DO Medicare Premiums adjust yearly when income changes ??

[rkser]

I will be going on Medicare next year, in middle of 2021, my MAGI in 2019 (AGI + Tax Exempt Dividends) was below $170k. According to the Medicare, I will not have any surcharge in the Premium in 2021.

Although early to predict accurately, this year I suspect the MAGI may not be under $170400. So how will it effect my monthly Premium in 2022 ?

I am curious to know if Medicare keeps adjusting the premiums every year according to the MAGI 2 yrs back, or is it set the first year and forget. Then you apply each year to decrease the premium when the MAGI is below that year's threshold.

Thanks for any feedback of your experience who is on Medicare.

 

[W2R]

I will be going on Medicare next year, in middle of 2021, my MAGI in 2019 (AGI + Tax Exempt Dividends) was below $170k. According to the Medicare, I will not have any surcharge in the Premium in 2021.

Although early to predict accurately, this year I suspect the MAGI may not be under $170400. So how will it effect my monthly Premium in 2022 ?

I am curious to know if Medicare keeps adjusting the premiums every year according to the MAGI 2 yrs back, or is it set the first year and forget. Then you apply each year to decrease the premium when the MAGI is below that year's threshold.

Thanks for any feedback of your experience who is on Medicare.

My Medicare Part B premium has adjusted each year to my income, as reported in my tax returns. It's not set in stone. I think right now my premium corresponds to my AGI during the year 2018. The last time my premium was lowered, I didn't have to do anything to get it lowered; they just do it without the Medicare recipient having to apply for it.

 

[rkser]

That is good to know, thanks

 

[audreyh1]

Yes, you should get a statement every December notifying you of the new rates starting in Jan.

 

[SecondCor521]

I will be going on Medicare next year, in middle of 2021, my MAGI in 2019 (AGI + Tax Exempt Dividends) was below $170k. According to the Medicare, I will not have any surcharge in the Premium in 2021.

Although early to predict accurately, this year I suspect the MAGI may not be under $170400. So how will it effect my monthly Premium in 2022 ?

I am curious to know if Medicare keeps adjusting the premiums every year according to the MAGI 2 yrs back, or is it set the first year and forget. Then you apply each year to decrease the premium when the MAGI is below that year's threshold.

Thanks for any feedback of your experience who is on Medicare.

If you're married, the threshold is $174K, not $170,400.

Also, the IRMAA brackets are going to be adjusted for inflation starting either this year or next year, but the articles I've seen don't make it clear how those inflation adjusted brackets apply to a given year, since there is the whole two year offset thing.

These two things might give you a bit more breathing room.

 

[audreyh1]

If you're married, the threshold is $174K, not $170,400.

Also, the IRMAA brackets are going to be adjusted for inflation starting either this year or next year, but the articles I've seen don't make it clear how those inflation adjusted brackets apply to a given year, since there is the whole two year offset thing.

These two things might give you a bit more breathing room.

The IRMAA inflation adjustments started this year, and they used 2018 MAGI to determine if you are subject to IRMAA this year.

So 2020 Medicare payments are using 2020 IRMAA thresholds based on 2018 tax return.

 

[SecondCor521]

The IRMAA inflation adjustments started this year, and they used 2018 MAGI to determine if you are subject to IRMAA this year.

So 2020 Medicare payments are using 2020 IRMAA thresholds based on 2018 tax return.

So if I understand correctly now, then since the OP is talking about their 2020 tax return, there will be two years of inflation adjustment to the $174K number that will apply.

So if inflation is 2%, that would make the limit ~$181K.

 

[audreyh1]

For 2022 Medicare payments, yes, two more years of inflation adjustments to IRMAA thresholds compared to 2020 tax return MAGI.

 

[RetireBy90]

I will be going on Medicare next year, in middle of 2021, my MAGI in 2019 (AGI + Tax Exempt Dividends) was below $170k. According to the Medicare, I will not have any surcharge in the Premium in 2021.

As mentioned, Medicare is based on your income from 2 years previous, so when you start Medicare in 2021, IRMAA will be based on 2019 income. Of course you can appeal if your 2019 income was higher than you have in 2020. When DW started in 2019 they used 2017 income which was about 1/3 higher than 2018. I sent 1040 from 2018 and they adjusted IRMAA.