How to Appeal Your High Income Medicare Premiums

How to Appeal Your High Income Medicare Premiums

If you’ve received a notice from Medicare that your Medicare premiums will be increased because of high income, you might be wondering, “Can I appeal to reduce the premiums?”

If you have a Life Changing Event (LCE), you might be able to! Keep reading or click here to learn more on our YouTube Channel.

When you enroll in Medicare, the premium you pay is based on your income.  Typically, Medicare looks back at your tax return from two years ago or most recent tax return to determine your monthly premiums. 

See the table below for the 2019 Medicare premiums, based on your 2017 tax return:

As the above table shows, it’s all based on how much you earned in the past. But that may not always be the case. 

Your past income can be ignored when you retire and have a reduction of income.  A reduction of income (a.k.a. Work Stoppage or Work Reduction) is one of several Life Changing Events (LCEs) you can potentially use to lower your Medicare premiums NOW.  The other LCEs you can use are Marriage, Divorce/Annulment, Death of Your Spouse, Loss of Income-Producing Property, Loss of Pension Income, and Employer Settlement Payment. [Reference Form SSA-44 (Medicare Income Related Monthly Adjustment Amount – Life Changing Event)]

Let’s say that in the last few years you were working, your income was above the first income threshold listed in the table above (which is $85,000 for an individual tax filer).  We’ll assume you’re an individual tax filer and your Modified Adjusted Gross Income (MAGI) in 2017 was $140,000. Your retirement will lead to a sharp decline in income, placing you below $85,000 from here on out.  

Based on your 2017 income, Medicare will first mark you down for a Part B premium of $352.20/mo in 2019.  That’s comprised of the $135.50/mo base Part B premium plus an Income Related Monthly Adjustment Amount (IRMAA) of $216.70/mo.  

There is also a Part D IRMAA to pay when your income is higher (reference table above).  In this example, there would be an extra $51.40/mo premium for the Part D IRMAA in the event you enroll in a Part D prescription drug plan with an insurance carrier.  Note: The Part D IRMAA is completely separate and in addition to your Part D prescription drug insurance plan.

When you receive your Initial IRMAA Determination letter in the mail about your Medicare premiums being higher than normal, this is when you can take action and file an appeal.  

This appeal can make a big difference. Let’s see what would happen in our earlier example: 

— With an initial income somewhere between $133,500-$160,000, but reducing to below $85,000 in retirement, your Medicare premium savings will be substantial: 

— Instead of $352.20/mo for Part B + $51.40/mo for Part D IRMAA, you would only have to pay $135.50/mo for Part B + $0 for the Part D IRMAA.  

— That is savings of $268.10 every month!

So how do you appeal for a lower Medicare premium?  You will use SSA Form-44 (Medicare Income Related Monthly Adjustment Amount – Life Changing Event)Complete the required information on the form and turn in to a local Social Security office.  You’ll need to provide accurate estimates of what your income will be based on the life changing event you choose, so be prepared to answer the questions on the form as accurately as possible.  

After you submit the form and any supporting documentation to Social Security (in-person or by mail), Social Security will process your appeal and update you on their decision.


Reference Links

Initial IRMAA Determination Letter


Neither Medicare Mindset LLC nor its agents are connected with the Federal Medicare program.