Most seniors understand that Medicare changes annually on January 1. The Federal Agency charged with administration of Medicare (Center for Medicare and Medicaid Services, or CMS), publishes changes to Medicare during November or early December.
2023 Changes To Medicare
Commencing January 1, 2023, following changes to Medicare will apply:
- Part A Benefit Period deductible will increase from $1556 to $1600;
- Part B Calendar Year deductible will decrease from $233 to $226;
- Part B base Monthly Premium will decrease from $170.10 to $164.90.
With regards to the Part B monthly premium, if you are impacted by the Income Related Monthly Adjustment Amount (IRMAA), your Part B monthly premium may be higher.
IRMAA Explained
IRMAA is a Part B monthly premium surcharge based on the Modified Adjusted Gross Income (MAGI) line of your Federal Income Tax return two years prior, so review your tax return for tax year 2021 to determine if this adjustment applies for calendar year 2023.
IRMAA works like this: If your 2021 MAGI exceeds the base threshold ($97,000 single filer or married filing single, or $194,000 married filing jointly), you will pay a higher Part B monthly premium during calendar year 2023.
These premiums are calculated by brackets. As of this writing, the actual premium amounts for each bracket have not been published by CMS.
Bracket #1
Single: Equal to or greater than $123,000
Married Filing Jointly: Equal to or greater than $246,000
Bracket #2
Single: Equal to or greater than $153,000
Married Filing Jointly: Equal to or greater than $306,000
Bracket #3
Single: Equal to or greater than $183,000
Married Filing Jointly: Equal to or greater than $366,000
Bracket #4
Single: Equal to or greater than $500,000
Married Filing Jointly: Equal to or greater than $750,000
Married Filing Separately Equal to or greater than $403,000
Bracket #5
Single: Equal to or greater than $500,000
Married Filing Jointly: Equal to or greater than $750,000
Married Filing Separately Equal to or greater than $403,000
You will receive advanced notice from the Social Security Administration if the IRMAA applies to you in 2023. That notice will include the amount of the IRMAA increase.
Please note there are circumstances under which you may apply for appeal of this surcharge.
Appealing IRMAA
If your income two years ago was higher because you were working at that time and now your income is significantly lower because you retired (“work reduction” or “work stoppage”), you can appeal the IRMAA initial determination.
The “life-changing events” that make you eligible for an appeal include:
- Death of spouse
- Marriage
- Divorce or annulment
- Work reduction
- Work stoppage
- Loss of income from income producing property
- Loss or reduction of certain kinds of pension income
You may file an appeal with the Social Security Administration by filling out the form SSA-44 to show that, although your income was higher two years ago, you had a reduction in income now due to one of the life-changing events above.
For more information on the appeal, refer to Medicare Part B Premium Appeals.
If you are charged an IRMAA, it will apply only to that calendar year’s Part B monthly premium. If your MAGI on your next Federal Income Tax return drops below the bracket +1 threshold for the following year, the IRMAA will be removed. You will return to the base Part B monthly premium for that calendar year.
I hope you find this helpful. If you have questions or comments, please feel free to send them to kenbrown@floridamedicarespecialists.com.
