22 NOVEMBER 10 - NOVEMBER 16, 2017 BROOKLYN MEDIA GROUP
THE ELDER LAW MINUTE TM
BY RONALD A. FATOULLAH, ESQ. & JOSEPH BRENINGSTALL Understanding Medicare Part B premiums
It is important for those enrolling,
or already enrolled, in Medicare
to understand how the premiums
work and when they may be adjusted.
All beneficiaries of Medicare
Part B are required to pay a monthly
premium. The standard Part B
premium in 2017 is $134 monthly;
however, the premium rises when
the beneficiary’s income passes
certain thresholds.
The standard Part B premium applies
to beneficiaries with a modified
adjusted gross income (MAGI) of
$85,000 or less ($170,000 if married
and filing a joint return), but the
premium can rise by an additional
$294.60 for beneficiaries that have an
MAGI of $214,000 or more ($428,000
if married and filing a joint return).
Medicare refers to these higher
premiums as Related Monthly Adjustment
Amount (IRMAA).
The Social Security Administration
uses the MAGI reported on a beneficiary’s
IRS tax return two years prior
to determine whether he or she must
pay a premium surcharge. Thus, the
income reported on a beneficiary’s
2015 tax return determines the 2017
premium.
Most beneficiaries of Medicare
Part B pay the standard premium;
however, an issue arises when a
beneficiary who is paying a premium
surcharge experiences a life
event or change in circumstances
that results in a significant drop in
income.
Whether an individual can request
an adjustment to his or her premium
would depend on the specific nature
of the event. The Social Security Administration
allows a beneficiary to
request a review of his or her income
when the individual experiences any
of the following circumstances:
The individual married, divorced
or became widowed;
The individual or his/her spouse
stopped working or reduced his/her
work hours;
The individual or his/her spouse
lost income-producing property
because of a disaster or other event
beyond his or her control;
The individual or his/her spouse
experienced a scheduled cessation,
termination or reorganization of an
employer’s pension plan;
The individual or his/her spouse
received a settlement from an
employer or former employer
because of the employer’s closure,
bankruptcy or reorganization.
The Social Security Administration
will require the beneficiary to
complete Form SSA-44 and provide
documentation verifying the change
in circumstance and the resulting
reduction in income. Several examples
of the required documentation
include a death or marriage certificate,
a divorce decree, a letter from an
employer regarding a beneficiary’s
retirement, or an insurance company
adjuster’s statement of loss. If the
beneficiary filed a tax return for the
year in question, he or she will need
to provide that as well.
There are many instances in which
a beneficiary may experience a significant
loss of income but unfortunately
would not be eligible for an adjustment
to his or her premium. A bad
investment or major downturn in the
stock market would be one example of
this situation.
There is, however, one case in
which the Social Security Administration
will review income even
though it does not fall into one of the
enumerated categories, and that is
when a beneficiary filed his taxes as
“married filing separately,” but lived
apart from his spouse at all times
during the year.
Given that this is a slightly more
complex situation, the Social Security
Administration directs that a
beneficiary who finds himself in this
circumstance should contact the SSA
directly rather than filing the standard
Form SSA-44.
Anyone who feels that one or more
of the circumstances above applies to
him or someone they know can locate
Form SSA-44 with the accompanying
instructions at https://www.ssa.gov/
forms/ssa-44.pdf.
Ronald A. Fatoullah, Esq. is the
principal of Ronald Fatoullah & Associates,
a law firm that concentrates
in elder law, estate planning, Medicaid
planning, guardianships, estate
administration, trusts, wills, and real
estate. Joseph Breningstall is a law
clerk with the firm. The law firm can
be reached at 718-261-1700, 516-466-
4422, or toll-free at 1-877-ELDER-LAW
or 1-877-ESTATES. Mr. Fatoullah is
also a partner with Advice Period, a
wealth management firm, and he can
be reached at 424-256-7273.