Medicare High Income premiums

[Katsmeow]

As many no doubt know Medicare charges higher premiums for Part B and Part D if your income is above a certain amount.

DH went on Medicare late last year. For 2013 they base premiums on the 2011 tax return which has an income high enough to trigger the extra premium. For 2014, they will use the 2012 tax return which will also be high enough to trigger the extra premium.

However, if you have what is referred to as a "life changing" event then you can prove that to SS and then your Medicare premiums will be based upon that lower amount.

One of the life changing events if is a spouse stops work. I plan to stop work sometime during this year. Our income for this year will not be high enough to trigger the extra premium.

I know that once I stop work he can provide proof to SS and therefore his 2014 medicare premiums will be based upon this year's income instead of being based upon 2012 income.

But - here is my question - If I quit work during 2013 can the reduced income in 2013 cause his current 2013 premiums to be reduced during 2013?

That is, I know that my quitting work will reduce premiums for 2014, but will it do anything to reduce the 2013 premiums (I am thinking not but wonder if anyone has experienced this).

 

[KingB]

This is our experience.
DW and I retired 2011. DW became eligible for Medicare 2012 and she has the extra premium because of our 2010 earnings. SS already knew our retiree situation for over a year and they still stuck her with the extra premium. Since we did not have high enough earnings for 2011 (year of retirement), her premium went down this year 2013.
I don't think that you will get your premiums reduced this year. NOR for next year 2014 either because of your earnings in 2012.

 

[Katsmeow]

I don't think that you will get your premiums reduced this year. NOR for next year 2014 either because of your earnings in 2012.

I know for sure we can get premiums reduced in 2014. When DH became eligible for medicare in 2012 they were going to use the 2010 tax return which would have caused even higher premiums. We went in and showed them the 2011 tax return and so he got lower premiums in 2012 because he had retired in 2010.

This is the form we will fill out for sure to get lower premiums for 2014 since I will retire during this year:

http://www.ssa.gov/online/ssa-44.pdf

My only question is whether we can use the retiring this year to get lower premiums this year. I'm thinking we don't.

 

[Dreamer]

If you look at page 6 on the downloaded instructions, it appears to me that you could get lower premiums this year. It is talking about having lower income in 2013 and having your premiums adjusted.

Note: I have no experience with this and I am just having my first cup of coffee, so I would look at it and check with SSA.

 

[Katsmeow]

Yes, I agree. Once I retire and can prove lower income it will be worth talking to them.

 

[FIRE'd@51]

I would also like to point out that selling your primary home for a capital gain of more than $500K ($250K if single) can trigger the higher Medicare parts B and D premiums if the excess capital gain pushes your AGI above the threshold amount.