Some Medicare beneficiaries are surprised with premium surcharges, which can triple premiums. Here’s how to appeal and avoid them (2023)

FAQs

How can I prevent Irmaa? ›

Beneficiary Services is a special program for beneficiaries of life insurance from UnitedHealthcare Specialty Benefits. The program provides beneficiaries and dependents with a dedicated toll-free phone line for grief consultation, financial and legal services, and referral to community resources.

Medicare is available to most individuals 65 years of age and older. Medicare has also been extended to persons under age 65 who are receiving disability benefits from Social Security or the Railroad Retirement Board, and those having End Stage Renal Disease (ESRD).

Since 1972, individuals receiving Social Security retirement benefits, individuals receiving Social Security disability benefits for 24 months, and individuals otherwise entitled to Medicare Part A, are automatically enrolled in Part B unless they decline coverage.

Medicare surcharges are also called "Income-Related Monthly Adjustment Amounts" (IRMAA). You can enroll in a Medicare Advantage plan (Part C) or a Medigap policy, or you might do some tax planning to reduce your MAGI to avoid paying some Medicare surcharges.

If you're still working, contribute to your 401(k) or other tax-deferred account (such as a SEP IRA, if you're self-employed). Contributions will reduce your modified adjusted gross income, which is used to calculate the surcharge.

Your beneficiary can be a person, a charity, a trust, or your estate.

Key takeaways. A life insurance beneficiary designation usually overrides a current spouse or a will. Spouses in community property states must split the death benefit with the named beneficiary. Review (and update) your beneficiaries any time your situation changes.

Not in the long term — you can't keep a deceased person's retirement benefits flowing to an estate. But if a beneficiary dies before receiving a payment that is already due, Social Security can make that one payment to a family member or a legal representative of the estate.

Part A monthly premium

Most people don't pay a Part A premium because they paid Medicare taxes while working. If you don't get premium-free Part A, you pay up to $506 each month. If you don't buy Part A when you're first eligible for Medicare (usually when you turn 65), you might pay a penalty.

Which state has the most Medicare beneficiaries? ›

There is no limit on out-of-pocket costs in original Medicare (Part A and Part B). Medicare supplement insurance, or Medigap plans, can help reduce the burden of out-of-pocket costs for original Medicare. Medicare Advantage plans have out-of-pocket limits that vary based on the company selling the plan.

You can voluntarily terminate your Medicare Part B (Medical Insurance). However, you may need to have a personal interview with Social Security to review the risks of dropping coverage and to assist you with your request.

Part B is optional. Part B helps pay for covered medical services and items when they are medically necessary. Part B also covers some preventive services like exams, lab tests, and screening shots to help prevent, find, or manage a medical problem. Cost: If you have Part B, you pay a Part B premium each month.

Medicare Part B is only free if you have a low income and are enrolled in one of the Medicare Savings Programs for financial assistance. Eligibility for these programs varies by state, and some states make it easier to qualify because of higher income limits or by eliminating the asset requirement.

Look for ways to minimize your AGI. The lower your AGI (the number at the bottom of the TAX-FORM 1040) the lower the amount of your income will be subject to the 3.8% surtax.

If you have higher income, you'll pay an additional premium amount for Medicare Part B and Medicare prescription drug coverage. We call the additional amount the “income-related monthly adjustment amount.” Here's how it works: Part B helps pay for your doctors' services and outpatient care.

The way to avoid the Medicare Levy Surcharge is by taking out the required private health insurance policy – it must include hospital cover. Singles require an excess of $750 or less, and couples and families must have a minimum excess of $1,500.

A request for reconsideration can be done orally by calling the SSA 1-800 number (800.772. 1213) as well as by writing to SSA.

The Medicare Levy Surcharge is an additional tax on high-income earners who don't have private hospital cover. It's designed to reduce the burden on the public system. The current thresholds are $90,000 for singles and $180,000 for couples (increasing by $1,500 for each dependant child after the first).

