Hello Toni:

I am turning 65 in July, self-employed and my income is over $250K. Recently I received a letter from Social Security telling me that my monthly Medicare Part B premium of $135.50 would be doubled to $270.900 per month due to 2017 reported income. That was no surprise, but Social Security also said that the monthly adjustment for prescription drug coverage would be an additional $31.90. What is this all about?

I am in excellent health and take NO prescriptions. What happens if I do not apply for a Medicare prescription drug plan? Do I still have to pay the “extra” $31.90?

Also - What if a person goes the Medicare Advantage route instead of original Medicare + a supplement? Do they get to avoid the additional $135.50 per month for Part B and the $31.90 per month for prescriptions? Thanks, Mike from Oklahoma.

Hi Mike:

You cannot avoid the additional premiums if your income is above a certain limit.

You will have to pay more on your Medicare Part B Medical premium and Part D Medicare Prescription Drug premium when you have enrolled in a Medicare Part D prescription drug plan.

Social Security bases your income on both you and your spouse whether they are Medicare age or not. The MAGI (modified adjusted gross income) amount that is reported on your yearly income taxes is what triggers the addition Part D IRMAA (income related monthly adjusted amount) premium increase.

The bottom line is if your income is over these amounts and you have your Medicare prescription drug plan from either a Medicare Advantage (Part C) or Stand-alone Medicare Prescription Drug plan (Part D), you will pay the additional IRMAA premium, whether you are deducting your premiums from your Social Security check or paying direct to Social Security because you have not started taking your Social Security check.

Remember… if you are not enrolled in a Part D prescription drug plan at the right time, you will not have prescription drug coverage and will receive a Part D late enrollment penalty when you sign up at a later date and will not be a happy-camper!

Mike, since you are self-employed and not covered by “true” employer’s group health insurance, during a Toni Says Medicare consultation, we advise everyone to enroll in a Part D prescription drug plan whether you are taking no prescriptions or a lot of prescriptions. No one wants an additional penalty whether it is the famous “Medicare Part B penalty” or a Medicare Part D penalty.

Enrolling in a Medicare Advantage plan instead of Original Medicare with a Medicare supplement and a Medicare Part D plan does not keep Medicare from charging the additional IRMAA premium for both Medicare Parts B and D. Social Security will be sending you the bill to you specific amount.

Toni King is the author of the 2018 Medicare Survival Guide Advanced edition, available at the tonisays.com.

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