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Getting Medicare Part B premium reduced?
11-29-2017, 10:46 AM
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#1
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Recycles dryer sheets
Join Date: May 2006
Location: Vienna
Posts: 226
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Getting Medicare Part B premium reduced?
Next year I'll have to sign up for Medicare. The part B premium has a surcharge for high incomes but apparently you can ask for a reduction if you have evidence to back it up. Our joint income does push us over the first threshold and into the second, but specifically in 2016 I had some large one-time capital gains that would push me into an even higher premium slot for the 2018 signup. If they do ding me, what I was going to do is send in my 2014-2017 tax returns showing the atypical one-time bump. Any idea on the probability of success?
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11-29-2017, 11:05 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 2,612
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Have you talked to Medicare? They can tell you what they will do, and how to apply for an exception.
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Only got A dimple, would have preferred 2!
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11-29-2017, 11:18 AM
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#3
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,357
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They will only consider things on their short list of "life-changing events": - The death of a spouse
- Marriage
- Divorce or annulment
- You or your spouse stopping work or reducing the number 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
You need to send in Form SSA-44 to request a reduction.
__________________
I thought growing old would take longer.
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11-29-2017, 01:04 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 4,172
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Agree w/ braumeister. Your event is not listed there so chances near zero.
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11-29-2017, 01:08 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,882
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Note that the surcharge is recalculated annually so it isn't a lifetime ding, just a one-year ding in the case of the OP.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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11-29-2017, 02:56 PM
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#6
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Recycles dryer sheets
Join Date: May 2006
Location: Vienna
Posts: 226
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Thanks everyone. Took a look at the form and I'm probably screwed for the first year, after which the surcharge would revert. However, one or both of us may retire next year, so maybe could use the "Work Stoppage" or "Work Reduction" option.
That begs the question, how do people "document" their retirement if they retire early and don't plan on taking SS benefits until age 70?
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11-29-2017, 03:37 PM
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#7
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,357
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A letter from your employer acknowledging your retirement is what they generally want to see.
__________________
I thought growing old would take longer.
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12-03-2017, 09:43 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,932
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Quote:
Originally Posted by madsquopper
Thanks everyone. Took a look at the form and I'm probably screwed for the first year,
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Join the crowd. Well maybe not much of a crowd on this forum. I just got my annual letter from Medicare and again my IRMAA will force me to pay $428 (if I remember the #s correctly) a mo for part B . Talk about unfair. I paid "a lot" into the system all my working years and now that I'm retired, I pay more than 3 times the normal rates for the same coverage as everyone gets.
Can you say means testing.
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12-03-2017, 09:56 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
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Quote:
Originally Posted by Car-Guy
Join the crowd. Well maybe not much of a crowd on this forum. I just got my annual letter from Medicare and again my IRMAA will force me to pay $428 (if I remember the #s correctly) a mo for part B . Talk about unfair. I paid "a lot" into the system all my working years and now that I'm retired, I pay more than 3 times the normal rates for the same coverage as everyone gets.
Can you say means testing.
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It should be noted that the medicare part of FICA only pays for part A not part B. Part B is paid for by general revenue. So congress in its wisdom decided that the higher income should not get as large a subsidy for part B.
For 2018 the limits to reach the various levels were decreased to pay for the fix in payments to physicians etc in part B.
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12-03-2017, 10:04 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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Quote:
Originally Posted by Car-Guy
Join the crowd. Well maybe not much of a crowd on this forum. I just got my annual letter from Medicare and again my IRMAA will force me to pay $428 (if I remember the #s correctly) a mo for part B . Talk about unfair. I paid "a lot" into the system all my working years and now that I'm retired, I pay more than 3 times the normal rates for the same coverage as everyone gets.
Can you say means testing.
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Yes, it’s means testing on Medicare. If you have a lot of income, you pay much, much higher premiums.
Part B is paid through general revenue and premiums.
Quote:
- Part A is financed primarily through a 2.9 percent tax on earnings paid by employers and employees (1.45 percent each) (accounting for 88 percent of Part A revenue). Higher-income taxpayers (more than $200,000/individual and $250,000/couple) pay a higher payroll tax on earnings (2.35 percent).
- Part B is financed through general revenues (75 percent), beneficiary premiums (23 percent), and interest and other sources (2 percent). Beneficiaries with annual incomes over $85,000/individual or $170,000/couple pay a higher, income-related Part B premium reflecting a larger share of total Part B spending, ranging from 35 percent to 80 percent. The ACA froze the income thresholds through 2019, and beginning in 2020, the income thresholds will once again be indexed to inflation, based on their levels in 2019 (a provision in the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA4). As a result, the number and share of beneficiaries paying income-related premiums will increase as the number of people on Medicare continues to grow in future years and as their incomes rise.
- Part D is financed by general revenues (78 percent), beneficiary premiums (13 percent), and state payments for dually eligible beneficiaries (9 percent). As for Part B, higher-income enrollees pay a larger share of the cost of Part D coverage.
