Part B IRMAA
The Part B IRMAA is a charge that increases your Part B premiums according to your income as reported on your tax return.
Medicare Part B Premiums
All Medicare beneficiaries pay monthly premiums for Medicare Part B. If you receive retirement benefits from Social Security or the Railroad Retirement Board, your premiums will be taken out of your benefit payments. If not, you will receive a bill from Medicare every three months.
The 2022 Medicare Part B standard premium is $170.10. The people who pay this amount are those who in 2020 had incomes in the lowest bracket. Individuals who made $91,000 or less receive this rate. Couples who filed a joint tax return of $182,000 or less receive this rate, as do married people filing separately who reported $91,000 or less in income in 2020.
If you made more than the income that qualifies for the standard Part B premium, Medicare will impose an additional charge.
Part B IRMAA 2022
When you make an income that is higher than the tax bracket that qualifies for the standard rate, you will be charged an Income Related Monthly Adjustment Amount (IRMAA). This Part B IRMAA is added to the standard premium to make your monthly premium rate slightly higher based on how much more you made than the standard grouping. The more money you made, the higher your IRMAA will be.
There is not one set Part B IRMAA rate. It depends on how much income you reported on your 2020 tax returns. Individuals who made an income between $91,000 and $114,000 will pay Part B premiums of $238.10. Individuals with an income between $114,000 and $142,000 will pay a monthly premium of $340.20 for Part B. Individuals with an income between $142,000 and $170,000 will pay a Part B premium of $442.30. Individuals earning between $170,000 and $500,000 will pay $544.30 in Part B premiums. Individuals earning more than $500,000 will pay $578.30 each month for Part B.
Late Enrollment Penalties
The other cost tied to Medicare Part B that may impact your budget is the Part B late enrollment penalty. If you fail to sign up for Medicare Part B when you are first eligible for Medicare, you may have to pay this fee.
The Part B late enrollment penalty adds 10% of the standard Part B premium to your monthly rate for each 12 months you went without signing up for Part B after you were eligible for Medicare. This penalty applies for the lifetime of your Medicare coverage.
Importantly, if you qualify for a Special Enrollment Period, you may not be subject to this penalty. One common example is if you are still employed when you reach age 65 and have group health insurance through your employer. You can retain this coverage and delay enrolling in Part B until you are no longer employed or lose coverage, whichever comes first. You then have eight months to sign up for Medicare.
Part B Costs
Under Medicare Part B, you will be paying not only your premiums and associated IRMAA charges but also a yearly deductible, copayments, and coinsurance. The 2022 Part B deductible is $233. Copayments for Medicare Part B covered services are 20% of the Medicare-approved amount.
Understanding your costs under Medicare is critical to making decisions about your coverage. Ready to plan your health insurance? Midwest Medigap is poised to guide you through the process of comparing plans and finding the coverage you need.
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