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Medicare Income Related Increase

Medicare 2019 Part B Premium Increase

I’m impressed!  For the majority of Medicare beneficiaries, the government has kept increases to a minimum for 2019 that is, unless you make more money.  If you’re in that ballgame, you’re going to get a hefty increase (see below).  The STANDARD monthly premium for Medicare Part B enrollees will be $135.50 for 2019, only an increase of $1.50 from $134 in 2018.   Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.  More Medicare announcements:

PART B ANNUAL DEDUCTIBLE INCREASE:

The annual deductible for Medicare Part B beneficiaries is $185 in 2019, an increase of $2 from the annual deductible $183 in 2018.  

PART B ANNUAL INCOME RELATED MONTHLY ADJUSTMENT AMOUNTS (IRMAA) INCREASE:

No one wants to date IRMAA 🙂   Your Part B monthly premium is based on your income (MAGI).  IRMAA affects roughly 5 percent of people with Medicare Part B.  

Beneficiaries who file 
individual tax returns with income:
Beneficiaries who file
joint tax returns with income:
Income-related monthly adjustment amount Total monthly premium amount
Less than or equal to $85,000 Less than or equal to $170,000 $0.00 $135.50
Greater than $85,000 and less than or equal to $107,000 Greater than $170,000 and less than or equal to $214,000 $54.10 $189.60
Greater than $107,000 and less than or equal to $133,500 Greater than $214,000 and less than or equal to $267,000 $135.40 $270.90
Greater than  $133,500 and less than or equal to $160,000 Greater than $267,000 and less than or equal to $320,000 $216.70 $352.20
Greater than $160,000 and less than $500,000 Greater than $320,000 and less than $750,000 $297.90 $433.40
Greater than or equal to $500,000 Greater than or equal to $750,000 $325.00 $460.50

Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:

Beneficiaries who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses: Income-related monthly adjustment amount Total monthly premium amount
Less than or equal to $85,000 $0.00 $135.50
Greater than $85,000 and less than $415,000 $297.90 $433.40
Greater than or equal to $415,000 $325.00 $460.50

PART A PREMIUM:

Most people that have 40 quarters of coverage with Social Security, will not pay a Part A premium.  If you do not qualify (immigrant to the US, worked a job that does not pay into Social Security, did not report your income, etc.), you can buy Part A.  If you are age 65 and over and have FEWER than 40 quarters of coverage and certain persons with disabilities can elect to pay a monthly premium for Medicare Part A of $437/mo in 2019. 

Individuals who had at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $240 in 2019. 

PART A DEDUCTIBLE:

The Medicare Part A inpatient hospital deductible will be $1,364 in 2019.  Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services.  About 99 percent of Medicare beneficiaries do NOT pay a Part A premium since they have at least 40 quarters of Medicare-covered employment.  

Part A Deductible and Coinsurance Amounts for Calendar Years 2018 and 2019
by Type of Cost Sharing

2018 2019
Inpatient hospital deductible $1,340 $1,364
Daily coinsurance for 61st-90th Day 335 341
Daily coinsurance for lifetime reserve days 670 682
Skilled Nursing Facility coinsurance 167.50 170.50
Hoffman Insurance Resources is an independent insurance brokerage agency specializing in Medicare and individual/family health plans.  We are contracted with over 40 companies, Covered CA certified and Medicare certified with 13 carriers.  Physically located in the Los Angeles area, we are also contracted in many states throughout the country.  We pride ourselves on doing what’s right for our clients (whether we make money or not), educating you, being your advocate after the sale and exceeding your expectations. We accept only the insurance company commissions so there are NO extra charges for our assistance and guidance.  From ObamaCare through MediCare…we truly Care!  Check out our reviews on Yelp and Google 🙂
  Debbie@Go2HIR.com               323.455.4961            www.Go2HIR.com           https://www.facebook.com/hoffmaninsuranceresources

 

Avoid having to break the bank to pay for Medicare!

We see this ALL the time!  A client comes to us when they are turning 65 or ready to terminate their employer group plan.  Since we educate our clients, we help them to figure out how much their Medicare premiums will be.  Many times, our clients’ jaws hit the floor when we tell them what they will be paying.  “But but but…I’m retiring and my income will be dramatically lower!”, is usually their response.  Weeeelllll, Social Security and Medicare can care less about that little tidbit of info.  What they look at is – what was your income TWO 2 years ago!  The next response is, “OMG…that’s when our CPA and financial planner advised us to sell our rental property!  And the next year, they suggested we convert our IRA to a Roth IRA!”.   Yikes!!  My guess is, the next conversation with those two professionals won’t go very well :/   
Affectionately known as IRMAA, the Income Related Medical Adjustment Amount will be assessed on your Part B (Doctors/Outpatient) AND your Part D (Drugs) until you can PROVE your Modified Adjusted Gross Income (MAGI) is lower.  Poor IRMAA…NO ONE WANTS TO DATE IRMAA!  There are ways to avoid and eliminate IRMAA but you may have to pay higher costs until you can prove your income is lower.  Many times, that may be till you file your taxes the next year.  Unless you plan, you may be paying significantly higher rates for up to one year 🙁
For most people, here’s how it works:
 
1)  Look at Line 37 of your personal tax return. That’s your AGI.
2)  For your MAGI (good to check with your CPA for you exact MAGI), there are a lot of items to add back in but the two main ones that we see are:
  • Untaxed social security
  • Tax-exempt interest/dividends

3)  Go to:  https://debbiehoffman.com/medicareplans/   Scroll down for the IRMAA charts.  Find your tax filing situation and you’ll easily what your IRMAA can possibly be.

How can you avoid or minimize IRMAA?  During the 1 – 3 years before enrolling into Medicare:

  • THREE (3) years before you go onto Medicare:
    • Sell any property that will incur a capital gains.
    • Be finished converting IRA’s to ROTH IRA’s by this year.
  • TWO (2) years before you go onto Medicare:
    • Contribute as much as possible to your retirement accounts.
    • If your earnings are very high and you contribute the maximum to your retirement accounts, check with your financial planner and CPA about selling some assets at a loss during both years before applying for Medicare.
    • Consider buying rental property.  Normally, you can count on the depreciation and expenses to fix up the property which many times will give you a loss during the first few years.  AND the loss appears on the front page of your 1040 which lowers your MAGI!
    • Consider starting a business.  Many times, you’ll have a loss those first few years with start-up costs and it can offset your earnings.
    • Consider holding off starting your Social Security benefits until your income will be lower.
    • If you have a lot of tax-exempt interest, consider moving those into a financial vehicle that can ‘defer’ the interest (a deferred annuity).

If there is no way to avoid it, when you can PROVE your income will be lower, file a reconsideration form with Social Security.  When the time comes, file your taxes asap and run (don’t walk) to your local Social Security office with your taxes in hand and this form:  https://www.ssa.gov/forms/ssa-44.pdf.  Social Security will then adjust your Part B and Part D premiums to your normal MAGI.

Is your head about ready to explode?  No worries!   Just call us and we easily walk you through what to do.  Better yet, have your CPA and financial planner call us and we’ll all work on together for you 🙂  Remember to reach out to us at AGE 62 or 3 years from when you will be applying for Medicare so we can really work our magic!

 

Hoffman Insurance Resources

323.455.4961

 

By calling the number listed on this page, you will be reaching a licensed insurance agent.  Debbie Hoffman and Melinda Gann are not connected with the Federal Medicare program.