Seven Ways You Can Avoid Higher Medicare Premiums

If the SSA decides you will have to pay a higher premium, the agency will send you a letter telling you how the surcharge was calculated, what to do if you believe the information used to calculate the premium adjustment is incorrect and what to do if your income has been reduced or you’ve had what the government calls a “life-changing event.”

To discuss your case, you can visit an SSA office or call the SSA toll-free number (800-772-1213). To request that your payment adjustment be reconsidered, you’ll need to file a Medicare IRMAA LIfe-Changing Event form (Form SSA-44).  

Here are the seven life-changing events that can exempt you from the premium surcharges:

1. Death of a spouse, which significantly reduced your income. 

The SSA will need proof of the death and an estimate of your new income.

2. Marriage.

The SSA will need proof that you got married and an estimate of your joint income. For example, you may have had to pay a surcharge based on your individual income, but you might no longer face a higher premium if you got married and your joint income doesn’t exceed the high-income threshold for joint filers.

3. Divorce or annulment.

The SSA will need proof of your change in marital status, as well as an estimate of your reduced income.

4. Work reduction.

Some examples of this are if you partially retired or changed from full-time to part-time employment. Documentation can include an employer statement, pay stubs showing a change in hours, corporate minutes, record of a business transfer or your statement that your hours have been reduced. 

5. Work stoppage.

Some examples of this would be if you retired or were laid off or your business or corporation was sold. The SSA says proof of such changes include an employer statement, a retirement letter, corporate minutes, record of a business transfer or sale or a statement from you regarding your work stoppage.

6. Loss of income from property for reasons beyond your control.

Such as a natural disaster, arson or theft. Income-producing property can include real property (such as rental homes or farmland), crops, livestock and vehicles used for business.

7. Loss or reduction of certain kinds of pension income. 

The SSA has very specific requirements for this one: The pension must be a traditional defined benefit pension or a Cash Balance plan. And the loss of income must be as a result of a plan failure or termination or because the pension stopped based on a decision you made in the past — for example, if you took a 20-year annuity rather than a lifetime pension when you retired 20 years ago and that has paid out. The SSA will generally require a letter from the pension plan administrator and possibly a copy of the plan description.

You can also try to make the case that Social Security used outdated or incorrect information when calculating your surcharge. For example, you filed an amended tax return for the year the SSA is using to make an IRMAA decision, or the IRS supplied the SSA with an older tax return and you want to use a more recent one that will show you receive a lower income than reported.

If your exemption request is rejected, you can ask the SSA to reconsider. If you disagree with the reconsideration decision, the next step is to ask for a hearing. Hearings are held before an administrative law judge in the Department of Health and Human Services’ Office of Medicare Hearings and Appeals. Learn more from this SSA publication.

Because these income surcharges are calculated every year, your status can change if your income goes up or down. For example, you could pay the surcharge for just one year if your income temporarily bumps you into high-income territory. That could include having capital gains from stock sales, doing a Roth IRA conversion or getting a profit from a property sale — none of which qualify as IRMAA exceptions.

Jacqueline Salmon is a former Washington Post writer and editor and co-author of the books Playground Politics and The Four-Thirds Solution: Solving the Child-Care Crisis.