Dear Savvy Senior: Is there anything I can do to reduce my high Medicare premium surcharges? Because of my past income, I pay $329.70 per month for my Part B premium and $64.50 a month for Part D, but my income has dropped since I retired. Do I have any options? — Overcharged Andy
Dear Andy: If you’re hit with a higher premium for Medicare Part B and Part D and you think it’s unjustified, you can ask Social Security to revisit its decision and perhaps reduce your cost. Here’s what to know.
Many retirees don’t realize that monthly premiums for Medicare Part B (coverage for doctor’s services and outpatient care) and Part D (prescription drug coverage) are based on your modified adjusted gross income from two years earlier. So, to determine your 2023 Medicare premium, Social Security uses your 2021 tax return. In those two years, however, your life can change in ways your 2021 tax return and current Medicare premium don’t reflect. Sometimes those changes are enough to convince Social Security that your Medicare premium should be reduced.
Part B’s standard monthly premium in 2023 is $164.90 for people earning $97,000 or less; it’s $194,000 or less for joint filers. Anyone whose income exceeds those thresholds pays a higher premium, also known as an Income-Related Monthly Adjustment Amount (IRMAA), or surcharge.
The higher monthly premiums rise steadily from $230.80 to $560.50 through five income tiers. The same tiers apply to IRMAAs for Medicare Part D, with enrollees paying an extra $12.20 to $76.40 per month depending on their income.
About 7%, or 4.4 million higher-income Medicare beneficiaries, pay a surcharge on their monthly Part B and/or Part D premiums.
Reasons for appealing
In certain situations, Social Security will recalculate your premiums — known as a redetermination — for Part B and Part D, particularly if the agency based the cost on a tax return that was later amended.
Otherwise, there are seven life-changing events that qualify for a redetermination if they hurt your income: marriage, death of a spouse, divorce or annulment, reduced work hours or retirement, involuntary loss of income-producing property, the loss or reduction of some types of pension income and an employer settlement payment because the company went bankrupt or reorganized.
Filing a claim
To ask Social Security for a redetermination, you’ll need to complete Form SSA-44. (Go to SSA.gov/forms and enter “SSA-44” in the search bar, then click on the link below it.)
Include supporting documents, such as the death certificate for a spouse or a letter from a former employer stating that you’re now retired. If you filed your federal income tax return for the year that your income was reduced, you will also need to provide a signed copy.
A decision usually takes a few weeks, but if you had one of the events that Social Security considers life-changing, you should win the appeal.
In that case, Social Security will reimburse you for the additional premiums by adding it onto one of your monthly benefits. If you are on Medicare but haven’t started collecting Social Security, you should see a credit on a future invoice.
If your request for a redetermination is denied, there are three additional levels of appeals you could try: to the Office of Medicare Hearings and Appeals, to the Medicare Appeals Council and finally to the federal district court where you live.
For more information on the rules for high-income beneficiaries, see SSA.gov/benefits/medicare/medicare-premiums.html.
Jim Miller is a contributor to NBC-TV’s “Today” program and author of “The Savvy Senior.” Send your questions to Savvy Senior, P.O. Box 5443, Norman, OK 73070; or visit savvysenior.org.
By participating in online discussions you acknowledge that you have agreed to the Terms of Service. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. If your comments are inappropriate, you may be banned from posting. Report comments if you believe they do not follow our guidelines.
Having trouble with comments? Learn more here.