Appealing Medicare Part B Premiums

6.6.25: Audio automatically transcribed by Sonix

6.6.25: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
Welcome back to the Federal retirement Show. I'm your host, Val Majewski with American Benefits Exchange. And as always, I really appreciate you taking the time out of your busy schedule to join us to view our content, because it is for you, the federal employee that's looking for accurate and honest information when it comes to your benefits and retirement situation. This is the area that I consider myself an expert in and our reps across the country we are experts in. That doesn't mean we know every single thing absolutely 100%. No, I would never claim that. But with our experience and our ability to help federal employees, we know a whole lot. So the purpose of this channel, the purpose of this show, the purpose of this purpose of this podcast, is so that you can get information. And if you need to dive a little deeper, you can reach out to us and we can review your personal situation, go into the weeds a little bit and make sure that you are properly set up both today as you're going through your working career and as you get into retirement, you don't want to get to retirement and think, man, I wish I would have done this or I should have listened to that person, or I should have listened to that advice. Uh, you can get advice from wherever you want, but do your homework as well. You know, fact check us, fact check other folks. Because, again, I'm not being afraid of a call down if we're saying something incorrect.

Speaker1:
But I want to make sure that you're getting the information you need so you can make the best decisions. And that's where we come today. So this conversation that we're going to have today and we're going to do things a little bit different. We haven't done this before, but we're going to review an article that I found that complements a conversation that I've recently had with a federal employee. And when it comes to, uh, the questions that we get from you all, keep them coming. Love the questions, love the emails. Uh, people suggesting different episodes that we should have, topics that we should talk about. And that means that what we're doing is working, that federal employees like you are listening to the show. Get getting value from the show and you have questions. You have things that you want us to talk about. So recently had a conversation with a federal employee, and we were discussing Medicare and Fhlbb and how those things coordinate. And we've had episodes in the past talking about the coordination of Fhlbb and Medicare, both while you're working and in retirement. But what this question revolved around was whether or not this person should take Medicare Part B, and the the reason why was because while they're working, they're making a higher salary than ideally, what they're going to be getting in retirement. And if they take part B, those premiums are going to be a lot higher because of something called Urma.

Speaker1:
And this is an income related Medicare Part B premium increase. And there's a two year lookback. So if I summarize this, it's saying this was going to be a detriment to this person's taking of Medicare Part B because they're making too much money today. And the two year look back of their their salary while they're working was going to increase their premium a ton. Right. It was going to increase their premium four times what the the normal amount is. And that's to me kind of ridiculous. But it was very detrimental to this person's, you know, plan when it comes to their health care in retirement. And I've just been doing some digging since that conversation and found this article that I want to discuss. So let's pause there. If I set the stage enough, I want to dive into today's content, and we're going to talk about ways that a federal employee can maybe appeal that Medicare Part B price increase. So there are a lot of different places that you can go to get information when it comes to your benefits. And I and I look I search and do things similar. I look at different websites, I read different articles, I watch different people's podcasts. I mean, I like being a student of the game as well. It's not just what I like to preach. I like to, you know, learn as well.

Speaker1:
I'm constantly learning. And it's it's similar. For those of you that that know my background. I played baseball professionally for ten years before doing this. I by no means a household name, um, you know, grinded my way through the minor leagues for ten years, but I always had a coach that had been in the game for a very long time, and one coach in particular was in the game for 50 years, was drafted as an 18 year old, and we celebrated his 68th birthday while he was a manager for a team I played on, had been in the game for 50 years, from 18 to 68, and every now and then there'd be a play or something that happened in the game. He'd be like, I've never seen that before. So this person, this coach of mine was in the game for 50 years and there'd still be a situation of play, something that would happen that would surprise him. Like, I've never seen that before in 50 years. So in a similar fashion, there are things that I've never seen before. There are things that even though I consider myself an expert, there are those less than 1% questions that I've never heard of, and I love being a student of the game when it comes to federal benefits. I think the folks that we've talked to appreciate that as well, that we're we're okay with going through this together.

Speaker1:
So when I looked at this article and I saw this, it perfectly complemented that conversation that I had with this federal employee and the concern about part B premium. Now it's not an end all be all, but it's a suggestion. It's something that is an option that I didn't know existed prior to this conversation. So just going down this rabbit hole and researching for this federal employee, here's an opportunity to talk about a possible solution or an opportunity here to mitigate those higher premiums for part B. So what is this? This is a a website. Got to give credit where credit's due Fred Smith it's a it's a place where you can go for information. There's a lot of different ones. This article is written by Neil Kane and Austin Costello on May 21st of this year, and the title is Recent Federal Retirees. Lower your Medicare Part B premium with one form, and it's a way that you can appeal those higher part B premiums because you're making too much money based on that two year lookback. Right. So some federal employees are going to have a drastic reduction. Let's say you're high three or not your high three, but your ending salary was 200,000 in before you retired. And in retirement it's going to be 100,000 or less. There's a there's a there's a decrease in your retirement income. And but if we look back sorry two years for that part B premium.

Speaker1:
We're you're going to be at that much higher level. And it's a it's a lot more than you're making now. And it's not reflecting your current earnings. There's a way that you can appeal that part B premium increase because you've had a significant drop in income due to retirement or another life changing event. So let's let's go into this article here and see what they talk about. And I just want to review this with you. Um, because you can a lot of federal employees know you can keep your fhlbb in retirement. And once you turn 65, you automatically get Medicare whether you're working or not. You get Medicare Part A, and you have a choice whether you're going to take part B or not. And the problem with part B is there's another premium for that. Part A you've been paying out of your your paycheck the entire time. So you automatically get that at age 65. Part B is an additional premium. Right now it's $185 a month for federal employees or no, I shouldn't say for federal employees, for anybody taking part B, but if you were to get part B and you made too much money, that premium can be significantly higher. And it says here, how do they determine your income for that higher premium? It's based on your tax return from two years ago. Well, if you're a retiree and your income just dropped, it's not really reflecting what your income level currently is.

