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Medicare and Health Care


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Medicare is health insurance for people age 65 or older, under age 65 with certain disabilities, and any age person with End-Stage Renal Disease (ESRD). There are many different parts to Medicare; with all of these options, it can be confusing.

This forum will allow members to share their experience with medicare and seek advice* on certain medicare-related situations.

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wyre  
#1 Posted : Wednesday, April 15, 2020 3:15:51 PM(UTC)
wyre

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Can anyone confirm whether or not Medicare includes the non taxable portion of our Federal annuity ( the return of $ we paid into the retirement system) when calculating additional Part B premium costs. On my tax software, that money seems to be included in AGI , but not in ‘taxable income”. Basically, they’re returning our own money to us — so it really shouldn’t be considered “income” — but I know life isn’t always fair. I’m in CSRS ( but I think the question applies to both systems) . Thanks
GoHuskers  
#2 Posted : Wednesday, April 15, 2020 7:28:22 PM(UTC)

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It is based on what they call Modified Adjusted Gross Income. SSA's procedure on how this is calculated can be found in their procedural manual located at https://secure.ssa.gov/a.../poms.nsf/lnx/0601101010 .


A. Policy for MAGI

1. Modified Adjusted Gross Income (MAGI) is the sum of:
• the beneficiary’s adjusted gross income (AGI) (found on line 7 of the Internal Revenue Service (IRS) tax filing form 1040), plus
• tax-exempt interest income (line 2a of IRS Form 1040).

2. The MAGI used to determine if the income-related monthly adjustment amount (IRMAA) applies is the most recent tax information that IRS is able to
provide. Generally, the information is from two years prior to the year for which the premium is being determined, but not more than three years prior.
For example, 2011 premiums are generally based on 2009 tax return information. See HI 01101.020 for more detail about how MAGI is used.

3. Beneficiaries with Medicare Part B, prescription drug coverage, or both, with MAGI above the applicable threshold pay more toward their coverage
premiums because of IRMAA. See the policy for MAGI thresholds in HI 01101.010B.

4. Beneficiaries with MAGI above the threshold are subject to a sliding scale increase in their premiums. See HI 01101.020, IRMAA Sliding Scale Tables.

JeffinVA  
#3 Posted : Tuesday, June 16, 2020 1:33:21 PM(UTC)
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You can also request a reduction in your IRMAA. I did this once after I retired and will do it again after my wife retires at the end of the year. Note...they aren't very speedy about it.

If your income has gone down due to any of the following situations, and the change makes a difference in the income level we consider, contact us to explain that you have new information and may need a new decision about your income-related monthly adjustment amount (IRMAA):

• You married, divorced, or became widowed;
• You or your spouse stopped working or reduced your
work hours;
• You or your spouse lost income-producing property
because of a disaster or other event beyond your control;
• You or your spouse experienced a scheduled
cessation, termination, or reorganization of an
employer’s pension plan; or
• You or your spouse received a settlement from
an employer or former employer because of the
employer’s closure, bankruptcy, or reorganization.

If any of the above applies to you, we need to see documentation verifying the event and the reduction in your income. The documentation you provide should relate to the event and may include a death certificate, a letter from your employer about your retirement, or something similar. If you filed a federal income tax return for the year in question, you need to show us your signed copy of the return. Use Form SSA-44 Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event to report a major life-changing event. If your income has gone down, you may also use Form SSA-44 to request a reduction in your income-related monthly adjustment amount. You can find Form SSA-44 online at www.socialsecurity.gov/forms/ssa-44.pdf.

Edited by user Tuesday, June 16, 2020 1:33:53 PM(UTC)  | Reason: Not specified

thanks 1 user thanked JeffinVA for this useful post.
wyre on 6/16/2020(UTC)
wyre  
#4 Posted : Tuesday, June 16, 2020 4:52:38 PM(UTC)
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Is this something you should file as soon as there is a change ( eg retirement +/or WEP Social Security penalty). Since I retired mid year 2019 and had a lot of accrued annual leave, my year end total income wasn’t that far off from 2018, but this year the income reductions really will have an impact. Should we request a re-evaluation immediately or wait until a tax return for the effected year (2020) is filed? I have no way of knowing how drastically cap gains will hit us, despite market losses, so it’s impossible to accurately estimate total income , but there’s probably a $25-30k differential in my direct income, so that might be enough to trigger an adjustment in Medicare IRMAA.

