04 Jul My Medicare went up after I sold my home. What can I do?

Q. My IRMAA has gone up since the sale of my second home two years ago. How long will this increase last and do I need to appeal in a year to lower it back down since that sale only affected my income for one year or does the adjustment back down happen automatically a year later?
— Senior

A. Let’s first get the acronyms out of the way.

IRMAA, short for “Income Related Monthly Adjusted Amount,” is a surcharge applied to both Medicare Part B and Part D insurance premiums when modified adjusted gross income, or MAGI, exceeds certain thresholds.

From your question, it’s likely that a capital gain from the sale of your second home two years ago was reported on your 2021 income tax return, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

She said the figure would be included in the calculation of modified adjusted gross income, on which the IRMAA surcharge is based.

For Medicare purposes, modified adjusted gross income is defined as total adjusted gross income plus tax-exempt interest income, she said, and there is a two-year lookback on the tax return, so 2021 is being used for the calculation of 2023’s surcharge.

“For an individual, MAGI over $97,000 will be considered for the IRMAA surcharge and for a couple, it’s $194,000,” she said, noting there are a number of breakpoints that determine how much the surcharge will be using the MAGI. “IRMAA is adjusted annually when new tax return information is provided by the IRS to Medicare and the Social Security Administration will mail a notice regarding the assessment of a surcharge.”

There is an appeals process which starts with the filing of a form SSA 1-800 with the Social Security Administration, she said.

“The office of Medicare hearings and Appeals (OMHA) reviews appeals related to IRMAA,” she said. “However, there are a number of specific requirements that must be met to request reconsideration.”

You can learn the details about appeals here.

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This story was originally published on July 4, 2023.

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