Avoid Overpaying For Medicare In 2021 and Beyond #31
Do you know about the benefits that are available to you through Medicare when you retire? If you find yourself completely clueless when it comes to Medicare - you aren’t alone! Some many men and women are preparing for retirement and have no idea how to factor in their use of Medicare. I don’t want to see savvy people like you stuck without the right information or the right tools to succeed. On this episode, you’ll hear as I walk through some key tips that you can use to avoid overpaying for Medicare in 2021. Make sure to have pen and paper ready, you don’t want to miss a minute of this informative episode!
You will want to hear this episode if you are interested in...
What Medicare premiums will cost you in retirement [1:20]
How to lower your Medicare premium by lowering your reported income [5:00]
When and why you can appeal your Medicare increase [9:00]
Closing thoughts [14:00]
What is Medicare and how does it work?
For those who are still unsure what we are talking about - Medicare is a national health insurance program in the United States, created in 1966 under the Social Security Administration (SSA) and now administered by the Centers for Medicare and Medicaid Services (CMS).
Medicare primarily provides health insurance for Americans aged 65 and older, but also for some younger people with disability status as determined by the SSA.
The program helps with the cost of health care, but it does not cover all medical expenses or the cost of most long-term care. You have choices for how you get Medicare coverage. If you choose to have Original Medicare (Part A and Part B) coverage, you can buy a Medicare Supplement Insurance (Medigap) policy from a private insurance company.
Make sure you aren’t paying too much!
I don’t know about you but it drives me crazy when I find out that I paid too much for something when I didn’t have to. I hate that feeling so much that I’ve worked hard to avoid it at all costs and I want you to avoid that feeling too! One of the best ways to make sure you aren’t paying too much for Medicare is by keeping an eye on your Medicare part B premiums.
With Medicare Part B, you pay a premium each month. Most people will pay the standard premium amount. If your modified adjusted gross income is above a certain amount, you may pay an Income Related Monthly Adjustment Amount (IRMAA). Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago. This is the most recent tax return information provided to Social Security by the IRS.
The standard Part B premium amount in 2021 is $148.50. Most people pay the standard Part B premium amount. If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you'll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.
You can avoid paying IRMAA by working with tax professionals to keep your adjusted gross income below the threshold set that year. You can also file an appeal due to a life-changing event. A major event can significantly decrease a person’s income and that can affect the premium he or she will pay for Medicare Part B, medical insurance.
Social Security recognizes the following life-changing events:
marriage
divorce or annulment
death of a spouse
work stoppage
work reduction
loss of income-producing property (beyond the beneficiary’s control), and
loss or reduction of pension income (plan failure or termination, or scheduled cessation)
employer settlement payment (as a result of an employer or former employer’s closure, bankruptcy, or reorganization)