Our Congress wrote legislation which was intended to reinforce the opportunity to enroll into Medicare when first eligible (if a delayed enrollment, such as when you are covered by your employer’s healthcare plan). This was done by adding a ten percent (10%) additional amount to the Part B monthly premium, for each 12-month period without fully enrolled Medicare coverage. Also, for individuals and couples filing jointly who may have greater annual modified adjusted gross incomes, an Income-Related Monthly Adjusted Amount (IRMAA) may be assessed. The Social Security Administration determines the additional IRMAA amount once the Internal Revenue Service provides prior-year federal income tax information. The good news is that for both premium-related situations, you can (and should) appeal if appropriate.
Part B late enrollment penalty (LEP)
For each 12-month period you delay enrollment in Medicare Part B (the healthcare coverage for outpatient care), you will owe a 10% Part B premium penalty—unless you have insurance based on your or your spouse’s current work or are eligible for a Medicare Savings Program. In most cases, you will have to pay that penalty every month for as long as you have Medicare. However, if you are enrolled in Medicare because of a disability and currently pay premium penalties, once you turn 65, you will no longer have to pay the premium penalty. Everyone has a right to file an appeal with the Social Security Administration regarding their Late Enrollment Penalty. To appeal, follow the directions on the letter informing you about the penalty. You can appeal to remove the penalty if you think you were continuously covered by Part B or job-based insurance. You can also appeal to lower the penalty amount if you think it was calculated incorrectly. Unfortunately, being unaware of the requirement to enroll in Part B is unlikely to be a successful argument for an appeal.
Part D late enrollment penalty (LEP)
For each month you delay enrollment in Medicare Part D (the healthcare insurance for your prescription drug plan), you will owe a one percent (1%) Part D LEP, unless you:
have other creditable coverage, meaning coverage that is as good or better than the basic Part D benefit;
qualify for the Extra Help program as determined by the Social Security Administration; or,
prove that you received inadequate information about whether your drug coverage was creditable.
Note that the Part D penalty is calculated using this year’s national base beneficiary premium, which is about $36 per month. Your penalty will not decrease if you enroll in a Part D plan with a lower premium. In most cases, you will have to pay that penalty every month for as long as you have Medicare. If you are enrolled in Medicare because of a disability and currently pay a premium penalty, once you turn 65, you will no longer have to pay the penalty.
Everyone has the right to file an appeal with the Medicare contractor, C2C Innovative Solutions Inc., regarding their LEP determination. You can appeal the penalty (if you think you were continuously covered) or its amount (if you think it was calculated incorrectly). You should complete the appeal form you received from your plan, attach any evidence you have, and mail everything to C2C Innovative Solutions at the address provided in the notification letter received.
IRMAA assessments and appeals
An Income-Related Monthly Adjustment Amount (IRMAA) is the amount you may owe in addition to your Part B and Part D premiums if your income is above a certain level, affecting approximately eight percent (8%) of Medicare recipients. Federal law sets income brackets that determine your—or you and your spouse’s—IRMAA.
This year, an individual with a prior year modified adjusted gross income (MAGI) greater than $106,000 will likely be assessed an IRMAA; for couples filing a joint return, the prior year MAGI greater than $212,000 will likely be assessed an IRMAA.
If the Social Security Administration determines that you owe an IRMAA, they will mail you a notice called an initial determination. This notice will include information on how to request a new initial determination. A new initial determination is a revised decision that Social Security makes regarding your IRMAA. You can request that Social Security revisit its decision if you have experienced a life-changing event that caused an income decrease, or if you think the income information Social Security used to determine your IRMAA was incorrect.
To discuss any Medicare premium-related concerns, or to ask any questions regarding your specific situation, please contact the State of Alaska Medicare Information Office at 800-478-6065 or 907-269-3680. Our office is also known as the State Health Insurance Assistance Program (SHIP), the Senior Medicare Patrol (SMP), and the Medicare Improvements for Patients and Providers Act (MIPPA) program. If you are part of an agency or organization that assists seniors with medical resources, consider networking with the Medicare Information Office. Call to inquire about our new Ambassador program.
Sean McPhilamy is a volunteer and Certified Medicare Counselor for the Alaska Medicare Information Office.
