By Nick Depke
Most people are ready for Medicare to be confusing. What surprises them is when their income from 2 years ago shows up in the conversation.
There is a Medicare rule called IRMAA. Plain English: if your income is above certain levels, you may pay an extra amount for Medicare Part B and Part D. It is not a separate plan. It is not something you shop around. It is an income-based adjustment.
Here is the part that catches people off guard: Medicare usually looks at a past tax return. So someone who just retired may think, “My income is lower now,” but Medicare may still be looking at a year when they were working, selling a business, taking bonuses, or realizing investment income.
A few things worth knowing:
IRMAA can affect both Part B and prescription drug coverage.
It is based on income, not how healthy you are.
A retirement or major income drop may give you a reason to request a review.
It is not always permanent, because income can change year to year.
It is easier to understand before the bill shows up.
This is one of those Medicare details that does not get talked about enough because it sounds boring until it hits someone’s wallet. If you are approaching 65, retiring soon, or helping a parent who had higher income recently, put this on the list of things to understand early.
Nick Depke – HealthMarkets – 402-680-6171 – ndepke@healthmarkets.com
