A sudden increase in your father’s Medicare Part B premium from $174.70 to $698.80 is concerning, especially given that his income has remained the same. Several factors could explain such a drastic jump in the premium, even without an increase in income.
Medicare Part B premiums
For 2024, the standard Medicare Part B premium is set at $174.70 for individuals earning below a certain income threshold. However, for higher-income beneficiaries, the premium can increase due to what is known as the Income-Related Monthly Adjustment Amount (IRMAA). The IRMAA is an extra charge applied to Medicare Part B and Part D premiums, depending on the income reported on your tax return from two years prior (in this case, 2022).
For example, individuals earning more than $103,000 annually (or couples earning more than $206,000) will see higher premiums. These premiums rise in tiers, with the highest earners paying up to $698.80 for Medicare Part B.
Why the premium jumped: possible causes
Several potential factors could explain the increase in your father’s Medicare premium:
- IRMAA adjustment: If your father’s income in 2022 was reported to be above the $103,000 threshold (even slightly), it could have triggered the IRMAA. The income used for calculating Medicare premiums comes from IRS data that is two years old. So, although his current income has not changed, the premium is based on past earnings.
- Social Security and tax return errors: Sometimes, Social Security may incorrectly classify beneficiaries’ income brackets due to errors in IRS reporting. It’s worth checking if there were any discrepancies on your father’s 2022 tax return that might have impacted the premium calculation.
- Lack of “Hold Harmless” protection: Some beneficiaries are protected under the “hold harmless” provision, which prevents their Part B premiums from increasing more than the annual Social Security cost-of-living adjustment (COLA). However, this provision only applies to individuals who have their Medicare premiums deducted directly from their Social Security payments and who have a low income. If your father doesn’t qualify for this protection, his premiums could increase dramatically if he’s hit with an IRMAA.
- Life-Changing events: If your father has retired or experienced a significant life change recently (like a change in employment or the death of a spouse), this could also impact his IRMAA assessment. Social Security allows beneficiaries to appeal their IRMAA if their income situation has changed since the tax year used to calculate the premium.
Next steps
Here’s what you can do to address this issue:
- Review income-related adjustments: You should request a detailed breakdown of why your father’s premium increased. Contact the Social Security Administration (SSA) or Medicare to check if an IRMAA has been applied and whether it accurately reflects his 2022 income.
- Appeal to the IRMAA: If you believe the income used for the IRMAA calculation is incorrect or if your father has had a significant life change (e.g., retirement), you can appeal the decision by filing a “Request for Reconsideration” with the SSA. You’ll need to provide documentation showing the income change or life event that should reduce the IRMAA.
- Contact Medicare directly: Sometimes these premium increases result from administrative errors or glitches. Since it’s difficult to reach Medicare on weekends, set an appointment for Monday and bring along any relevant documents, such as recent tax returns and Social Security statements, when you visit the Medicare or Social Security office.
