Is Medicare IRMAA a big deal?

[ShokWaveRider]

Sorry if someone already answered - I'm just now catching up with the thread...

Supplement (Medigap) is not subject to IRMAA. "Just" Part B and D premiums

That was not my question. It was if Part B, D + Medigap was included in the $1,000. As previously answered Medigap was not included.

 

[RetMD21]

My husband and I are on Medicare but we have never been subject to IRMMA. Looks like we will be subject to IRMMA in 2023, in the $194,000 to to $246,000 bracket. I looked at how much this will cost us and using the 2023 tables it looks like for each of us it will be under $1000 annually for combined medicare and part D penalty. Am I right on this? Does not look like IRMMA will be a big deal for us.

Right, if you are paying IRMAA you can afford it. I didn't anticipate it, don't like it, and especially don't like the inclusion of tax exempt dividends.

Of course the cost is higher with the upper levels but even with level 5 IRMAA including B and D for 2 is just the $11328 which is just 1.5% of the minimum income level of 750 k to be in that bracket. Annoying but affordable, IMO.

 

[meierlde]

Don’t give them any ideas. Of course I am sure this is already on their radar.

Of course if you look at the formula for ss benefits there are 2 cliffs (bend points) where the percentage of income is reduced YOu get 90% of income replaced up to13380/year , 30% up to 89652 and 15% above that amount. I see when the new social security taxes come in a 3 third bend point at abou 147000 per year and 5 or so percent replacement of income above 147000. So even today social security is means tested. (Assuming using the average income over thirty five years indexed for inflation is means testing.

 

[jimbee]

Fair isn't always equal.

 

[ShokWaveRider]

This is a pretty futile discussion, rulez are rulez, you cannot fight them. In this case they are actually fair, a rear occurrence.

 

[euro]

Right, if you are paying IRMAA you can afford it. I didn't anticipate it, don't like it, and especially don't like the inclusion of tax exempt dividends.

Of course the cost is higher with the upper levels but even with level 5 IRMAA including B and D for 2 is just the $11328 which is just 1.5% of the minimum income level of 750 k to be in that bracket. Annoying but affordable, IMO.

I tend to agree. I will be entering Medicare next year and I inadvertently managed to work myself into a very high IRMAA level because I sold a rental property last year and didn't realize that IRMAA looks back a couple of years....
Oh well, yes, it is painful but I'll be ok. I don't mind paying a little more if it means those less fortunate can have access to decent healthcare also.

 

[Midpack]

We’re paying $1,874.40 total in IRMAA premiums in 2023 for DW and I. And like it or not we’re stuck paying them until we’re done with Roth conversions, but I knew that would hit us. After Roth conversions the penalties will go away. I’m not sure I understand those who say they can avoid them without some special circumstances, and without explaining…

 

[youbet]

This is a pretty futile discussion, rulez are rulez, you cannot fight them. In this case they are actually fair, a rear occurrence.

Yes, those "rulez" do get you in the "rear" as you say.........

 

[Car-Guy]

Yes, those "rulez" do get you in the "rear" as you say.........

 

[bizlady]

If just starting Medicare- and recently retired or reduced income, keep in mind that Medicare premiums are set based on your income from TWO YEARS AGO. So IRMAA for 2023 is based I believe on reported income from 2021.

You can file for a re-evaluation after you first receive your Medicare cost notice. Life events may trigger this, and if approved, reduce your premium.
More info here:
https://www.hhs.gov/about/agencies/omha/the-appeals-process/part-b-premium-appeals/index.html

 

[TheWizard]

Saying that people with a specific unmodifiable income are wealthy or well off financially but not having information on their specific finances or expenses is very short sighted.

You're certainly correct.
In my case, I have higher than average retirement income, filing single. I invest excess retirement income into stock index funds.

I'm in the middle of the IRMAA tiers, and while it would be nice to have a couple thousand additional dollars each year from not having to pay IRMAA, it's not going to make a bit of difference in my lifestyle.
YMMV...

 

[Irishgirlyc58]

Yes. I’m on Advantage too (employer retiree health plan) and pay IRMAA B & D.

I think terminology as it has grown and used is one of the most confusing things about the Medicare adventure.

Hold on! I thought I read on Medicare.gov ( or maybe it was somewhere less reliable) that if you had an advantage plan that included D you didn’t pay the irmaa premium.
Are you saying that they do charge that? How does that happen if you don’t have separate a plan D premium?
My former employer offers a MA plan but it is not cheap.
Not paying IRMAA for D is part of my analysis on cost effectiveness.

 

[youbet]

Right, if you are paying IRMAA you can afford it.

Well, it's true that YOU can afford it. But why not let the rest of us speak for ourselves based on our own particular situations?

Of course the cost is higher with the upper levels but even with level 5 IRMAA including B and D for 2 is just the $11328 which is just 1.5% of the minimum income level of 750 k to be in that bracket. Annoying but affordable, IMO.

This isn't a good example. Folks with less income get hit harder (intentionally) by our oh-so-fine politicians. For example, the next bracket down begins at $366k for MFJ. That hapless couple pays $8702.4 extra premium via IRMAA which is 2.38% of their income. That's significantly higher than the 1.5% the level 5 folks pay in your example.

Why our leaders carefully designed a system where a couple with a IRMAA MAGI of $366k would pay a higher percentage of their income as a premium increase than a couple with $750k IRMAA MAGI baffles me. But, it's our government busy taxing lower income folks higher than higher income folks once again.

