Medicare is a confusing topic to navigate, in part because there are so many choices. In the first part of this series, I will discuss the various parts of Medicare. Next week I will discuss the cost of putting these pieces together.  

There are 5 pieces to Medicare…

IRMAA stands for Income-Related Monthly Adjusted Amount. It is an increase to the standard Medicare Part B and Part D monthly premiums that Medicare recipients have to pay each month if they make over a certain amount.

For 2023, the standard Part B premium is $164.90/month and Part D is $0 (plus your plan premium). Depending on your income, your Part B premiums can go up to $560/month and Part D can go up to $76/month…

Retiring before 65 when Medicare begins can bring significant healthcare costs as early retirees are forced to find private healthcare plans.  

When considering premiums and out-of-pocket health care expenses, $1,000/month per person is typically a good estimate, although it varies by the type of plan selected…

When retirees turn 65, they typically sign up for Medicare unless they are covered by a federal or state government health care plan. However, if you are still working when you or a spouse turns 65, that becomes a bit trickier…

Social Security mails a letter in November that tells you if you are subject to higher premiums - otherwise known as “IRMAA” or Income-Related Monthly Adjustment Amount. The cost is based on your income from two years prior. For 2022, you would have received a letter in November 2021 telling you your premiums based on your 2020 income.

This is the extent of the information that Social Security uses to determine how much you will pay. They don’t know anything about what has changed since 2020 or why 2020 was possibly an abnormal year for you. Because of this, it is your job to appeal if you feel the premiums don’t accurately reflect your income…