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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.
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