How To Lower Your Medicare Premiums: 3 Easy Steps

If you pay a higher Medicare premium because of your high income, there is a way to potentially lower it.

You can request a reduction to your income-related monthly adjustment amount in 3 easy steps.

Why do some people pay a higher Medicare premium?

If you have a high income, you could pay more in premium for your Part B medical insurance and Part D drug plans.  

The surcharge is called an income-related monthly adjustment amount (IRMAA), which just means you’re going to pay more than most people for your monthly Medicare premiums.

Around 7% of folks with Medicare pay more depending on how high their income was on their last tax return.

Who pays a higher Medicare premium?

The income thresholds and premium surcharges change every year. In 2022, if you file taxes individually and your income on your tax return from 2 years ago was higher than $91,000, your Medicare premiums will increase. If you file taxes jointly and your total income was higher than $182,000, you’ll also pay more for Medicare.

Your surcharge could be anywhere from $62-$408.20 more per month for Medicare Part B. That's an extra $744 to nearly $5,000 per year!

Medicare looks back two years – so if your yearly income in 2020 was higher than $182,000 (filing jointly), you’d pay more for Medicare in 2022 based on that annual income.  

Here's a quick look at what you'd pay for Medicare Part B, based on your income:

And here's a look at the extra surcharge you'd pay for Part D prescription drug insurance, based on your income:

This poses a problem for a lot of people, because a lot can change in two years. Your income now may not be anything close to what it was two years ago, especially if you’ve just retired.

Note: you only pay the Part D drug plan surcharge if you have a Part D drug plan.

How can I reduce my Medicare premium?

If you’ve had a life-changing event, you can reduce your Medicare premiums in 3 simple steps.

Step 1: Gather evidence that your income has changed because of a life-changing event.

There are 7 life-changing events that allow you to request a reduction in your Medicare premium:

1. Marriage

2. Divorce/Annulment

3. Death of Your Spouse

4. Work Stoppage or Reduction

5. Loss of Income-Producing Property

6. Loss of Pension Income

7. Employer Settlement Payment

The most common of these is “Work Stoppage or Reduction.” You can use this category if you or your spouse stopped working or reduced the hours that you work.

If any of these events applies to you, you’ll need to gather evidence to send in with your request to reduce the income-related monthly adjustment amount (IRMAA).

Here is a list of acceptable evidence:

1. Marriage: marriage certificate

2. Divorce/Annulment: decree of divorce or annulment

3. Death of Your Spouse: death certificate, public record of death, or coroner’s certificate

4. Work Stoppage or Reduction: signed statement from your employer, copies of pay stubs, documents that show a transfer of your business, or a signed statement under penalty of perjury that you partially or fully stopped working or accepted a job with reduced compensation

5. Loss of Income-Producing Property: copy of an insurance company adjuster’s statement of loss or a letter from a state or federal government about the uncompensated loss. If the loss is due to investment fraud, you also need proof of conviction for the theft, like a court document citing theft or fraud relating to you or your spouse’s loss.

6. Loss of Pension Income: letter or statement from your pension fund administrator that explains the reduction or termination of your benefits

7. Employer Settlement Payment: letter from the employer stating the settlement terms of the bankruptcy court and how it affects you or your spouse

Step 2: Go to ssa.gov/forms and download SSA-44, Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event.

Now that you have your evidence of a life-changing event, it’s time to fill out SSA-44.

Go to ssa.gov/forms and find form SSA-44: Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event.

This form is fillable, so you can type in your information on the computer before you print and mail it.

Step 3: Mail in the completed and signed form along with your evidence and wait for the decision.

Once you’ve completed and signed the form, you can mail it to your local Social Security office.

It’s very important that you sign the form and fill in your phone number and current mailing address. The SSA will need this information to contact you if they have questions about your request.

If you prefer, you can take your completed form to your local social security office. In addition, if you are a client of ours – or would like to be! – we can fax this form for you.

Conclusion

If you are paying a higher Medicare premium because of your high income, you may be able to lower it by completing form SSA-44.  

There’s no harm done in filling out this form, and in a best-case scenario, you could save thousands in Medicare premiums!

If you have Medicare questions, please schedule an appointment with one of our licensed sales agents.