IRMAA...Does the Money Grab Never End?

[TrvlBug]

I knew about the IRMAA for Medicare and we're stuck paying 200% of the base Medicare premium. Unfortunately, or fortunately, depending on how you look at it, our income will most likely increase during retirement when DH turns 70 next year and takes SS as well as RMDs so no relief there.

We just received notice that our IRMAA for his Part D is 300% of the program's base premium. DH takes a cheap generic costing $14/mo. w/o RX insurance. His monthly premiums including the IRMAA is $52/mo. I guess he's the young buck paying for the oldsters.

I was under the impression our medical costs would decrease somewhat once we're Medicare eligible and off the company insurance...no such luck. Rant over.

 

[Sunset]

It's a plot, so that you can feel better about getting sick

 

[pb4uski]

If it really bugs you you can just not buy Part D or switch to a Medicare Advantage plan that includes drug coverage.

https://www.mymedicarematters.org/2015/09/should-you-enroll-in-part-d-a-guide/

Enrolling in original Medicare (Parts A and B) is mandatory, while prescription drug coverage (Part D) is optional. You can also enroll in an optional Part C/Medicare Advantage plan instead of Parts A, B and D, as it covers the mandatory Parts A and B (and usually includes drug coverage as well).

 

[REWahoo]

If it really bugs you you can just not buy Part D or switch to a Medicare Advantage plan that includes drug coverage.

+1

You may not find a lot of sympathy here about paying more for health insurance due to having a high income in retirement. Try to look at it a small cost of financial success.

 

[John Galt III]

Ah feel yore pain. When I have to go off Obamacare and the huge subsidies, I'll get "hammered" by Medicare premiums and copays and higher max out of pocket. Medicare will be the end of Nirvana, not the start.

 

[athena53]

Yeah, that stinks, especially when you take into account the fact that people paying the IRMAA most likely paid far more in payroll-based Medicare premium over their working lives than the average worker. We got stuck with IRMAA when I was still employed and DH was on Medicare.

The other "money grab": I see a ton of FB memes every year whining about how SS recipients didn't get a COL increase in SS. I know the inflation measure they use somehow tends to understate the COL increases most of us experience. They are, however, protected from having their SS go down due to higher Medicare B premiums being deducted. Fictional example: Your monthly check is $1,500 but $200 is deducted for Part B so you get $1,300. Next year you get a COL increase which would raise it to $1,550 gross but your Medicare B premium goes to $300. While that would give you a new net SS payment of $1,250, your payment actually stays at $1,300. So, in this example, $50 of the increase in Medicare B is "forgiven".

This "hold harmless" provision does not apply if you pay IRMAA. New recipients also pay the full Part B premium. I am not looking forward to that.

 

[MichaelB]

The un-subsidized total cost for health care insurance for someone age 65 or older is in the range of $1000 - $1200 per person per month. The unsubsidized cost for an exchange policy with similar coverage at age 64 is probably around $1500. Group employer coverage is less, around $750 or so, but that is because group insurance does not price for age difference. If it did price for age that $750 would at least double.

The cost of health care insurance does decrease once we reach Medicare age, and it is subsidized, so no one pays full price. The subsidy, however, declines as income increases, and this gives the appearance of higher prices.

The reality is health care in the US is expensive.

 

[kaneohe]

Since you can't do much about it, perhaps it may lessen the pain to think about it differently. Instead of thinking about it as paying 200% of a significant expense and 300% of a smaller one, since it is AGI-based, think about it as paying 10% more in income taxes or perhaps as 3.7K/yr more or 1.5% more of AGI.

 

[audreyh1]

I don't understand. Insurance costs drop when you go on Medicare compared to individual policies even paying for all "parts" plus deductibles are much lower. If your income is low enough to get a good subsidy under Obamacare, you shouldn't be paying 2X Medicare premiums.

If your income is going up because of additional income from Social Security and RMDs - oh, well! Still - deductibles are much lower.

Maybe I'm missing something.......

(No subsidized health insurance for us!)

Maybe it's going from company health care to Medicare.....

 

[rodi]

I'm on the other side of this coin - and thrilled that DH will be going on medicare.

If I ignore the ACA premium tax credits for DH - his medical insurance will cost less and significantly improve when he goes on medicare in Jan. Because of a glitch/feature of Covered CA we can't get the premium tax credit up front - and get it back at tax time... This is because DH is on a different policy/carrier than DS's and I.

Unsubsidized current insurance $580/month for a HDHP. We pay 100% of charges for first $4500/year.

Medicare Part A, B, D, and F will run a lot less - cover a lot more (no high deductible) offer a wider network (all doctors that take medicare), etc. We'll be exchanging a crappy plan for a much more Cadillac plan and paying less.

Even when we factor in the smaller subsidy for the rest of the family - we're still a few hundred dollars ahead per month.

 

[TrvlBug]

I don't understand. Insurance costs drop when you go on Medicare compared to individual policies even paying for all "parts" plus deductibles are much lower. If your income is low enough to get a good subsidy under Obamacare, you shouldn't be paying 2X Medicare premiums.

If your income is going up because of additional income from Social Security and RMDs - oh, well! Still - deductibles are much lower.

Maybe I'm missing something.......

(No subsidized health insurance for us!)

Maybe it's going from company health care to Medicare.....

