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Understanding Medicare’s IRMAA Appeals Process

Older couple filling out IRMAA appeals forms

If your Medicare Part B premium is too high, you may be able to appeal it and get it lowered. The same goes for your prescription drug plan premium. The IRMAA appeals process can help you reduce the amount of tax you pay on your monthly premium and potentially even get a refund. Plus there are other ways to lower your Medicare premium. Keep reading to find out more.

What is the IRMAA Appeals Process?

IRMAA stands for Income-Related Monthly Adjustment Amount. The Medicare IRMAA Appeals process is a way to challenge your IRMAA level if you feel it’s too high. You can submit an appeal to the Social Security Administration, showing evidence that your income or assets have changed since they initially determined your premium. This could include changes like losing a job, moving to a lower cost of living area, or getting married or divorced. If successful, your premium may be reduced, refunded, and/or adjusted accordingly.

Medicare is means tested.

The more you make, the more you pay to the Medicare program. But not all income counts. So, it’s possible to rearrange your finances in such a way as to lower your Medicare costs. After you have done that, you can appeal your IRMAA determination. Be sure the read the section below called “Ways to Pay for Health Care Costs Without Increasing IRMAA.”

How IRMAA Appeals Process Works?

Yes! You have the right to file an IRMAA Appeals if you disagree with the Social Security Administration’s (SSA) determination of your Medicare Part B premium. However, certain qualifications and requirements must be met in order to file this type of appeal. Basically, your IRMAA Appeals requires the following:

  • You need to show a ‘substantial change in financial circumstances’ that was not known by SSA when they issued the initial decision.
  • Then you need to provide evidence of said changes (like tax returns or pay stubs).
  • And finally, you need to file within 120 days of receipt of the notification letter.

(There are other requirements. This is just a summary.)

What Is Income For IRMAA?

Types of income that count towards IRMAA include:

  • Taxable Social Security benefit
  • Wages
  • Pension Income
  • Rental Income
  • Capital Gains
  • Dividends (including municipal bonds)
  • Qualified Annuities
  • Traditional 401(k) distributions
  • Traditional IRA distributions
  • Traditional 403(b) distributions
  • Traditional 457 distributions
  • Traditional SEP-IRA distributions

For IRMAA purposes, income is defined as adjusted gross income or AGI — the portion of income that you would report to the IRS. It includes wages, salaries, investment and other earned income, plus any taxable Social Security benefits and alimony. In addition, all tax-exempt interest, rental and royalty income, self-employment income, capital gains proceeds and any foreign earned income must be included for IRMAA determination purposes.

SSA Deducts Your Cost of Medicare From Your Social Security Benefits.

The bulk of your Medicare costs are automatically deducted from your Social Security benefits. Here is what the Social Security Administration says:

“If the benefit amount is not enough to cover the Part B deduction, SSA withholds as much as possible and bills the beneficiary for the remaining balance due.”

Social Security Program Operations Manual System (POMS).

What is Not Income for IRMAA Appeals?

Income that does not count towards IRMAA includes:

  • Certain life insurance policies
  • Roth Accounts (employer and individual)
  • Specific Annuities
  • 401(h) Plans
  • Health Savings Accounts (HSAs)
  • Home Equity

Certain kinds of life insurance and annuities can provide an income stream. But most life insurance agents won’t know how to help you. Give us a call at 602-443-4888 and we can help you choose the right one.

There are certain items that are excluded when it comes to determining income for the purpose of calculating your IRMAA. These include veterans’ disability payments, most gifts or inheritances, favorable settlements for physical or mental injury, and rent from Section 8 programs.

Ways to Pay for Health Care Costs Without Increasing IRMAA.

Although it can be difficult to pay for health care costs without impacting your Medicare premium, there are steps you can take to reduce the amount of your IRMAA charges. Unfortunately, we have yet to meet any financial planner who can help in this area. We are hoping that more professional advisors become familiar with IRMAA Appeals. But for now, please just call us and we can put you in touch with the handful of people in the country who can help.

Don’t Do Your IRMAA Appeals On Your Own ! You Can’t Afford to Make a Mistake.

As far as we know, we are the only law firm in the entire U.S. that is familiar with IRMAA appeals. There are different ways to solve your problem. We will refer you to the appropriate person as need. Call us today at 602-443-4888. We will help you!

(Much of the technical details in this blog post are thanks to Dan McGrath, one of the nation’s leading authorities on how the costs associated to health care are impacting investors’ retirement and Social Security benefits.)



Founding attorney Paul Deloughery has been an attorney since 1998, became a Certified Family Wealth Advisor. He is also the founder of Sudden Wealth Protection Law.