Medicare Part B & D – Why am I paying more?

Did you know decisions made 2 years ago can affect what you pay for Medicare Part B and D premiums for the current year?

That’s right; premiums for 2024 are determined by your 2022 tax filing.

Each year around this time, Medicare Part B and D premiums, deductibles, and coinsurance are set for the upcoming year.

The standard premium for 2024 will be $174.70.  This is a $9.80 per month increase from 2023.  The standard deductible increases by $14 to $240 in 2024.

The standard premiums are offered to those with modified adjusted gross income (MAGI) thresholds less than or equal to $103,000 for an individual filing or $206,000 for joint tax return filings from your 2022 tax return.

Should your MAGI be $1 over the above amounts, there is a surcharge called the income-related monthly adjusted amount (IRMAA) added to your monthly premium.  There are 5 surcharge brackets that increase your monthly premiums by 1.4, 2.0, 2.6, 3.2, or 3.4 times the standard premium which can be substantial considering a married couple would have both of their Medicare Part B and D premiums increased.

There are situations where the IRAA amount can be appealed.  Amended returns and life-changing events such as death of a spouse, divorce, marriage, work reduction or stoppage, loss of an income producing property, or loss or reduction of certain kinds of pension income are examples that qualify for the appeals process.

Most retirees are on a fixed income and keeping an eye on that income and tax planning become very important.  So, before selling that rental or investment property, selling the appreciated stock, taking an extra distribution to pay off that mortgage or to pay for a wedding or college, consider and plan for the possible implications that can arise regarding your Medicare Part B and D premiums 2 years down the road.