Many people don’t realize that their Medicare premiums are income-tested. The higher your income is, the higher your Medicare premiums are, which is also known as the income-related monthly adjustment amount (IRMAA). If you are on Medicare, the Social Security Administration (SSA) determines your premium by looking at your income two years prior. So, for 2021, the premiums are based on your 2019 tax return. The SSA will usually send out determination letters in early December. These are the 2021 rates, depending on your income:
If you are paying IRMAA, you may have grounds to appeal that premium, if you experience a life-changing event. The following events qualify as life changing:
If you meet any of these criteria, then you would file a Medicare premium appeal, using the form available on HHS.gov.
If you are not receiving Medicare yet, you should consider implementing the following planning strategies for when you do receive benefits:
Keep in mind that these strategies can’t be used in isolation; they have to be looked at in terms of a multi-year financial plan. Your Bluerock Wealth managers can help you assess that plan.
As always, let us know if you have any questions!
Raj
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