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If you’re at the age when Medicare is becoming a part of your daily life, you’re probably considering the different options available and their accompanying costs. One of the costs you might encounter is IRMAA – the income related monthly adjustment amount.

IRMAA is a surcharge you might incur on your Medicare Part B and Part D plan premiums if your adjusted gross income (AGI) is above a certain level.

If you’re trying to save on your Medicare costs, you might have some options that can help you to keep your out-of-pocket low.

How IRMAA Works

To navigate reducing your Medicare IRMAA-associated costs, it’s helpful to understand how it works. 

Typically, Medicare beneficiaries pay a standard premium that covers 25% of the costs for Part B and Part D. The other 75% is covered by the government. Beneficiaries with higher incomes end up paying more than 25%.

Essentially, IRMAA brackets put candidates in premium categories that determine the adjusted amount they pay for prescription drug coverage or Medicare Part B medical coverage. There are 5 brackets, which determine whether a beneficiary pays 35%, 50%, 65%, 80%, or 85% of the program costs.

The real shocker for most beneficiaries is that the program is based on your yearly income – whether individually or jointly filed – from 2 years prior. 

For example:

The income on your 2021 tax filing will determine what you pay in 2023. 

We all know that a lot can change in 2 years, especially as we retire, lose property, or even face the death of a loved one.

IRMAA determination is evaluated every year, but because it reflects your income from 2 years prior there are instances that make you eligible for appeal. 

How to Appeal IRMAA

Sometimes there is nothing that you can do to avoid the IRMAA surcharge. But there are many cases in which you may qualify for an IRRMA adjustment that makes you eligible to reduce or completely eliminate your extra cost.

There are many everyday life events that the Social Security Administration will consider for an IRMAA appeal. Those events include but aren't limited to:

If you've experienced any of these life changes, you will need to request an appeal in writing by completing a request for reconsideration form (SSA-561-U2). There are three ways to get the form:

If you have not experienced a qualifying life event, you might not be able to reduce your Medicare Part B premium. 

Of course, this is a simplified overview of IRMAA and the IRMAA appeals process. But simply understanding the appeal process allows you to take control of your Medicare coverage and determine how to get the lowest-cost care possible.The most important part of navigating the world of Medicare is understanding your needs and making sure that your plan accommodates each of them. Concerned you don't have the right Medicare plan for your needs? Schedule a time to talk with one of our local Medicare advisors.

Happy Birthday! Turning 65 is a big milestone around here. Anyone turning 65 in 2021 (or with January 2022 birthdays) will become eligible for Medicare benefits by October of this year.

Unfortunately, it’s easy to get overwhelmed by the sheer amount of information out there about Medicare and choosing the right plan. There are multiple parts and certain requirements you have to adhere to—not to mention the onslaught of mail you’ll be getting this year! To help you keep everything straight, here are a 5 simple reminders for anyone turning 65 in 2021.

1. You May Automatically Be Enrolled in Medicare

Anyone within 3 months of turning 65 is eligible to enroll in Medicare, but depending on your circumstance, you will either be enrolled automatically in Medicare or you will have to sign up on your own.

If you already receive benefits from Social Security or the Railroad Retirement Board (RRB), or will receive benefits at least four months before you turn 65, you will automatically be enrolled in Medicare Parts A and B. 

The Social Security Administration or RRB will send you information regarding your Medicare coverage in the mail.

If you don’t currently receive benefits from Social Security or the RRB, however, you will have to sign up on your own.

2. Mark Your Calendar So You Don’t Miss Your Enrollment Window

Your Initial Enrollment Period (IEP) for Medicare is the seven-month window around your 65th birthday — the month of your birthday, the three months before, and the three months after. 

If you miss your window, you could face gaps in health insurance coverage and late enrollment penalties. Missing your IEP window also means you have to wait for another enrollment period such as the Annual Enrollment Period, which begins in October, or the General Enrollment Period, which begins in January.

Of course, there are special circumstances that make you eligible for a Special Election Period (SEP). Losing employer coverage or moving could both make you eligible for an SEP.

3. There Are Consequences For Not Enrolling In Medicare When You Become Eligible

You are technically not required to enroll in Medicare when you turn 65, but in most cases you will incur a penalty surcharge on your monthly premium that you will have to pay as long as you have Part B.

If you still have employer coverage when you turn 65, then the requirements are different. It’s important to talk to a Medicare specialist about your particular circumstance to ensure you don’t incur any unnecessary costs.

4. Explore All Your Medicare Options Before Choosing a Plan

Medicare can be confusing to first-time enrollees, as there are several different options offered. Not every plan, however, is right for every person. You have unique needs and the key is finding the best plan to fit those needs. Your Medicare options include these four parts:

Medicare Part A. This is part of Original Medicare that is for Hospital Insurance. This covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.

Medicare Part B. This is part of Original Medicare that is for Medical Insurance. This covers certain doctors’ services, outpatient care, and preventative services.

Medicare Part C. Part C, or Medicare Advantage, offers bundled plans that combine parts A, B, and even D for maximum coverage.

Medicare Part D. Part D is the prescription drug benefit component of Medicare. It must be added on to Original Medicare (Part A or B) or it can be included as part of a Medicare Advantage Plan.

5. Get an Expert Opinion Before You Enroll

Medicare can be confusing, overwhelming, and difficult to understand for anyone. If you are not sure where to go from here or what plan is best for you, talking to a Medicare expert can help get you going in the right direction.

If you’re entering your Medicare eligibility window, schedule an appointment with a Medicare Advisor in your community who can help you in this transition. 

Not eligible yet but will be in the near future? Explore more of our Medicare Resources. We cover everything from Medicare Advantage to Part D Prescription Drug plans and more!

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