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Lowering Your Medicare Surcharge Might Be Possible

Lowering Your Medicare Surcharge Might Be Possible

| January 10, 2021

Wait, Medicare has a surcharge?

Sadly .... depending on your MAGI, see potential adjustments in chart above.  Also sadly or worse, not trivial. For a couple, additional possible charge up to $433.50 per month ... each. Yikes!

Prepare Ahead of Time

While this post is mainly about trying to change a Medicare surcharge that has already been imposed, it might be possible in some situations to plan ahead to lower or completely avoid a surcharge. Business-owners and / or owners of real estate other than your primary residence might be able to tweak their situation. Consult your financial and tax advisors.

On the more challenging but ultimately positive side, if you begin an ongoing increase in income, e.g. ongoing pension e.g. ongoing annuity payments - if these will continue multiple years and put you into a long-term higher income status, it might be difficult to avoid or lower a surcharge.

Or After the Fact - Maybe your surcharge can be reduced or avoided

The above chart numbers might be based on outdated info, i.e. not your latest or soon-to-be latest tax return. So "if you had a life-changing event and your income has gone down," it might be possible for Medicare to reduce your "income-related monthly adjustment amount." Source: Linked attached Medicare Form SSA-44

Medicare could take under consideration any of the following "life-changing events." Note that you would also have to provide supporting documentation to Medicare / Social Security.

  1. Marriage
  2. Divorce / Annulment
  3. Death of Your Spouse
  4. Work Stoppage
  5. Work Reduction
  6. Loss of Income-Producing Property
  7. Loss of Pension Income
  8. Employer Settlement Payment

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