What are 3 ways to split beneficiaries? ›

Usually beneficiaries will be asked to agree to the executor's accounting before receiving their final share of the estate. If beneficiaries do not agree with the accounting, they can force the executor to pass the accounts to the court.

Key Takeaways. A primary beneficiary is a person or entity named to receive the benefit of a will, trust, insurance policy, or investment account. More than one primary beneficiary can be named, with the grantor able to direct particular percentages to each.

You can transfer life insurance proceeds, a bank, account, and other assets by adding a beneficiary designation instead of using a will. When you name a beneficiary directly to an asset it usually supersedes the terms of your will. A robust estate plan uses both a will and beneficiary designations to pass on assets.

An executor cannot change beneficiaries' inheritances or withhold their inheritances unless the will has expressly granted them the authority to do so. The executor also cannot stray from the terms of the will or their fiduciary duty.

Never name a beneficiary dependent on government assistance as a direct beneficiary. A financial inheritance can disqualify a disabled or otherwise dependent person from receiving benefits. (This could be disability benefits, Medicaid benefits, subsidized housing or assisted living, or other benefits.)

Who is eligible for Social Security bonus? For every year that you delay claiming past full retirement age, your monthly benefits will get an 8% “bonus.” That amounts to a whopping 24% if you wait to file until age 70.

The Voluntary Suspension Loophole

Prior to April 30th, 2016, this Social Security loophole allowed a married worker to voluntarily suspend his/her own benefits after full retirement age, allowing the spouse to receive spousal benefits while the worker was not collecting benefits.

Within a family, a child can receive up to half of the parent's full retirement or disability benefits. If a child receives survivors benefits, they can get up to 75% of the deceased parent's basic Social Security benefit. There is a limit, however, to the amount of money we can pay to a family.

The surcharge for Part B ranges this year from $68 to $408.20, depending on income. Based on this year's standard monthly premium of $170.10, that results in IRMAA-affected beneficiaries paying premiums ranging from $238.10 to $578.30. For Part D, the surcharges for 2022 range from $12.40 to $77.90.

How much is taken out of Social Security for Medicare in 2022? ›

NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings.

For 2023, the Part A deductible will be $1,600 per stay, an increase of $44 from 2022. For those people who have not worked long enough to qualify for premium-free Part A, the monthly premium will also rise. The full Part A premium will be $506 a month in 2023, a $7 increase.

Medicare Advantage beneficiaries are extremely satisfied with their health care coverage. 98% of beneficiaries say they are satisfied with their Medicare Advantage plan, and 97% express satisfaction with their network of physicians, hospitals and specialists.

Plan F, Plan G and Plan N are the most popular types of Medicare Supplement plans. Medicare Supplement Plan F is the most comprehensive Medigap option available, providing beneficiaries with 100% coverage of Medicare-covered medical expenses after Original Medicare pays its portion.

On July 1st, 2022 the asset test to qualify for a Medicare Savings Program increased. These changes apply to the things you own, including bank accounts, cash, second homes and vehicles, and other financial resources. The new limit is $130,000 for one person and an additional $65,000 for each additional family member.

Medicare Advantage (Part C): In 2023, the out-of-pocket maximum for Part C plans is $8,300 for approved services, but individual plans can set lower limits if they wish. Part D cost sharing does not apply towards your Medicare Advantage plan's MOOP.

Maximum Out-of-Pocket Costs

For 2023 the max you will spend is $8,300. The out-of-pocket maximum for plans that allow you to see out of network providers may be higher. If your Medicare Advantage plan includes prescription drug coverage you will have a separate out-of-pocket maximum for prescription drug costs.

Generally, you won't have to pay a Part B penalty if you qualify for a Special Enrollment Period. Learn more about Special Enrollment Periods. You'll pay an extra 10% for each year you could have signed up for Part B, but didn't. You may also pay a higher premium depending on your income.

You must have Medicare Part A (Hospital Insurance) and Part B (Medical Insurance) to join a Medicare Advantage Plan.

How do I get rid of Medicare Part B? ›

You can voluntarily terminate your Medicare Part B (medical insurance). It is a serious decision. You must submit Form CMS-1763 (PDF, Download Adobe Reader) to the Social Security Administration (SSA). Visit or call the SSA (1-800-772-1213) to get this form.

