As a medicare beneficiary, most individuals pay a base amount for their Medicare Part B premium, however, if you are one that SSA has identified as having a higher income, especially prior to retirement, you have the right to appeal if you believe that an Income Related Monthly Adjustment Amount (IRMAA) is incorrect for one of the qualifying reasons. (You can find out what your estimated Part B Premium is on this nifty schedule.)

First, you must request a reconsideration of the initial determination from the Social Security Administration. A request for reconsideration can be done orally by calling the SSA 1-800 number (800.772.1213) as well as by writing to SSA using the form SSA-44.

Below are the situations which may qualify a beneficiary for a new Part B determination:

Situation Description
Tax return inaccurate or out of date
  • A beneficiary filed an amended tax return for the year SSA is using to make an IRMAA decision
  • There was an error in the IRS data
  • The IRS provided SSA with older data and the beneficiary wants to use newer information
  • You had a major life-changing event that significantly reduced your income
Life-changing event that affects the beneficiary’s modified adjusted gross income There are 7 qualifying life-changing events:

  • Death of spouse
  • Marriage
  • Divorce or annulment
  • Work reduction
  • Work stoppage
  • Loss of income from income producing property
  • Loss or reduction of certain kinds of pension income

Events that result in the loss of dividend income or affect a beneficiary’s expenses, but do not affect the beneficiary’s modified adjusted gross income are not considered qualifying life-changing events.

Components of Your Part B Premium

Beneath the following equation is specific information on each component of your premium.

Equation to Determine Your Part B Premium

Medicare Part B Standard Monthly Premium* + Your Income-Based Adjustment** = Your Total Monthly Part B Premium

*Set by the Centers for Medicaid and Medicare Services (CMS).
**Income Related Monthly Adjustment Amount (IRMAA)

Part B Premium Component Description Annual Part B Rate
Set by the Centers for Medicaid and Medicare Services (CMS) The Part B insurance premium is set annually by the CMS. Effective January 1, 2007, Part B beneficiaries with incomes above a certain threshold amount (about 4% to 5% of all Part B beneficiaries) are subject to an adjustment of the amount of the premium that they must pay for Part B insurance.
Your Income-Based Adjustment The Social Security Administration determines your Income Related Monthly Adjustment Amount (IRMAA).

The IRMAA is based on information from the individual’s income tax return obtained from the Internal Revenue Service (IRS) and calculated according to a mathematical formula established by law. The IRMAA is then added to the standard premium amount to calculate the beneficiary’s total monthly Part B insurance premium.

If you found this article helpful, or would like to read more articles about how Social Security interacts with Medicare, leave a comment below.

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