Page 7 - Cover Letter and Evaluation for Steve Decker

Medicare’s Part B and Part D premiums for higher income individuals

What is IRMAA?

Since 2007, rela vely affluent individuals enrolled in Medicare Part B have been required to
pay higher premiums. And since 2011, they have also had to pay
higher Part D premiums. These extra payments are referred to as

“Income‐Related Monthly Adjustment Amounts,” or IRMAA.
There are six income levels or ers, shown on the next page, used

to determine how much people will pay for their Part B and Part D
premiums in 2020. Tier 1 is the baseline er, and people in this
er pay the standard Part B premium — $144.60 a month in 2020.

According to Social Security, 93% of Medicare beneficiaries pay standard Part B premiums,
with only 7% having to pay the higher IRMAA premiums.
How is IRMAA calculated?

People’s modified adjusted gross incomes (MAGI) determine
whether they will pay the higher premiums. MAGI is calculated by
adding the adjusted gross incomes (AGI) on their tax returns to any

tax‐exempt interest income they received. In most cases, MAGI
and AGI will be the same. There’s a two‐year lag between the year
of the tax return and the year that the premiums are paid. In 2020,
for instance, the Part B and Part D premium amounts are based
2018 tax returns.

Can you appeal the higher amounts?

Yes. Those who are subject to the higher premiums will receive an ini al determina on
le er from Social Security indica ng the amounts of the Part B and Part D premiums they
will pay. The le er also has informa on about how to request a new determina on. O en
people request a new determina on when their incomes have
declined since the tax return year because of a life‐changing

event such as re rement or a reduc on in work hours. Other
reasons include divorce, death of a spouse, and the loss of in‐
come‐producing property.

To request a new determina on because a life‐changing event, complete Form SSA‐44,
which can be found at h ps://www.ssa.gov/forms/ssa‐44‐ext.pdf and which has detailed
instruc ons about how to complete it. For married couples who file joint tax returns, each
spouse must request a new determina on.

The Social Security booklet at h ps://www.ssa.gov/pubs/EN‐05‐10536.pdf has detailed

informa on about how IRMAA works. This booklet is for the year 2019, and so the income
levels shown do not apply to 2020.