Does everyone pay the same for Medicare Part B? No, each beneficiary will pay a Medicare Part B premium based on their income.

Yes, you can elect to switch to traditional Medicare from your Medicare Advantage plan during the Medicare Open Enrollment period, which runs from October 15 to December 7 each year. Your coverage under traditional Medicare will begin January 1 of the following year.

1. How do I know if I am eligible for Part B reimbursement? You must be a retired member or qualified survivor who is receiving a pension and is eligible for a health subsidy, and enrolled in both Medicare Parts A and B.

Costs for Part A (Hospital Insurance)

$0 for most people (because they paid Medicare taxes long enough while working - generally at least 10 years). This is sometimes called “premium-free Part A.” Do I qualify? If you don't qualify for a premium-free Part A, you might be able to buy it.

Most people age 65 or older are eligible for free Medicare Part A (hospital insurance) if they have worked and paid Medicare taxes long enough. You can sign up for Medicare Part B (medical insurance) by paying a monthly premium. Some beneficiaries with higher incomes will pay a higher monthly Part B premium.

Unlike late enrollment penalties, which can last as long as you have Medicare coverage or are considered a Medicare beneficiary, the IRMAA is calculated every year. You may have to pay the adjustment one year, but not the next if your income falls below the threshold.

You'll also have to pay this extra amount if you're in a Medicare Advantage Plan that includes drug coverage. If Social Security notifies you about paying a higher amount for your Part D coverage, you're required by law to pay the Part D-Income Related Monthly Adjustment Amount (Part D IRMAA).

Part B IRMAA is automatically added to your monthly premium bill. Here are 4 ways you can pay your Part B premium: Online through your secure Medicare account.

What triggers Irmaa? ›

The IRMAA surcharge was added to your 2022 premiums if your 2020 income was over $91,000 (or $182,000 if you're married). And for 2023, the IRMAA surcharge will be added to your premium if your 2021 income was over $97,000 (or $194,000 if you're married).

Medicare Part B IRMAA

In 2023, the standard Part B monthly premium is $164.90. Medicare recipients with 2021 incomes exceeding $97,000 (single filers) or $194,000 (married filing jointly) will pay a premium between $230.80 and $560.50.

It applies only to Medicare beneficiaries who have a modified adjusted gross income above $97,000 for an individual return and $194,000 for a joint return. If your earnings are below this threshold, IRMAA doesn't apply to you.

A request for reconsideration can be done orally by calling the SSA 1-800 number (800.772. 1213) as well as by writing to SSA.

Yes. In fact, if you are signed up for both Social Security and Medicare Part B — the portion of Medicare that provides standard health insurance — the Social Security Administration will automatically deduct the premium from your monthly benefit. The standard Part B premium in 2023 is $164.90 a month.

The estimated average monthly premium for Medicare Part D stand-alone drug plans is projected to be $43 in 2023, based on current enrollment, a 10% increase from $39 in 2022 – a rate of increase that outpaces both the current annual inflation rate and the Social Security cost-of-living adjustment for 2023.

Known as the Income-Related Monthly Adjustment Amount, or IRMAA, Social Security will notify you if your income places you in this higher bracket. Less than 5 percent of Medicare beneficiaries have to pay the IRMAA surcharge.

If you file your taxes as “married, filing jointly” and your MAGI is greater than $194,000, you'll pay higher premiums for your Part B and Medicare prescription drug coverage. If you file your taxes using a different status, and your MAGI is greater than $97,000, you'll pay higher premiums.

Is there a refund after a successful IRMAA appeal? Yes, the IRS will refund any excess amounts.

Do both spouses have to pay Irmaa? ›

Find information about 2022 IRMAA here and Part D IRMAA here. *Important: If both the husband and wife are on Medicare, each will pay the adjustment.

If your appeal is successful, Medicare will reduce your future Part B and D premiums, and retroactively pay back previous Medicare surcharges you paid in the year.