I am turning 65 in October. I’m self-employed and my income is over $250K. Recently, I received a letter from SSA telling me that my monthly Medicare Part B premium of $170.10 would be doubled to $340.20 per month due to my reported income in 2020. That was no surprise, but Social Security also said that the monthly adjustment for prescription drug coverage would be an additional $51.70. What is this all about?
I am in excellent health and take NO prescriptions. What happens if I do not apply for a Medicare prescription drug plan? Do I still have to pay the extra $51.70?
What if a person goes the Medicare Advantage route instead of Original Medicare and a Medicare supplement? Do they get to avoid the additional $340.20 per month for Part B and the $51.70 per month extra premium for a Medicare Part D prescription drug plan? Thanks,
Mike, from Oklahoma City
Sorry, Mike but you cannot avoid the income-related monthly adjusted amount (IRMAA) premiums if your income is above a certain limit no matter if you are enrolled in Original Medicare and a Medicare Supplement or a Medicare Advantage plan with prescription drugs. It is going to happen anyway!
If you are not enrolled in a Part D prescription drug plan, whether stand-alone or with an Advantage plan, you will not receive the additional Part D IRMAA premium. However, it is not a wise decision not to enroll in a Part D plan simply because you are not taking prescriptions at the time you enroll in Medicare.
Social Security bases your income on both you and your spouse (if you are married) whether they are Medicare age or not. The modified adjusted gross income (MAGI) amount that is reported on your yearly income taxes is what triggers the IRMAA increase.
The bottom line is if your income is over these amounts, and you have your Medicare prescription drug plan from either an Advantage with Prescription Drug Plan (Part C) or a stand-alone Medicare Prescription Drug plan (Part D), you will pay the additional IRMAA premium, whether you are deducting your premiums from your Social Security check or paying directly to Social Security because you have not started receiving your Social Security check.
Remember if you are not enrolled in a Medicare Part D prescription drug plan at the right time, you will not have prescription drug coverage and will receive a Part D late enrollment penalty when you sign up later.
At the Toni Says® office, we advise everyone to enroll in a Part D prescription drug plan whether you are taking no prescriptions or a lot of medications. No one wants an additional penalty.
Enrolling in a Medicare Advantage plan instead of Original Medicare with a Medicare Supplement/Medigap and a Medicare Part D plan does not keep Medicare or Social Security from charging the additional IRMAA premium for both Medicare Parts B and D
Because the yearly Medicare and You Handbook are generally mailed out before October 1 the costs and premiums for Medicare for that specific year are not included. Medicare costs and premiums are typically released around November 10th of each year.
What You Don’t Know Will Hurt You!
Turning 65 in America is a milestone and one of the markers is enrolling in Medicare. But the system is so complicated, and there is a lot of false information out there.
In Toni King’s Medicare Survival Guide Advanced: Basics and Beyond, Toni gives you the critical steps you need to enroll in Medicare properly. Toni shares various situations that she has experienced with her many clients during Medicare consultations, and gives you the information and tools you need to enroll on time to avoid the “famous” Medicare Part B and D penalties.
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Learn How to Enroll the Correct Way
• Still Working Past 65
• Turning 65
• VA Benefits
• Laid-off or Retiring
What Medicare Option Is Best for You
• Medicare Supplement vs. Advantage
• Losing Retirement Benefits
How to Avoid
• The Donut Hole
• Part B Penalties
• Part D IRMAA Penalties
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Originally published October 10, 2022