Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (12) | Ignore Thread Prev Thread | Next Thread
Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19021  
Subject: More MAGI & Medicare Date: 11/28/2012 5:24 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
If you are paying the excess MAGI premium for Medicare, take a close look at the letter from Social Security explaining your premium for 2013.

I received mine last week, and was advised that I was being charged the double step extra of $167/mo for part B and $48.30/mo for Part D. The fine print said based on my 2010 MAGI from my income tax return.

2010 was an extra high income year for me because 1) I inherited H bonds with accumulated tax liability and an annuity and 2) the declining stock market caused me to take capital gains profits that year.

The fine print in my letter said I could use my 2011 MAGI, but I needed to contact them to do that. (The letter did not say how or what was required.) I called Medicare, and was referred to Social Security. I called Social Security, but after going through the menus and finding MAGI not listed, I asked to speak to an agent, but was told all agents were busy and to call later at a less busy time, but many problems could be resolved on line. I went on line, but searching for MAGI told me only that I needed to contact Social Security.

Finally I took my 2011 income tax form to the Social Security office which was only 10 miles away. I had no reservation. So took number and waited. At first she said the change required an appeal, and I could not file one unless I have a major change in status such as marriage or death of dependent, etc. But then she realized my letter was based on 2010 rather than 2011. So she completed the appeal on her computer terminal, and I should get revised paperwork in a few days. Took about two hours all together including travel time.

Watch out if you are paying premium extras due to excess income.

MAGI is the sum of your AGI and any tax exempt bond income from your income tax form. 2011 is the year that matters for 2013.

The revision reduces my extra Medicare premium to the first step: $104.90 for part B and $29.90 for part D. Meanwhile I am busy reducing unneeded income and switching to capital gains where possible to try to eliminate this extra payment. Then I will take capital gains if I need the funds. Otherwise, I would be paying $2593.20 in extra Medicare premiums per year.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18083 of 19021
Subject: Re: More MAGI & Medicare Date: 11/28/2012 5:52 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
On second thought, doing it this way allows you to avoid paying the extra Medicare premium when you have a one year spike in income.

When you have that high income year, you merely allow them to use your income from two years ago; when your high income year comes up as 2 yrs ago, you file an appeal to use the year ago number.

Print the post Back To Top
Author: fleg9bo Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18084 of 19021
Subject: Re: More MAGI & Medicare Date: 11/28/2012 7:29 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
doing it this way allows you to avoid paying the extra Medicare premium when you have a one year spike in income.

Sounds like you don't favor making the rich pay their fair share.

--fleg

Print the post Back To Top
Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18085 of 19021
Subject: Re: More MAGI & Medicare Date: 11/28/2012 9:05 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Making the rich pay is fine with me. But of course they are rich every year.

Trapping the middle class with an occasional good year into paying thousands more is not my favorite.

Plus how many pay the bill without realizing they are being overcharged?

Print the post Back To Top
Author: telegraph Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18086 of 19021
Subject: Re: More MAGI & Medicare Date: 11/28/2012 11:22 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Yeah...I got screwed next year.


BUffet came along and bought out my Lubrizol stock. No choice.....I had it for 20 years for the hefty dividend that kept going up and up and up.

Had a 60K gain on top of my normal income. Drove me up over the magic number and my medicare jumped to like 270 bucks a month. Same for part D. Screwed. Of course, I got a 1.5% increase in the SS, but after the jump, I get something like 11 bucks more a year, and you and I know that inflation is really 3.5 to 4% a year....

this year will be a lot lot lower..since my nice 6-7% CDs ran out and now i'm getting 1.5% on them......and so far no one has bought out anything I own.....

Medicare is still likely a 'deal' ......but not as great a one as it was last year.....




t.

Print the post Back To Top
Author: Follydolly Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18087 of 19021
Subject: Re: More MAGI & Medicare Date: 11/29/2012 12:32 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
Heck, I pay in the neighborhood of $200+ a month for Part B Medicare every year since I started taking RMD. Don't think I can appeal that one. Sorry guys, I don't consider myself "rich" or "wealthy", just middle class Walmart shopper. But I do appreciate Medicare and happy to pay the fee.