Speaker1:
And this can cause a problem because if you need part B, let's say you're in a condition health wise where you need this extra health insurance coverage. So not just part A and your Fhlbb you want Medicare Part B, you might be forced to pay these higher premiums. So really we're looking at I'm going to scroll through here. Um, your income level comes from three sources. And we've done this before talking about your retirement income sources. But you have your Fers or CSRS pension. And then you've got Social Security and your TSP is those three retirement income sources. But part B premium, as we said, are based upon your modified adjusted gross income from two years ago. So once you retire like, yeah, my income is less, but they're going to base that premium on two years prior. And that can be a drastic increase which can cause that increased premium. So understanding what that is and how those premiums are calculated. If you're above a certain threshold, it can be significantly higher. As I mentioned, that federal employee that I was talking about, uh, he's going to see a four times increase in that premium for part B if he chose to elect that. Now, we did a previous episode on Irma and talking about those things. So please go back and watch that content for more details on how those, uh, increases are calculated based on whether you're single or married jointly and what those thresholds are, just so we don't have to cover it all today.

Speaker1:
You can go back and watch that previous episode and come back. But there is a way. There is a way. And I'm looking here at the article here. Unfortunately, electing to retire does not automatically trigger notifications to all necessary government entities about changes in income or adjustments in Medicare obligations. The thought or though it may be a simple process, it's one that is manual. And there's a form SSA 44. And if your income has dropped due to a life changing event such as retirement, you may be eligible to repeal and request a reduction of those Medicare Part B premiums if you appeal those. It's not a guarantee that you're going to get approved for that. But understand that if you are going to be subject to these higher premiums and your income is drastically reduced in retirement, I don't believe that, to be fair. Again, I don't make the final decision. I'm just using logic here. I don't think that's that's fair in general. I'm not a big fan of the the Irma increase to begin with, but I don't think it's fair that you should be calculated based on your income two years ago. But that being said, if your income is drastically reduced, you can appeal it using that SSA form 44. Now, what is determining in your income here might be like, well, what all counts towards my my income for this this Irma calculation.

Speaker1:
Right. Well I said it's modified adjusted gross income. And this is your wages talks about self-employment income, interest, dividends RMDs, TSP withdrawals Trials and other pensions. Your Social Security benefits can count towards that too. So here are some of the thresholds that we talked about. I'm going to flash them up briefly, but if you are retiring and you're going to be in a lower bracket for this, but based on two years ago, you're in a higher bracket, this could affect what's going to be coming out, right, or how much you're going to have to pay for part B if you want to elect it. So again, this SSA 44 is the way that you can appeal this Irma increase. And it allows you to do so if you've experienced one of the following life changing events and retiring. Retirement or reduction in work hours is the part that we're talking about here. Probably going to be the most common for a retiree is retirement being that life changing event. But marriage or divorce, death of a spouse, loss of an income producing property, loss of pension income and employer settlement payment. But for federal employees, again, the most common bullet point here is going to be retirement, being that life changing event where you could appeal this. Now this is awesome to talk about just because I am just learning this. Like I said, I'm not the expert in all things.

Speaker1:
Certainly not the social security expert as I am with federal benefits, but Social Security, there's a lot of different nuances, strategy and things like that. And I know enough to be dangerous. But not knowing this and learning something from this article here on Fred Smith was a benefit to me, and I want to share that with you all so that you can benefit from it as well. And it may not be for everybody, but for somebody listening that's saying, hey, you know what? I thought I was going to be affected by Irma and it was going to affect my decision of whether or not to elect Medicare Part B. This can be something to look into if you've experienced that drastic income reduction due to retirement. So I just wanted to highlight this article here for you and share with you an opportunity that we can utilize in order to or an option that you can utilize in order to reduce the stress of making that decision. With part B, reduce the amount of money that you're going to be paying for part B, and hopefully keep more in your pocket, because the part B benefits are exactly the same. Whether you're paying a 400 plus dollars or paying the minimum of of $185 a month, the benefits are the same. So why pay more for it if you don't have to? And this form, this SSA 44 form, could be a way in which you can lower that.

Speaker1:
Now it's not a guarantee. Again, there's a there's an approval process, but it's worth looking into if you feel like you qualify. So hopefully you found that today's review of this article beneficial. I know it is a great compliment to the conversation that I had with the federal employee recently about the decision to take part B or not. It was this was the big factor was the price that it was going to cost for part B, if you do have questions on an individual basis, similar to the conversation I had reach out to us. You can email us directly. You can go to our website, Federal Retirement Show.com. Fill out the form and we'll make sure that if it's not me personally, one of our reps across the country is scheduling some time to dive in deeper and review your benefits with you. That is what we're here for. Again, hopefully if you like this, you can be notified when new content is coming out. Uh, subscribe to get all the episodes possible and share it with some colleagues if you feel it's beneficial for you. Don't keep us a secret. Share us. Share this information with your federal employee colleagues. We want to help them as well. So I really appreciate you taking the time out of your schedule to join us today. Hopefully, again, you found this information valuable and look forward to seeing you on a future episode.

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