It’s that time of year! The Medicare enrollment period recently began on October 15th and will stay open until December 7th. While the baseline premiums for Medicare Part B aren’t expected to change for 2018, there will be some changes related to income-based surcharges that could impact you.
What Is IRMAA? Income-Related Monthly Adjustment Amounts (IRMAA) are surcharges that are applied to Medicare Part B and Part D Premiums for higher-income Medicare recipients. There are 4 different “brackets” of surcharges, each corresponding to a specified range of income.
How is Eligibility Determined? IRMAA eligibility is determined by looking at your tax return from two years prior. In other words, information from your 2016 tax return will determine your IRMAA eligibility and any potential surcharge for 2018.
How Is the IRMAA Calculated? IRMAA surcharges and the income bracket structure have been in place since 2007. But in 2018, three brackets will be defined by a lower income threshold, which means the same level of income may now lead to a higher surcharge than in previous years. We’ve noted the changes below:
What Can You Do About It? If you have experienced a “life-changing” event in the last two years, you may be able to request that Social Security revisit the surcharge determination. Marriage, divorce, death of a spouse, reduced work hours/retirement, and loss of a pension are all considered life-changing events and may help you qualify for a lower IRMAA determination. To request a new initial determination, you can schedule an appointment with Social Security, or submit a Medicare IRMAA Life-Changing Event form, which can be found here: https://www.ssa.gov/forms/ssa-44.pdf.
If you think the new IRMAA surcharge income brackets may impact you, or if you have questions, Woodward Financial Advisors is here to help.