A Tip to Cut Health Insurance Expenses
If you are like many of our clients with significant income leading into retirement and are enrolled in Medicare, you may be hit with an Income-Related Monthly Adjustment Amount (IRMAA). The Social Security Administration (SSA) determines whether or not you owe IRMAA based your income tax return from two years ago. This creates a problem for many since they likely made much more money two years ago (when working) then they will in their first year of retirement. For example, the base Part B premium in 2019 for married joint filers with income of $170,000 or less is $135.50/month. For married joint filers with income over $750,000, the premium is $460.50/month.
You can appeal the IRMAA “penalty” if you’ve had a life changing event that lowered your income. Examples include:
- The death of a spouse
- Marriage
- Divorce or annulment
- You or your spouse stopping work or reducing the numbers of hours you work
- Involuntary loss of income producing property due to a natural disaster, disease, fraud, or other circumstances
- Loss of pension
- Receipt of settlement payment from a current or former employer due to the employer’s closure or bankruptcy
We typically help our clients appeal due to retirement. Continuing our example, if you can prove your income has changed from retirement and now less than $170,000, a couple could save $7,800/year by filing out a simple form (with some supporting documentation) requesting the adjustment.
We hope you found this tip helpful. Please reach out to our office with any questions.
Source: https://www.medicare.gov/your-medicare-costs/part-b-costs