\u201c\u2026I signed up for Medicare 2 months ago, and then applied for Medicare Supplement (medigap) insurance, as well as my Part D prescription drug plan.\u00a0 I don\u2019t understand why I just received an invoice for $1,482.00 from the Department of Health & Human Services\u2026is this a monthly bill?\u00a0 Is this my new supplemental insurance?\u201d<\/p>\n<\/blockquote>\n
The Problem<\/h2>\n
Individuals go to the Social Security Administration (SSA) to sign up for Medicare Part A & B. \u00a0Do you understanding everything you are signing up for? \u00a0 \u201cBest Advice:\u00a0 Talk to your financial advisor and an independent agent when you turn 62.\u201d<\/em><\/p>\n<\/blockquote>\n Whereas Medicare Part A is free for most people, Part B is not. \u00a0Medicare Part B enrollees pay a monthly premium representing about 25% of the Part B estimated program costs. \u00a0For 2022, this so-called, Standard premium is $170.10 per month.\u00a0 The government subsidizes the rest, but\u2026<\/p>\n In truth, many individuals residing in the Santa Clara Valley\u00a0pay more<\/a>, because the Standard Part B premium is adjusted higher for income:\u00a0 this increased amount is called \u201cIRMAA.\u201d<\/a> <\/strong>\u00a0 My<\/p>\n Subscribe to our Newsletter<\/p><\/div>\n observation during the last 12 months: \u00a0there is a real problem with SSA failing to educate applicants. Early education and understanding gives you a fair chance to delay Medicare, where possible, to reduce the IRMAA.\u00a0 No offense intended for the good folks at SSA, but based on the sheer number of phone calls I receive… I think the organization can do better.<\/p>\n Best Advice:<\/em>\u00a0 Talk to an independent agent<\/strong><\/a>\u00a0and your financial advisor when you turn 62. \u00a0If you are working past age 65, initiate contact at least three years before you apply to Medicare or leave your current employer health plan.<\/p>\n IRMAA<\/em> is the Acronym for Income-Related Monthly Adjustment Amount<\/em>; there are two versions associated with Medicare:<\/p>\n The short introduction is, your cost to participate in Medicare Part B and Part D is higher if your income exceeds a certain threshold.\u00a0 For 2022, you trigger the first IRMAA threshold at $91,000 (filing Single). \u00a0For greater detail, schedule a phone call or read Part 2<\/a> of this article.\u00a0 The balance of this page will keep it simple.<\/p>\n Here is a \u201cgood-to-know\u201d aspect of IRMAA: \u00a0the IRMAA calculation is based on IRS information provided to the Social Security Administration (SSA) from two or three years earlier. \u00a0You trigger an IRMAA when your income exceeds certain thresholds.\u00a0 \u201cIncome\u201d is based on your MAGI (line 11 of your 1040 Federal Income tax return), plus adjustments.\u00a0 Fortunately, the IRMAA is not permanent and SSA recalculates your amount each year. \u00a0You may appeal the IRMAA in certain situations.<\/p>\n \u201cThe potential for an IRMAA should factor into the timing of receiving capital gains and your retirement date.\u201d<\/em><\/p>\n The potential for an IRMAA should factor into the timing of taking capital gains. \u00a0Other factors include your retirement date, and ultimately your application for Medicare.\u00a0 You have greater control of these factors the three or four years prior to retirement, so talk to an independent agent early in the process; definitely include your tax and financial advisors in the discussion.<\/p>\nLong before you reach Medicare, talk to your CERTIFIED FINANCIAL PLANNER\u2122, as well as a local, independent agent<\/a>.<\/span><\/p>\n
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The Cost is Greater Than You Think<\/h2>\n
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<\/a>Introduction to IRMAA<\/h2>\n
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Good-To-Know (Before You Reach Medicare)<\/h2>\n
Before You Reach Medicare<\/h2>\n