High-Income Surcharges for Medicare
The federal government’s means testing can have a substantial impact on the life of any Medicare recipient, since it can affect whether or not that individual qualifies for Medicaid, as well as whether they’ll pay even more each month through a surcharge. Read on to learn more about when surcharges are imposed, and speak with an experienced Florida asset planning attorney about your end of life care.
How are surcharges applied?
The Medicare surcharge is formally known as an Income Related Monthly Adjusted Amount (IRMAA). How it works is that the government uses your tax return from two years ago to calculate your premiums. If your modified adjusted gross income as an individual was over $85,000, or your income as a married couple was over $170,000, then you will be subjected to a surcharge. There are four tiers of surcharges, with the highest income earners being forced to pay $428.60 for Part B, and an additional $76.20 more than their existing Part D premium. The surcharge calculations are conducted each year, so if you experienced a spike in income one year (say, by selling your house) and were subjected to the surcharges, they may not apply the following year.
Is there a way to avoid paying the surcharges?
If you can prove that your income has fallen from what it was when you filed your tax return two years ago, then you may be able to obtain a waiver from paying the surcharge. In order to obtain a waiver, you will have to request a new determination from the Social Security Administration. This will involve proving what happened that lowered your income, and proof regarding what your income is now.
One reason that the government will grant a surcharge waiver is when you have experienced what’s considered a “life-changing event.” These might include the passing of your spouse or your retirement from your job. The Social Security Administration publishes a full list of what events qualify in the publication titled “Medicare Premiums: Rules for Higher-Income Beneficiaries,” which you can find here.
Careful asset planning is critical when you’re entering your senior years and are on a fixed income. Asset protection is a complex task with high stakes involved, and it requires the attention of an experienced and knowledgeable estate planning professional. Speak to a knowledgeable asset protection lawyer today about your questions on long-term care expenses.
For assistance with questions related to estate planning, long-term care, and asset protection, contact the West Palm Beach elder law attorneys at Shalloway & Shalloway for a consultation at 561-686-6200.