12 Dec I had a one-time income jump and Medicare rose. What can I do?

Q. In 2021, I had to take a hardship withdrawal from my 401(k) pre-tax account to take care of my wife’s medical bills and to provide for her daily care outside of the country. By the way, my wife is not fully recovered and I am still taking care of her outside the country. Now I am eligible for Medicare and have been hit with IRMAA for Parts B and D because of the 401(k) distribution. Since the withdrawal was to take care of medical bills and ongoing care out of the country, would it be possible to successfully appeal the IRMAA? My wife is a U.S. citizen, but can no longer work because of her sickness.
— Husband

A. We’re sorry to hear about your wife’s health struggles and we wish her well.

Let’s start at the beginning.

Medicare, the government’s health insurance for seniors, has several parts, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.

Part A of Medicare covers the hospital bed, food and nursing care. There is no charge for Part A because you paid into Medicare over your entire working career, he said.

Part B covers the doctor’s care and hospital procedures. Part D covers drugs and prescriptions.

“The government charges you for Parts B and D,” Kiely said. “How much you pay is determined by your income.”

The 2024 basic cost for Medicare part B is $174.70 per month for singles earning less than $103,000 and couples earning $206,000 or less, he said.

If you earn more than these minimums, then IRMAA — short for Income Related Monthly Adjusted Amount — kicks in.

Kiely said the income limits are based on your tax return from two years ago. So, 2024 IRMAA is based on your 2022 tax return.

He said if you had a life-changing event that affected your household income, you can request that your IRMAA surcharge be reduced,” he said.

“A life-changing event can be a one time increase in income like the non-recurring sale of property, loss of a job or retirement,” he said.

You make this request by completing Form SSA-44 Medicare Income Related Monthly Adjustment Amount – Life Changing Event.

There is no guarantee that the government will lower your IRMAA charge, Kiely said, but it’s absolutely worth a try.

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This story was originally published on Dec. 12, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.