Yep, going from company health care to Medicare for DH:

Company insurance (cadillac plan):

$1,800 employee premium costs
3,000 OOP
4,800 per year max.

Medicare:

$2,940 Part B @ $245/mo.
2,000 Plan F (can't remember the exact amt, but annual premium was >$2K
624 Rx premium (cheapest plan out there now)
$5,564 per year + donut hole/potential Rx co-pays/better Rx plan premiums

I suspect our Medicare costs will increase when I have to take RMDs. IIRC IRMAA doesn't stop at 200%. The upside is that my health care costs will drop substantially once I'm Medicare eligible as I'm paying full freight for my retiree company health plan which totals about $11K/yr. taking OOP into account.

 

[rodi]

Your part D (drug) plan seems high. I'm looking at the Humana/Walmart plan - $17/month or $204/year. 1/3 the price

 

[REWahoo]

Your part D (drug) plan seems high. I'm looking at the Humana/Walmart plan - $17/month or $204/year. 1/3 the price

Op said the new cost was 3X the base amt:

We just received notice that our IRMAA for his Part D is 300% of the program's base premium.

 

[rodi]

Oops - missed that. Thanks for clarifying REWahoo

 

[1-31-18]

I knew about the IRMAA for Medicare and we're stuck paying 200% of the base Medicare premium. Unfortunately, or fortunately, depending on how you look at it, our income will most likely increase during retirement when DH turns 70 next year and takes SS as well as RMDs so no relief there.



We just received notice that our IRMAA for his Part D is 300% of the program's base premium. DH takes a cheap generic costing $14/mo. w/o RX insurance. His monthly premiums including the IRMAA is $52/mo. I guess he's the young buck paying for the oldsters.



I was under the impression our medical costs would decrease somewhat once we're Medicare eligible and off the company insurance...no such luck. Rant over.

Just finding out about IRMAA myself....

Looks like DW and I, filing jointly, will pay “maximum IRMAA” for the two years following my retirement. Don’t know how to avoid it, other than by telling my partners to pay me a lot less — forget that.

Can someone here please tell me what the premiums are for Part B and Part D, for those at the highest level of IRMAA (above $750K)? If not exact figures, then estimates, please. I’m just trying to wrap my head around this.

 

[gerntz]

Wish I was paying maximum IRMAA.

 

[NW-Bound]

If they don't grab money from people who have it, from whom do they grab?

But seriously, everyone on Medicare is subsidized. People with money are just subsidized less. It is as MichaelB describes below.

My mother who is not rich complained bitterly about having to pay more than people she knows, some of them even got free healthcare.

The un-subsidized total cost for health care insurance for someone age 65 or older is in the range of $1000 - $1200 per person per month. The unsubsidized cost for an exchange policy with similar coverage at age 64 is probably around $1500. Group employer coverage is less, around $750 or so, but that is because group insurance does not price for age difference. If it did price for age that $750 would at least double.

The cost of health care insurance does decrease once we reach Medicare age, and it is subsidized, so no one pays full price. The subsidy, however, declines as income increases, and this gives the appearance of higher prices.

The reality is health care in the US is expensive.

 

[pb4uski]

.... Can someone here please tell me what the premiums are for Part B and Part D, for those at the highest level of IRMAA (above $750K)? If not exact figures, then estimates, please. I’m just trying to wrap my head around this.

I think this is it. FWIW, I would gladly pay the extra $13,632 to have $576k more income... that's 2.37%.

 

[RobbieB]

Gotta love rich people whining about taxes.

 

[Niuatoputapu]

Wish I was paying maximum IRMAA.

Me too!

 

[statsman]

We're in that area for my DW this year because of our Silicon Valley house sale back in October 2018. Owned the house for 23 years, and it sold for 4 times what we paid for it. So, she's at maximum Medicare Part B premium and Part D surcharge for this year. This is a one-time hit as our income moving forward will be nowhere near where the OP's will be. Most can only wish for that type of first-world problem.

 

[youbet]

It seems like whining about paying IRMAA after age 65 is akin to whining about about no ACA subsidy before age 65. In both cases, I suppose it's good news since both paying IRMAA and getting zero ACA subsidy are indicators of higher, over-threshold, incomes.

 

[1-31-18]

I think this is it. FWIW, I would gladly pay the extra $13,632 to have $576k more income... that's 2.37%.

Thanks for the data. For a couple, is that 1x $491.60 per month, or 2X? Suspect it’s 2X, or basically $12K per year, in which case Medicare presents no savings whatsoever to me and DW.
We sure as hell get taxed for it, though. Wealth transfer, pure and simple.

And the $76.40 surcharge — 1x, or 2X?

If anyone has a feel for what the basic Part D coverage charge would be, to which the surcharge is added, that would be helpful, too. I understand that there are many competing plans, so it might be hard to generalize. Just looking for a general idea.

More annoying than the steep progression in these costs is the complete surprise. I will pay steep premiums next year and the year after based on what I earned last year and the year before. And I was supposed to know this? Glad I found out at this forum, so I can budget for it.

 

[braumeister]

FWIW, the numbers shown are per person.

Without IRMAA, each person would pay $144.60 per month for Part B.
At the highest level, each would pay $491.60 per month. Similarly for the Part D numbers. So it would be $11,798.40 for both people for Part B.

 

[Souschef]

Gotta love rich people whining about taxes.

I am not rich, but most of our AGI is made up of 85% of my SS plus our RMD's.