10 ways to avoid paying higher Medicare premiums
Robert Powell Special to USA TODAY
published December 22, 2019 -updated January 3, 2020
“The higher your taxable income, the more likely it is you’ll pay Medicare Parts B and D surcharges,” says Katy Votava, president of Goodcare, a firm that helps people plan for and manage health care costs in retirement and author of “Making the Most of Medicare: A Guide for Baby Boomers.”
You likely don’t have to worry about paying more than the base or standard rate for your Medicare Part B and Part D premiums in 2020.
But if you’re a single taxpayer and had modified adjusted gross income (MAGI) in 2018 of more than $87,000, or if you’re a married couple and made more than $174,000 that year, you’ll pay the standard premium amount ($144.60 in 2020) plus an extra charge added to your premium: the Income Related Monthly Adjustment Amount (IRMAA). Medicare uses your MAGI from two years earlier to determine if you’ll pay that extra charge in 2020.
“I hear of so many people who are caught by surprise by the IRMAA,” says Elaine Floyd, director of retirement and life planning at Horsesmouth. “This is really an essential part of tax and retirement planning because it can add thousands of dollars to a person’s or couple’s annual Medicare premiums.” read more