Birgit

Print the post Back To Top
Author: billjam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18088 of 19021
Subject: Re: More MAGI & Medicare Date: 11/29/2012 8:32 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
Seems to me the system offers a reasonable way to mitigate a single high income year and we ought be happy about that. I hear some of my retired friends complain every year. Hard to have sympathy for them. I'd happily pay the higher premium if it meant I had that kind of income every year. Besides, they are still paying less than I was when buying private health insurance before I went on Medicare

Print the post Back To Top
Author: ResNullius Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18089 of 19021
Subject: Re: More MAGI & Medicare Date: 11/29/2012 9:01 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 6
Besides, they are still paying less than I was when buying private health insurance before I went on Medicare.

I think this is one important factor when folks talk about Medicare and the premiums. Most folks got health insurance from their employer during the pre-Medicare years, and they usually paid very little for it, thus having no idea how much it really cost. When these folks hit 65, they go on Medicare, which they always thought was free, but it's not. Assuming they worked enough, then Medicare Part A is free, subject to some minimal dedutibles. Medicare Part B isn't free. The base premium this year is around $99, with higher AGI folks paying much more. Then you have Medigap, which can cost another $100 or likely more per year. Then you have drug plans that can cost anywhere from minimal to $100 per month. Added together, Medicare with all the extra (and usually necessary) add-ons costs around $4K to $5K per year per person. So, a married couple might end up paying as much as $10K per year for full Medicare coverage with all the added features. For someone who had been paying maybe $2K or so per year for full subsidized coverage through their employer, this represents a huge increase for them. For those of us who were paying for individual policies with companies like Blue Cross, it represents at least a 50% reduction, usually more after you include Blue Cross deductibles and co-insurance. Now, just think: The Dems and the Repubs are both getting ready to jack up the premiums for folks with more than minimal AGIs as part of the fiscal cliff fix, so gosh knows what the premiums will look like if the future for Medicare.

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: telegraph Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18090 of 19021
Subject: Re: More MAGI & Medicare Date: 11/29/2012 10:04 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
next year my Medicare/Supplement will cost me more than my private Blue Cross policy did just before I turned 65.

Of course, it will have near zero deductible......

then again, my average out of pocket expenses for my 2000 deductible were just a couple hundred a year average......and if I skipped the annual physical for the year, way way less....



Next year the income will go below the threshold so I'll get the cheaper rate...



t.

Print the post Back To Top
Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18091 of 19021
Subject: Re: More MAGI & Medicare Date: 11/29/2012 1:37 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Heck, I pay in the neighborhood of $200+ a month for Part B Medicare every year since I started taking RMD.

Yep, the extra Medicare cost is yet another aspect of Required Minimum Distributions from your IRA beginning at age 70-1/2.

That's a reminder that doing a Roth conversion on your IRA if you have low tax years is a good deal. But of course coughing up an extra $20K or more in income taxes to convert a large IRA is hard to take. But they will probably get you for more in income taxes on RMDs.

Another thought is that if you do not have long term care insurance, I hear nursing home is a deductible medical expense. Hence, paying your nursing home fees out of your IRA effectively gets you a 30+% discount (on reduced fed and state income taxes).

Print the post Back To Top
Author: mendomann Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18094 of 19021
Subject: Re: More MAGI & Medicare Date: 11/30/2012 4:15 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
I can vouch for that. I am 74 and my wife is 72 and our total costs for Medicare Part B, Part D and Medigap is +$8,000 for this year and I am not dealing with MAGI.

Print the post Back To Top
Author: ResNullius Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 18095 of 19021
Subject: Re: More MAGI & Medicare Date: 12/2/2012 1:17 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I can vouch for that. I am 74 and my wife is 72 and our total costs for Medicare Part B, Part D and Medigap is +$8,000 for this year and I am not dealing with MAGI.

Yeah, the only reason I got hit with a step up in the premiums was because my wife inherited a small IRA from her 87-year old Dad at his death. We decided to just take it as a distribution in order to avoid the RMD issue until we reach 70. I didn't realize at the time that the distribution would take us above the income level for a higher Part B premium. We passed the mark by a mere $500...bummer, but things should revert to the base level next year.

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (12) | Ignore Thread Prev Thread | Next Thread
Advertisement