Millions of Medicare beneficiaries with Original Medicare or other Medicare health plans understand the costs associated with their Medicare Part B coverage. The premium for Medicare Part B is usually deducted from the beneficiary’s social security payment, or can be billed separately or paid by a third party. Medicare Part B coverage is provided to help with costs of physician visits, lab work, X-rays, etc. The Medicare Part B premium is released annually and can be increased, decreased or remain at the same level from a previous year. In 2015 the Medicare Part B premium remained at the same level as 2014. It is $104.90 per month for most beneficiaries, however it can be higher based on income levels.
Recently, a reader contacted us for an explanation of a Social Security letter he received shortly after he joined a Medicare Advantage plan. His monthly premiums seemed high. He believed that he would pay a Part B premium of $104.90 and a $0 premium for his Medicare Advantage Prescription Drug plan. However, a letter from Social Security alerted him that he would be subject to an Income Related Medicare Adjustment (IRMA) of $42.00 additional monthly cost for his Medicare Part B premium and another $12.30 adjustment to his Medicare Part D premium. Here is what we learned:
- Most people don’t qualify to pay higher premiums, and never receive an IRMA notice.
- IRMA is calculated by Medicare based on your modified adjusted gross income, as reported on your IRS tax return from two years ago.
- If your adjusted gross income is above a certain amount your Medicare Part B and Part D premiums may be higher.
- IRMA affects less than 5 percent of people with Medicare, so most people don’t pay a higher premium.
Part B Monthly Premium
Part B premiums are paid monthly. If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you may pay more.
If your yearly income in 2013 was filed as (in thousands=k):
| Individual | Joint | Married/Separate | 2015 Payment |
|---|---|---|---|
| $85k or less | $170k or less | $85k or less | $104.90 |
| $85k-$107k | $170k-$214k | N/A | $146.90 |
| $107k-$160k | $214k-$320k | N/A | $209.80 |
| $160k-$214k | $320k-$428k | $85k-$129k | $272.70 |
| above $214k | above $428k | above $129k | $335.70 |
Part D Monthly Premium
The chart below shows your estimated prescription drug plan monthly adjustment based on your income. The adjustment is charged addition to your plan premium.
If your yearly income in 2013 was filed as (in thousands=k):
| Individual | Joint | Married/Separate | 2015 Payment |
|---|---|---|---|
| $85k or less | $170k or less | $85k or less | $104.90 + plan prem. |
| $85k-$107k | $170k-$214k | N/A | $146.90 + plan prem. |
| $107k-$160k | $214k-$320k | N/A | $209.80 + plan prem. |
| $160k-$214k | $320k-$428k | $85k-$129k | $272.70 + plan prem. |
| above $214k | above $428k | above $129k | $335.70 + plan prem. |
We discovered the Medicare beneficiary who contacted us was subject to IRMA for only one year when his income was high. In later years his cost came down $500; he got to know IRMA.
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