Paying taxes is one thing. Paying taxes that are calculated stupidly is another. Why the cliffs? Why have higher income folks pay less as a percentage of income than lower income folks? Stupid.

Therefore, it disgusts me to pay IRMAA. But I do.

 

[euro]

Hold on! I thought I read on Medicare.gov ( or maybe it was somewhere less reliable) that if you had an advantage plan that included D you didn’t pay the irmaa premium.
Are you saying that they do charge that? How does that happen if you don’t have separate a plan D premium?
My former employer offers a MA plan but it is not cheap.
Not paying IRMAA for D is part of my analysis on cost effectiveness.

Better re-analyze. To my knowledge, you pay the IRMAA premiums for B and D regardless of whether you have an advantage plan or a supplement.

 

[mf15]

IRMMA going to hurt MFJ, going to highest bracket. Just sold a rental property in NOV.
Between 27.5 years dep recapture,fed cap gains tax,crummy NJ cap gains tax,regular tax, IRMMA.
They are going to take a lot.
Talk about blow that dough.
Oldmike

 

[youbet]

Hold on! I thought I read on Medicare.gov ( or maybe it was somewhere less reliable) that if you had an advantage plan that included D you didn’t pay the irmaa premium.
Are you saying that they do charge that? How does that happen if you don’t have separate a plan D premium?
My former employer offers a MA plan but it is not cheap.
Not paying IRMAA for D is part of my analysis on cost effectiveness.

Medicare Advantage (Part C) participants pay IRMAA the same as if they had Part B and Part D.

 

[steelyman]

Better re-analyze. To my knowledge, you pay the IRMAA premiums for B and D regardless of whether you have an advantage plan or a supplement.

I shouldn’t generalize (if I did). My retiree MA plan, previously with United Healthcare and now (2023) with Aetna, includes Part D and bills for IRMAA B & D. Prescription coverage is through Caremark.

[ADDED] I misstated. CMS (Medicare) bills me monthly for Part B, Part B IRMAA & Part D IRMAA. This is on autopay at my credit union and will change once I start Social Security. It appears the MA plan is not involved.

 

[MichaelB]

Straight from the horse’s mouth. Medicare.gov link here

If you have a higher income, you might pay more for your Medicare drug coverage. If your income is above a certain limit ($91,000 if you file individually or $182,000 if you’re married and file jointly) ($97,000 if you file individually or $194,000 if you’re married and file jointly in 2023), you’ll pay an extra amount in addition to your plan premium (sometimes called “Part D-IRMAA”). You’ll also have to pay this extra amount if you’re in a Medicare Advantage Plan that includes drug coverage. This doesn’t affect everyone, so most people won’t have to pay an extra amount.

 

[dmpi]

Few subjects burn me up more than IRMAA. Sure I can afford an extra thousand or two but why should the folks who put the most into the system be saddled with the highest premiums? Medicare is insurance and insurance premiums should be based on risk. That said, it is what it is and we all have to live with it. I have spent the last decade engineering my income level to try to avoid this. I'm 63 and 2022 was the first year that I have to limit my income. I think I've succeed for 2022, but the coming years will be even harder. In two years my wife will be 63 so our penalty for screwing this up is doubled. The tax code is already complex enough but the fact that they use MAGI vs. AGI adds a lot of complexity for those trying to engineer their income. Bottom line is goverment don't care about us they just want you to pay it.

 

[Irishgirlyc58]

Straight from the horse’s mouth. Medicare.gov link here

Going to update my spreadsheet.
Thanks!

 

[TheWizard]

Few subjects burn me up more than IRMAA. Sure I can afford an extra thousand or two but why should the folks who put the most into the system be saddled with the highest premiums? Medicare is insurance and insurance premiums should be based on risk. That said, it is what it is and we all have to live with it. I have spent the last decade engineering my income level to try to avoid this. I'm 63 and 2022 was the first year that I have to limit my income. I think I've succeed for 2022, but the coming years will be even harder. In two years my wife will be 63 so our penalty for screwing this up is doubled. The tax code is already complex enough but the fact that they use MAGI vs. AGI adds a lot of complexity for those trying to engineer their income. Bottom line is goverment don't care about us they just want you to pay it.

Well, Medicare is income based (means based) so that higher income folks pay more.
If you don't like that, then give away more of your income producing assets.

I'm fine with being higher income and kinda wish my income was twice as much.
Just for kicks, of course...

 

[youbet]

Well, Medicare is income based (means based) so that higher income folks pay more.

Higher income folks pay more in absolute dollars, yes. But they pay less as a percentage of MAGI. See my post #63 about this above.

 

[Sunset]

IRMMA going to hurt MFJ, going to highest bracket. Just sold a rental property in NOV.
Between 27.5 years dep recapture,fed cap gains tax,crummy NJ cap gains tax,regular tax, IRMMA.
They are going to take a lot.
Talk about blow that dough.
Oldmike

Any chance there is a way to appeal this 1 time event of retiring as a landlord ?

I am facing this in the future, making me think I should deduct the IRMMA future costs from the sale as the sale creates the extra costs....

 

[Irishgirlyc58]

I have a question if anyone is still reading this thread.

I retired at the end of 2021. I was then offered a job which I took- but didn’t like so only worked February through April.
I turn 65 this coming September so the IRMAA will be based on my 2021 income. I know I can appeal this but then in 2024 they will use my 2022 income which will be higher due to that short term employment. Can I file an appeal for both years?
If I have to choose just one year I will wait and file for 2024 since 2023 is only 4 months worth.

 

[Sunset]

When do we get notified and how do they notify us that IRMMA is happening to us ?