What is Medicare Part D IRMMA?
Medicare Part D is insurance covering prescription drugs. It is usually related to but separate from a Medicare supplement plan, and it may be included in or related to a Medicare Advantage plan. Beginning this year, those on Medicare with incomes higher than $85,000 for a single person, or $170,000 for a couple, are required to pay, in addition to the Part D insurance company’s regular plan premium, an Income Related Monthly Adjustment Amount (IRMAA). Medicare Part D IRMAA. This extra amount is deducted directly from Social Security, Railroad Retirement, and Office of Personnel Management (federal employees retirement) checks. If the extra amount is more than the amount of the individual’s monthly check, it will be billed monthly, and must be paid to Medicare, (or the RRB) not the insurance company.
How Much is the Medicare IRMMA?
Part D premiums are subsidized by the federal government so that most people pay a monthly premium of a little more than $30. The Part D IRMAA is part of recently enacted changes to the Social Security system designed to have retirees with higher incomes contribute more to the cost of their medical care and insurance coverage. Those who are required to pay the additional amount should have received letters from Social Security in January setting out the amount that will be withheld from their checks. The amount is based upon the income reported on federal income tax returns filed in 2011, because those are the most recent returns which the IRS has released to Social Security. The IRMAA amounts are as follows.
If Yearly Income in 2011 was
- $85,000 or less $170,000 or less Plan Premium
- above $85,000 up to $107,000 above $170,000 up to $214,000 $11.60 + Plan Premium
- above $107,000 up to $160,000 above $214,000 up to $320,000 $29.90 + Plan Premium
- above $160,000 up to $214,000 above $320,000 up to $428,000 $48.30 + Plan Premium
- Above $214,000
Married, filing separately
- above $85,000 up to $129,000
- above $129,000 above $428,000 $66.60 + Plan Premium
- $48.30 + Plan Premium
- $66.60 + Plan Premium
Because the amount withheld or billed is based upon income earned two years earlier, Social Security should be contacted if some event has occurred which has substantially changed income. Such events include marriage or divorce, death of a spouse, change in employment status, loss of income from income producing property due to an event beyond the individual’s control, reorganization or termination of a pension plan , or receipt of a settlement from an employer or former employer because of the employer’s closure, bankruptcy or reorganization. Social Security can be contacted at 1-800-772-1213, at a local Social Security office, or through the web site at www.socialsecurity.gov.
It is estimated that the Part D IRMAA will affect fewer than 5% of all the people who are on Medicare. Most people will continue to pay only the regular Part D premium, and will not need to be concerned about the additional amount. For those who are affected, the amounts may be significant.
Do you have questions about your Medicare Part D Prescription Drug Plan? Worried this may affect you? Please call 1-866-466-9118 to speak with a Benefit Advisors on ways to lower your overall Medicare costs!