How To Appeal a Medicare Part B Premium Penalty For High Income

If you are a Medicare beneficiary that had a high income within the last couple of years, you may be penalized with a higher premium by Medicare. This penalty can affect your Part B premium and your prescription drug (Part D) premium. There is a process to appeal a Part B premium penalty.

The technical name for this penalty is the Income-Related Monthly Adjustment Amount, or IRMAA. A Request for Reconsideration is a petition that you can file with Social Security if you feel your premium amount is unwarranted or based on inaccurate information (more on that below).

Once you retire, your income is likely to drop. Yet, the IRMAA can cause you to pay may more even though at retirement your income is lower. The Request for Reconsideration could help lower your premium.

How Your Part B and Part D Premium is Calculated

Your Modified Adjusted Gross Income (MAGI) is calculated by adding your adjusted gross income plus any tax-exempt income. This could include items such as dividends, interest, capital gains, wages, rental income, or non-taxable Social Security benefits.

In order to determine this amount, Social Security will use the information from your most recent federal tax return. So the amount that they are basing your premium on could be your MAGI from 18-24 months ago.

If Social Security determines that you are in a bracket that will trigger a Part B premium penalty, you will receive a letter from them informing you of what your premium will be. They will also include an explanation of your Medicare Part B premium penalty. If you disagree with their assessment, you can then file a Request for Reconsideration.

Situations That May Qualify You For a Lower Part B Premium

You can call the SSA to request the reconsideration. The number is 1-800-772-1213. Here are the situations that may cause a Part B premium penalty to be reversed:

Tax return inaccurate or out of date: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

A life-changing event that affects the beneficiary’s modified adjusted gross income:

  • 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

The most common of these is work reduction or work stoppage. If you were making $100,000 when you retired two years ago and your retirement income is now $40,000, you have a pretty good case for having your premium reduced.

How To Appeal a Part B premium penalty

When following the steps below, be sure to keep a record of all your correspondence. This is your Medicare Part B premium penalty you are trying to lower, so it puts money back in your pocket if you are successful. So, make sure you keep a copy of everything. The IRMAA also can affect your Part D premiums. If you are entitled to having your premium adjusted it is in your best interest to do so.

    1. Complete a request to SSA for reconsideration. Contact SSA to learn how to file this request.
    2. Your premium amounts will be corrected if your reconsideration is successful. If your reconsideration is denied, you can appeal to the Administrative Law Judge (ALJ) within 60 days of the date on the reconsideration denial. Follow the directions on the denial to file an appeal with the ALJ. If you decide to appeal to the ALJ, you may want to contact a legal services organization or lawyer to help you with this or any further levels of appeal—but this is not required.
      1. You must submit any new evidence within 10 days of filing your appeal to the ALJ. Contact the ALJ to learn how to submit this. You can ask the ALJ for an extension if you are unable to submit new evidence within 10 days.
    3. If your ALJ appeal is successful, your premium amount will be corrected. If your appeal is denied, you can choose to appeal to the Medicare Appeals Council (MAC) within 60 days of the date on the ALJ denial.
    4. The Part B premium amount will be corrected if the MAC appeal is successful. If the MAC denies your appeal, you can choose to appeal to the federal judicial district has at least one courthouse, and most districts have more than one. Each state has at least one judicial district.
    5. The level in the Medicare process of appeals that comes after the Medicare Appeals Council (MAC) level. This is the final level of the Medicare appeals process.

“>Federal District Court within 60 days of the date on the MAC denial.

Saving On Your Medicare Supplement Plan

The most popular plan that we sell is the Plan G. It is identical to the more popular Plan F except that with the Plan G you pay the annual Part B deductible which is $183 in 2017. Yet, in many cases, we find that the difference in premiums between Plan F and Plan G can be anywhere from $350 to $700 per year.

Medicare will be paid the Part B deductible regardless of your choice of plan. With a Plan G, you can pay it directly to your Part B provider once per year. Under a Plan F, you are basically paying the deductible plus a convenience fee (in the form of a higher premium) for the insurance company to pay it for you. Most of our clients prefer to pay it themselves and pocket the premium difference. We have a short video that explains the difference between Plan F and Plan G and gives premium examples of how much you can save by choosing the Plan G over the Plan F.

If you want to see how much you can save by choosing the Plan G over the Plan F, call one of our licensed insurance agents at 1-888-228-6119, or use the form to the right to tell us how we can help.

2 thoughts on “How To Appeal a Medicare Part B Premium Penalty For High Income”

  1. My wife and I were living abroad when I turned 65. Social Security advised me of the start of my SS benefits, and that I would be automatically enrolled in Medicare at the same time. But I was not made aware that I need to sign up for Medicare Part B, that there was a charge for Part B, and that there would be penalties for not signing up at age 65. When we returned to the United States when I was age 69, I became aware of Part B and went in to the Social Security office to sign up. I was then advised that in addition to a monthly premium for Part B, I would also be assessed a penalty for the rest of my life for not signing up when I turned 65. I applied for Part B in January 2019 when open enrollment began, and I was told that my Part B would begin on July 1 2019, and that my premiums and penalties would begin at the same time. Because we are of very limited income, and because I was not aware of this when I turned 65, it is going to be a real hardship to pay this penalty for the rest of my life. If I had known this when I turned 65, I would have signed up immediately for Part B. I just signed up for an advantage plan with drug coverage, so hopefully I have escaped any penalties for not signing up for Part D. Is it possible to make an appeal against the penalties? I have no problem with paying the premiums, even though it is very expensive for me because my income is very low – I have no other pension. But I find the penalties a real hardship, and it feels unfair because I was not advised about the penalties until I returned to the U.S.

    1. If you live abroad after you turn 65, and you are not working, the penalty clock begins at the end of your Initial Enrollment Period (IEP). The IEP ends after the seventh month after you are first eligible for Part B. To avoid a late penalty, you must enroll and pay Part B premiums, even though you cannot use any Medicare services while overseas. You won’t get a Special Enrollment Period to sign up for Part B when you return to live in the United States.

      If you are working outside the United States after turning 65, you are allowed a special enrollment period to sign up for Part B on your return if you have had American-style group health insurance from an employer; or were covered by the national public health system of the country where you live; or had coverage from an approved American volunteer program. These rules also apply to your covered spouse.

      You could check with your State Health Insurance Assistance Program (SHIP) to see if they can help. But it is very likely you will have that penalty on Part B premiums from now on. Their website is https://www.shiptacenter.org/ and you can click on Find Local Medicare Help. I wish I had better news for you.

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