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https://www.kff.org/medicare/issue-b...and-financing/
__________________
Retired since summer 1999.
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12-03-2017, 10:27 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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Quote:
Originally Posted by Car-Guy
Join the crowd. Well maybe not much of a crowd on this forum. I just got my annual letter from Medicare and again my IRMAA will force me to pay $428 (if I remember the #s correctly) a mo for part B . Talk about unfair. I paid "a lot" into the system all my working years and now that I'm retired, I pay more than 3 times the normal rates for the same coverage as everyone gets.
Can you say means testing.
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Ouch, what a blow.
This past year I had to pay $187.50/month for Part B instead of the lowest amount, because in 2015 I mistakenly sold too much of my portfolio to get cash to pay for my dream house in cash. So, my 2015 AGI was higher than usual. I should have got a temporary loan, because I was only a little bit over the threshold, but oh well, oops.
Anyway, I didn't submit the SSA-44 form, and even if I had it wouldn't help because I haven't had any life changing events other than not buying a new dream house in cash every single year. As you might imagine, that wasn't on their list of life changing events.
Also I did not call Medicare about it or anything because for some reason I thought they'd reduce it automatically.
I haven't yet received my annual letter from Medicare. I am convinced that we have the worst local postal service in the country, and anyway they are very slow and frequently mis-deliver mail. I looked online a couple of weeks ago for info about what I'll be paying in 2018, but didn't see it; I'll look again after I finish this post.
Hoping for the best, but fearing I might have to pay the higher amount this coming year too.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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12-03-2017, 01:41 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Aug 2006
Posts: 2,433
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Quote:
Originally Posted by W2R
Hoping for the best, but fearing I might have to pay the higher amount this coming year too.
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You shouldn't have to, since it is based on your 2016 tax return.
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I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
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12-03-2017, 01:44 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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Quote:
Originally Posted by FIRE'd@51
You shouldn't have to, since it is based on your 2016 tax return.
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Oh good! My 2016 AGI is nice and low. With any luck I won't have any trouble, then. Anyway, I should find out soon....
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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12-03-2017, 01:51 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
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Note the amount is based on AGI plus tax free bonds. (MAGI)
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12-03-2017, 02:14 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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I hadn't found out anything about it on mymedicare.gov, so just now I got a bright idea.... and logged into ssa.gov . And what a nice surprise I found there! After much searching, I found that I will be paying $134/month for Part B after December 2017.
WHEW! It's nice to not be paying $187.50 any more. And it was interesting to find out that everything just sort of happened all by itself, automatically, without requiring any input from me whatsoever. Just as somebody told me in a post some months ago (braumeister maybe? I have forgotten who but one of our knowledgable forum members).
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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12-03-2017, 02:22 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,932
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Quote:
Originally Posted by W2R
I am so happy to know that everything just sort of happened all by itself, automatically, without requiring any input from me whatsoever.
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Your input was your 2016 tax return. Unfortunately, it is automatic for increase in premimuns too.
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12-03-2017, 02:38 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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Quote:
Originally Posted by Car-Guy
Your input was your 2016 tax return. Unfortunately, it is automatic for increase in premimuns too.
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Yes, I did notice that... Thank goodness in my case, it was just temporary despite my fears.
I wish that was the case for you, too! I'd hate to be paying as much as you are.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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12-03-2017, 02:41 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Jun 2004
Location: W Wash
Posts: 1,644
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If you think the step-ups in rates are unpleasant now, just wait for next year and beyond when the brackets change and it is much easier to find yourself in the third and up tiers
See-New Medicare Premium Brackets--2018 http://www.early-retirement.org/foru...8-a-89561.html
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12-03-2017, 02:46 PM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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Quote:
Originally Posted by nwsteve
If you think the step-ups in rates are unpleasant now, just wait for next year and beyond when the brackets change and it is much easier to find yourself in the third and up tiers
See-New Medicare Premium Brackets--2018
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Luckily, there is not a penny increase for those of us single people with income under $133K. However it looks like for the high earners it is going to be a real punch in gut.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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12-04-2017, 08:21 AM
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#20
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Full time employment: Posting here.
Join Date: Sep 2012
Location: Albuquerque
Posts: 842
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Quote:
Originally Posted by SecondCor521
Note that the surcharge is recalculated annually so it isn't a lifetime ding, just a one-year ding in the case of the OP.
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It took me some digging to confirm that the premium was automatically recalculated annually as most of the literature focuses on the life changing events. My Medicare Part B premiums starting in 2020 will be based on 2018 AGI. My original plan was to keep the AGI slightly below $85K but I'm concerned that this will limit my travel and other retirement choices. Plan B is to withdraw extra from my 401k up to the $107K threshold one year and alternate to below $85K the next year to save $642 every other year, assuming no change in tax bracket.
One frustration is that I don't actually need Part B as I have employer health benefits (e.g., FEHB) in retirement. But I'm concerned about future changes to FEHB and feel more comfortable with both even if I am "over insured."
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Retired on 9/30/2017 at age 62
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