What is IRMAA?
With the introduction of the Affordable Care Act, there were many changes that happened to the Medicare Program. These changes included a new premium adjustment for Medicare Part D. This adjustment was for people who reported higher incomes on their tax returns. It was called the income-related monthly adjustment amount, known in short as IRMAA. This monthly adjustment amount now applies to both Medicare Part B and Medicare Part D premiums. For people who fall into a higher income bracket, you will need to know about IRMAA for Part D and IRMAA for Part B.
What Is IRMAA?
IRMAA is a monthly adjustment amount and stands for income-related monthly adjustment amount. It is a surcharge that people who fall into the high-income category pay in addition to their Part B and Part D premiums. Part B Medicare IRMAA went into effect in the year 2007, and Part D Medicare IRMAA went into effect in the year 2011. This surcharge payment is made directly to Medicare, even if your monthly premiums that you pay go to an insurance company for Medicare Advantage or Medicare Part D prescription drug coverage plans.
The government department that determines whether a person is subject to IRMAA is the Social Security Administration. The determination is based on the income you reported on your tax return filing from two years previously. This means that people applying for Medicare for the year 2020 will have their 2018 income data that they filed with their tax return in 2019 used.
IRMAA is calculated every year. It is possible to pay the adjustment in one year, but not the next. This happens if your income falls below the threshold for IRMAA. This is unlike penalties for late enrollment, which can last for as long as you have Medicare coverage.
Who Pays IRMAA?
There are income brackets for determining who will pay for IRMAA Part D and IRMAA Part B. The brackets that are used to do not change every year, and started being applied for people who pay $85,000 or more in 2019, for a single person. The incomes for married filing jointly or married filing separately are different. People will pay for their plan premium plus another amount, determined by income, for IRMAA.
How Can I Appeal IRMAA?
For people looking to file an appeal, due to a qualifying event or other changes of income, it must be done through the Social Security Administration. You will need to fill out the appropriate paperwork pertaining to the situation that applies to you. It is not guaranteed that the Social Security Administration will reverse your higher premium determination, but if a qualifying situation applies, you should definitely file an appeal. The Social Security Administration does reverse or adjust IRMAA in some cases.
Ways To Reduce Your Medicare Costs In Other Places
Depending on the types of Medicare plans you get, shopping around can be a good way to save money. Studies have shown that the vast majority of people are paying more than the market rate for Medicare Supplement Insurance and Medicare Part D. Use the tools here on Insurance US to find the best plans at the best rates for you. Also, many people decide to purchase Medigap plans, also called Medicare Supplement Insurance Plans. Not only can these plans be helpful in terms of saving money through what they offer, you can also save money here by finding the best prices for Medigap plans available. Do not overpay for Medicare plans or their supplements.
How Do I Pay My IRMAA Part D And The Medicare IRMAA For Part B?
For people who are required to pay Part B IRMAA, the fee is added to the premium for the plan automatically. This is reflected in the monthly premium bill that you pay. Many people have their premiums deducted automatically from their Social Security benefits each month, and for people who are not receiving retirement benefits currently each month, the bill will need to be paid online through your bank or financial institution.
You can sign up for Medicare Easy Pay as well, which will allow your payments to be automatically paid each month through your checking or savings account. Some people do opt to mail their payment to Medicare each month as well. Medicare Part D payments are paid separately to Medicare. Even if your employer or another third-party is paying for your Part D premiums, you will still have to pay for IRMAA for Part D. A bill will be sent to you each month for your IRMAA Part D fees, and you will pay for those in the same way that you pay for your Medicare Part B premiums. This payment does not go to your plan provider.
For people who do not make their payments on time each month, they may lose their Medicare coverage. These payments are treated the same as any other premium bill in the Medicare system.
What Can I Do If I Don’t Want To Pay IRMAA?
If you do not want to pay for IRMAA, you can file an appeal. The Social Security Administration can determine that you must pay IRMAA at any point after you put an application in for Medicare benefits. If you disagree with this determination, an appeal can be filed using a form from the Social Security Administration. This form can also be filed if you experience a qualifying life-changing event that has impacted your income significantly for the year. Keep in mind that IRMAA is paid based on a sliding scale. Anytime your income changes from one level on the scale to another, the amount that you pay can change. You may pay less in one year than you do in another.