I receive inquiries all the time about additional "IRMAA fees" being assessed on Medicare Part B and Part D premiums. The base premium for Medicare Part B as of 2018 is $134 per month. Part D premiums vary, but they are generally between $20 and $30 per month. Some individuals will receive a letter from Medicare stating that additional fees will be charged as well because of something called IRMAA. This can be a frustrating realization, but sometimes there is an option to have the IRMAA charges reversed.
What is IRMAA on Medicare Part B?
IRMAA stands for "Income-Related Monthly Adjustment Amount." It is an additional fee that is imposed on the Medicare Part B premium for higher income individuals. Medicare looks back 2 years prior to Medicare enrollment to determine if IRMAA charges will apply. That means as of 2018 the government will look back to 2016 taxes to determine if IRMAA charges will be imposed.
The exact amount of the IRMAA fee depends on income during the look-back year. For example, households filing a joint tax return are subject to IRMAA fees at the $170,000 AGI level. The fees increase as your income increases. A full breakdown of IRMAA charges is available from Medicare.
What is IRMAA on Medicare Part D?
Medicare also imposes IRMAA charges when you enroll in a Part D plan. The charges are imposed regardless of which Part D plan you enroll in. The additional IRMAA Part D fee is only imposed if you enroll in a Medicare prescription drug plan.
Can I appeal the IRMAA fee if my income is now lower?
Yes! Medicare allows you to appeal the IRMAA fee if you have experienced a life-changing event that has impacted your income. A life-changing event could be something like retiring from work or a reduction in work that has caused income to decrease. There are several life-changing events that qualify including death of a spouse, divorce, sale of an income-producing property, and reduction in pension. The IRMAA appeal form is available on the Social Security website.
I'm going on Medicare in a few years, how can I prevent the IRMAA charges?
A good financial advisor should be aware of the Medicare IRMAA charges as well as the 2 year look-back provision used for determination. Proper planning can be very helpful in the years prior to enrolling in Medicare.
How much are Medicare IRMAA fees?
If you need help making sense of the Medicare costs and options available to you please give us a call. We specialize in Medicare and we try to make it as easy as possible for our clients to obtain high-quality coverage while navigating the confusion.