What You Need to Know for Open Enrollment
Interview by: Heidi Frankel |
fyi50+: Fall is the time of year when the leaves and seasons change. It is also the time of year when people over the age of 65 start considering, comparing, and changing what type of Medicare plan they want to use in 2022. Understanding the details about Medicare is a challenging task.
I asked David Freitag to list a few items about Medicare that are confusing and often overlooked.
How the Cost of Medicare Premiums Is Determined
David Freitag: The big question is always the cost of premiums, and that varies based on your income. In 2021, if you are married and have a joint income less than $176,000, traditional Medicare Part B coverage is just $148.50 a month per person. Expect Medicare premiums to increase in 2022. Additionally, Part B coverage does not include prescription drugs, so people also buy Part D coverage for prescription drugs, which is a separate premium.
Again, if your income is less than $176,000, the cost varies depending on the type of drugs you need but is generally very affordable. With traditional Medicare, people often also buy a supplement policy that covers the deductibles in Medicare Part A and B.
One big misunderstanding about the cost of Medicare premiums is that it is means-tested. A married couple with an income more than $176,000 is subject to IRMAA (Income Related Monthly Adjustment). IRMAA can be a huge deal.
For high-income people, IRMAA surcharges can increase the monthly Medicare Part B price from $148.50 to more than $500 — per person. These IRMAA surcharges extend to Part D prescription drug coverage as well.
Which Year’s Income Is Used to Determine Medicare Pricing
The income measurement is based on your earnings from two years ago. Between then and now, if your income lowered because of a life-changing event, it is possible to appeal these IRMAA surcharges using form SSA-44. Find that form online here.
Because the Government doesn’t know if your income has gone down due to a life-changing event (you having retired, married or divorced, had a spouse die, lost income-producing property, or lost a pension), you should file the SSA-44 form and ask for relief from the IRMAA surcharges.
Medicare and Health Savings Accounts
Remember, when enrolled in any part of Medicare, you can no longer contribute to a Health Saving Account. You can use money in your HSA, but you cannot put more money into the account.
Help With Choosing the Right Health Insurance
It is easy to get confused about your Medicare choices. Each state has a particular free program designed to help you make good decisions about health insurance in retirement. Staff and volunteers working there have access to rates and plan details. These tools can help make program and benefit shopping less confusing.
Texas has its own program. Check it out here: https://www.hhs.texas.gov/services/health/medicare
The Medicare Open Enrollment Period
Enrolling in Medicare is a once-per-year opportunity. Make an informed decision about Medicare. Match your needs to the plans. Find out how much the supplement premiums will cost based on your income. Note the window will close on December 7th.