had private health insurance through employment during this period.

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