How to Reduce Your Medicare Premiums

With Medicare, Part A covers hospitalizations and typically costs $0 in premiums. Medicare Part B covers outpatient services and for 2023, the price for most individuals was $164.90 per person per month.

For 2024, the $164.90 premium is now going up to $174.70 per person per month. If you’re collecting social security (either on your own or via a spouse), the premiums will be taken out of your check automatically.

However, individuals with higher incomes will also experience further increases in premiums.

Medicare Part B premiums are based on a sliding scale system dependent on income. The idea is that higher-income earners are required to contribute more to the Medicare system to further offset the cost for everyone else. There are no additional benefits to paying more into the system.

For 2024, individuals making more than $103,000 a year filing single or $206,000 a year filing jointly will be subject to income surcharges based on their level of income. There are 5 tiers of income surcharge ranges with the top tier being $500,000 (single)/$750,000 (joint). How your income surcharges are determined is by your Modified Adjusted Gross Income (MAGI) on your 2022 tax returns. If your income was greater in 2022, then you’ll be assessed a surcharge accordingly for 2024.

Income surcharges also apply to Medicare Part D (prescription) premiums as well. Please see the table below for the income surcharges for 2024:

Part B IRMAA:

Part D IRMAA:

What if your income has changed since then?

For many of you, your income may have been higher in 2022 and has since decreased due to retirement, divorce, working part-time, etc.

If you’ve experienced an income reduction that puts you in a lower surcharge bracket, then it’s wise to file a Medicare income appeals form (SSA-44) indicating a lower income. You can file the SSA-44 form if you experienced any of the following life-changing events:

• Marriage

• Divorce/Annulment

• Death of your spouse

• Work stoppage

• Work reduction

• Loss of income-producing property

• Loss of pension income

• Employer settlement payment

Here’s the link to download a PDF of the SSA44 form: https://www.ssa.gov/forms/ssa-44.pdf

What you’ll need to prepare an appeal is the following:

• Your projected income for 2024 (Medicare will take your word for it and reassess any premiums if your situation changes down the road)

• Proof of a reduction in income. This can be a retirement/termination letter (if leaving employment) or an updated tax return with a new adjusted gross income.

The SSA44 appeals form and proof will need to be faxed to your local social security office. It can typically take up to 60 days for your appeal to be processed. Any surcharges that you pay in the meantime will be retroactively refunded.

Unfortunately, if your 2023 income was also higher than the surcharge thresholds, then you’ll need to file an appeal in 2025 as well.

Although prices are going up, It’s always wise to make sure you’re not overpaying for your Medicare premiums.

As Yogi Berra once said, “A nickel ain’t worth a dime anymore.”