For those with an income above a certain amount, they may be required to pay an Income-Related Monthly Adjustment Amount (IRMAA) in addition to their Part B premium and Part D premium. The Social Security Administration determines if you owe an IRMAA based on the income you reported on your IRS tax return two years prior. If you feel you’re higher Part B premium is incorrect, there are steps you can take to appeal IRMAA.
What is the Income-Related Monthly Adjustment Amount for Medicare (IRMAA)?
Most enrollees have their Part B premium taken out of their Social Security check before the beneficiary gets the deposit. If you are not earning income benefits with Social Security, you will typically receive a bill. Those in the highest income bracket can pay considerably more for their Medicare Part B costs. Social Security will determine what you pay based on your modified adjusted gross income (MAGI), as reported by the IRS.
A Request for Reconsideration is a petition you can file with the SSA to reduce your Part B premium. You should submit a Request for Reconsideration if there is a valid reason you believe you should not have to pay the higher premium.
Part B Premiums for High-Income Beneficiaries Who are Married Filing Jointly
Below are the premium brackets for those with a single and joint file income status.
Modified Adjusted Gross Income Amount (MAGI)
Your Modified Adjusted Gross Income amount is made up of your total adjusted gross income in addition to any tax-exempt interest income. On your IRS Form 1040, these are line items 37 and 8b; if you are unsure of your MAGI, you can quickly figure it out by looking at your tax return records. Income examples that you may have reported on your tax return would include wages, dividends, alimony received, rental income, investment income, capital gains, farm income, and SSA benefits.
Deduction examples that you may have taken on your tax return would be things like alimony paid, tuition, student loan interest, and retirement plan contributions.
If the SSA determines that you owe a higher premium based on your MAGI, they will notify you of your new amount by mail. This notice is called an initial determination, and the notice should include information on how to request a new initial decision.
If you think the income information Social Security used to determine your Income-Related Monthly Adjustment Amount was incorrect or outdated, you can also request them to revisit the decision.
If this is the case, you may need to contact the IRS and correct that information before you file the appeal. Fixing the issue may be as simple as filing an amended tax return.
A new initial determination is a revised decision that the SSA makes regarding yourIncome-Related Monthly Adjustment Amount. If you have experienced a life-changing event that caused a decrease in income, you can request that the SSA revisit its decision.
If you do not know why you are paying an IRMAA, you can call the Social Security hotline.
Situations where Social Security Considers Being Life-Changing Events
- Spousal Death
- You or your spouse stop working or reduce the number of hours worked
- Involuntary loss of income-producing property due to a natural disaster, disease, fraud, or other circumstances
- Pension loss
- Receipt of the settlement payment from a current or former employer due to the employer’s closure or bankruptcy
You can appeal your Medicare Part B premium increase for outdated or incorrect information when you:
- Filed an amended tax return with the IRS
- Have a more recent tax return that shows you are receiving a lower income than previously reported
You can request a new initial determination by submitting a Medicare IRMAA Life-Changing Event form. You can also schedule an appointment with Social Security. Documentation will be required with either your correct income or of the life-changing event that caused your income to go down.
When you move into retirement, it’s common for you to stop working or work fewer hours. Retiring can impact your monthly income quite a bit and be must less than when you were working.
For example, if you were single with an income of $95,000 when you retired in 2019. Then in 2021, when you retire, your income is only $45,000 from Social Security and IRA distributions. If this is the case, then you should not have to pay a higher Part B premium based on your former income.
How to Appeal the IRMAA Decision
If requesting a new initial determination is not an option, you have the right to file an appeal for your Medicare Part B premium increase. Requesting a reconsideration is also referred to as appealing an Income-Related Monthly Adjustment Amount decision.
Social Security does not have a strict timeframe in which they must respond to a reconsideration request. If you have questions about your appeal status, it is best to contact the agency currently reviewing your appeal.
If you can demonstrate a change in your income, it does not hurt to try to file an appeal. An appeal will not cost you anything, and if you state your case well enough, you may save yourself some money.
If you want to appeal your IRMAA, you should visit the Social Security website for the form called Request for Reconsideration. The form will give you three options on how to appeal, with the easiest and most common way being a case review.
Documentation is an essential thing in any appeal. You should write a cover letter explaining how you think you’re being overcharged. Then you will need to provide backup documentation.
What Documentation Do I Need to Appeal IRMAA
- A letter from your former employer confirming your retirement.
- A copy of your last pay stub to show your decreased income.
- Any official documents that support your case.
If you have a successful appeal, Social Security will automatically correct your Medicare Part B premium amount. If you’re denied, they will provide instructions on how to appeal the denial to an Administrative Law Judge. While you are in the process of the appeal, you will continue to pay the higher Medicare Part B premium.
How to Get Help With the IRMAA
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