Federal retirees over age 65 are encouraged to enroll in Medicare Part A and Medicare Part B.
Medicare Part A covers inpatient hospital expenses, skilled nursing facility inpatient expenses, and some home health care services. About 99 percent of Medicare beneficiaries do not pay a Part A premium because they have at least 40 quarters of Medicare hospital insurance-covered employment. This means these individuals have been paying the Medicare Part A payroll tax (hospital insurance tax) for at least 10 years.
Medicare Part B covers physician services, outpatient hospital services, durable medical equipment and certain other medical and home health care services not covered by Medicare Part A. By being enrolled in a Federal Employees Health Benefits (FEHB) program health insurance plan and in Medicare Parts A and B, a federal annuitant will minimize, if not eliminate, any out-of-pocket hospital and medical expenses including deductibles, co-payments and co-insurance. However, unlike Medicare Part A, there is a premium cost for Medicare Part B. The premium cost depends on an enrollee’s annual income – the higher one’s adjusted gross income, the higher the Medicare Part B monthly premium.
Each year, the Medicare Part B monthly premiums are adjusted. For 2020, the Medicare Part B monthly premiums are shown in the following table:
Note the following:
(1) the standard monthly premium for Medicare Part B enrollees will be $144.60 for 2020, an increase of $9.10 from $135.50 in 2019; and
(2) Medicare Part B enrollees whose modified adjusted income above a certain level must pay an income-related monthly adjustment amount (IRMAA) in addition to the standard monthly premium ($144.60 during 2020). For example, during 2020 those Medicare Part B enrollees who are in the second income “tier” will pay an additional $57.80 per month for a total monthly premium of $202.40.
The Social Security Administration (SSA) determines whether a Medicare Part B enrollee will pay an IRMAA for the current year (in this case, the year 2020). This determination is based on the Medicare Part B enrollee’s income on the enrollee’s federal income tax return filed two years prior (for the year 2020, the SSA looks at an enrollee’s federal income tax return filed for the year 2018). In particular, the SSA is looking at the enrollee’s modified adjusted gross income (MAGI). MAGI is the enrollee’s adjusted gross income (AGI) any tax-exempt interest income. For 2020, in late November or early December 2019 Medicare Part B enrollees received notification about their 2020 Medicare Part B monthly premiums, as well as whether they will have to pay an IRMAA.
How an IRMAA Decision Can Be Appealed
If the SSA determines that a Medicare Part B enrollee should pay an IRMAA, then the SSA will mail the enrollee a notice called an initial determination. The Medicare Part B enrollee can request that the SSA revisit its decision regarding the enrollee’s IRMAA. In particular, a reason to revisit the SSA decision for issuing an IRMAA notice would be if the Medicare Part B enrollee experienced a “life-changing” event that caused an income decrease, or if the enrollee thinks that the information the SSA used to determine the IRMAA was incorrect or outdated. The following is a list of situations that the SSA considers to be “life-changing” events:
- the death of a spouse
- divorce or annulment
- the Medicare Part B enrollee or spouse stops working or reduces the number of hours working
- Involuntary loss of income-producing property due to a natural disaster, disease, fraud, or other circumstances
- loss of pension
- receipt of settlement payment from a current or former employee due to the employer’s closure or bankruptcy.
To request a new initial determination, a Medicare Part B enrollee should submit a Medicare IRMAA Life-Changing Event form or schedule an appointment with the SSA by calling 1-800-772-1213. The Medicare Part B enrollee needs to provide documentation of either the correct income or the life-changing event that caused the Medicare Part B enrollee’s income to decrease.
Further Appealing the IRMAA Decision
If a Medicare Part B enrollee does not qualify to request a new initial determination but still disagrees with the SSA’s IRMAA decision, then the Medicare Part B enrollee has the right to appeal. Appealing an IRMAA decision is also referred to as requesting a “reconsideration”. There are four potential phases of this process:
- Complete a request to Social Security for “reconsideration”. Contact the SSA at 800-772-1213 to learn how to file this request.
- If the reconsideration is successful, then the Medicare Part B enrollee’s Part B premium amount will be corrected. If the reconsideration is denied, then the enrollee can appeal to the Office of Medicare Hearings and Appeals (OMHA) within 60 days of the date on the “reconsideration” denial.
- If the OMHA level appeal is successful, then the Medicare Part B enrollee’s premium amount will be corrected. If the appeal is denied, then the Medicare Part B enrollee can appeal to the Council within 60 days of the date of the date on the OMHA level denial. Note that a Medicare Part B enrollee must submit any new evidence within 10 days of filing an OMHA level appeal.
- If the Council appeal is successful, then the Medicare Part B enrollee’s Part B premium amount will be corrected. If the Council denies the enrollee’s appeal, then the Medicare Part B enrollee can choose to appeal to the Federal District Court within 60 days of the date on the Council denial.