When they finally approved you, were the overpayments adjusted retroactively?

Thanks for the info!
MATMAN14  
#5 Posted : Saturday, June 20, 2020 1:13:09 PM(UTC)

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Im also curious about this. I took a TSP withdrawal in 2019 that pushed my AGI over the edge. I will go onto Medicare in 2021. My withdrawal was a one time thing, yet they will charge me for that With the higher monthly amount for Part B? Have looked up the reasons for reduction and since my situation is not one of them, am curious how to resolve this.
wyre  
#6 Posted : Saturday, June 20, 2020 1:39:24 PM(UTC)
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I started taking Medicare this year and I received the premium increase notice based on my 2018 income tax return. So if you “made” more in 2019 it probably will similarly affect your 2021 premiums. I just don’t know how quickly they will adjust for subsequent reductions. The one time increase should in theory only affect you for one year, but I don’t know if we need to keep requesting premium revisions as income reduces or if they simply review annually. Another issue that will factor in eventually is required minimum distributions ( once we reach age 72). That may raise income considerably ( and in perpetuity), so it will be less of a roller coaster ride — unless you decide to make another large withdrawal and take a large tax hit one year in order to reduce subsequent Medicare payments.

Wish I had known about this sooner — the Medicare $ bite is a lot bigger than I’d been led to believe

Edited by user Saturday, June 20, 2020 1:46:25 PM(UTC)  | Reason: Not specified

MATMAN14  
#7 Posted : Monday, June 22, 2020 5:27:33 AM(UTC)

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Wyre, Thanks...guess i will have to put in for reduction. Have called Medicare about this since my situation is not one that they outline in the reduction paperwork, they had no real answers.
The HalfBreed  
#8 Posted : Wednesday, June 24, 2020 8:53:10 PM(UTC)

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The posters above told you right about the MAGI.

I had to escalate my medicare pt B payments to the 2nd level because almost everyone that answered the phone didn't know about CSRS ONLY (No Social Security for me), and they wanted to send me a quarterly payment bill, or I could pay it online thru my bank, or they can take it directly out of my bank account. I talked to the 1st level who asked what my "ID" was, and I assumed they wanted to know my CSA number, which was correct. I gave it to them, and that got the ball rolling. They now take it from my CSRS Pension. (it took about 2 months)

Some of the older folks I know ONLY get CSRS payments and nothing else and I wanted them to take it from my OPM CSRS pension payments only.
They'll check your IRS return and base it on your MAGI from about 2 years ago, and automatically adjust it accordingly.
My Medicare and pt B payments just became effective in April this year. There's a 2 year lag in checking the income, so, if something happens this year, contact CMS (1.800.Medicare)

My income (I'm single) pushed me into the next higher limit of payments, so my pt.B costs $202.40 / month, but I'm not complaining.

Read the IRMAA and Medicare pt B rule$ here :

https://www.medicare.gov...icare-costs/part-b-costs

Good Luck.
RETIRED CSRS 12/19/2012 @ age 57 w/39 years.
Good Bye Tension...Hello Pension !
MATMAN14  
#9 Posted : Thursday, June 25, 2020 4:18:53 AM(UTC)

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Thanks HalfBreed! Good to know they check income each year.
The HalfBreed  
#10 Posted : Thursday, June 25, 2020 9:36:14 AM(UTC)

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Originally Posted by: MATMAN14 Go to Quoted Post
Thanks HalfBreed! Good to know they check income each year.


They CERTAINLY Check. You know why ?

Coz at first, they sent me a bill for $144.60 (pay 3 months at a time)
Then, 2 weeks later, they sent me an update saying that, according to IRS data, (my AGI or MAGI, depending)
I exceed the income levels for that payment, and am now having to pay $202.40, so yea, they certainly know.
But, I already knew I would exceed it, so....I was hoping to get by for a year or so....

LOL !

Oh well, IMO, I'd rather have it and not need it, than need it and not have it. I'm covered.

Edited by user Thursday, June 25, 2020 9:37:24 AM(UTC)  | Reason: Not specified

RETIRED CSRS 12/19/2012 @ age 57 w/39 years.
Good Bye Tension...Hello Pension !
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