Hello Tony: I will be 65 in October, I am self-employed and my income exceeds $250,000. Recently, I received a letter from the Social Security Administration (SSA) advising me that my monthly Medicare Part B premium of $170.10 would be doubled to $340.20 per month due to reported earnings in 2020. This wasn’t a surprise, but Social Security also said the monthly adjustment for prescription drug coverage would be an additional $51.70. What is all this?
I am in excellent health and do not take any prescriptions. What if I don’t apply for Medicare prescription drug coverage? Do I still have to pay the “extra” $51.70?
What happens if a person takes the Medicare Advantage route instead of Original Medicare and a Medicare Supplement? Do they avoid the extra $340.20 per month for Part B and the $51.70 per month extra premium for a Medicare Part D prescription drug plan?
—Mike from Oklahoma City
Mike: Sorry, Mike, but you can’t avoid additional IRMAA (monthly income-related adjusted amount) premiums if your income exceeds a certain limit, regardless of whether you’re enrolled in original health insurance and supplemental Medicare or a Medicare Advantage plan with prescription drug. It will happen anyway!
Social Security bases your income on you and your spouse (if married), whether or not your spouse is of Medicare age. The MAGI (modified adjusted gross income) amount that is reported on your annual income taxes is what triggers the increase in IRMAA.
Ultimately, if your income exceeds these amounts and you have your Medicare prescription drug plan from a Medicare Advantage prescription drug plan (Part C) or a standalone drug plan on a Medicare (Part D) prescription, you’ll pay the additional IRMAA premium whether you deduct your premiums from your Social Security check or pay Social Security directly (because you haven’t started receiving your Social Security check social).
If you are not enrolled in a Medicare Part D prescription drug plan, whether standalone or with a Medicare Advantage plan, you will not receive the additional Part D IRMAA premium (monthly amount adjusted for revenue). It’s not a wise decision, however, not to enroll in a Medicare Part D plan just because you’re not taking prescriptions when you enroll in Medicare.
Remember, if you are not enrolled in a Medicare Part D prescription drug plan at the right time, not only will you not have prescription drug coverage, but you will also receive an enrollment penalty. late for Part D if you enroll later.
That’s why at Toni Says’ office, we advise everyone to enroll in a Part D prescription drug plan, whether you take no prescriptions or take a lot. No one wants additional punishment.
Enrolling in a Medicare Advantage plan instead of Original Medicare with a Medicare/Medigap Supplement and a Medicare Part D plan does not prevent Medicare or Social Security from charging the additional IRMAA premium for Medicare Parts B and D. The IRMAA Rule Medicare regarding Medicare Supplemental IRMAA Part D premiums went into effect January 1, 2011.
Because the annual Medicare and You Handbook is usually mailed out by October 1, Medicare costs and premiums for that specific year are not included. You should look for annual Medicare costs and premiums that will be released around November 10.
Toni King is an author and columnist on Medicare and Medicare issues. She has spent over 27 years as a sales leader in the fields. For answers to questions about Medicare, email: firstname.lastname@example.org or call 832-519-8664.
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