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Ask the Expert: Is there any way to reverse Medicare surcharges?

Is it possible to reverse Medicare premium surcharges? My wife and I usually have adjusted gross income (AGI) between $100,000 and $120,000. But in 2019, we sold an investment property and had a large capital gain. As a result, we're paying more for Medicare Part B and Medicare Part D this year. Our total surcharges add up to about $9,500 — a significant hit to our 2021 spendable income. Our 2020 income was the same as our pre-2019 income.

You can file a Request for Reconsideration of the surcharges; but don't get your hopes up. Annual Medicare surcharges typically are waived because of one of seven "life-changing events," such as divorce, the death of a spouse, and the loss of a job. Onetime events like the sale of a house aren't on that list.

Medicare premiums are determined by the income you reported two years earlier. In 2021, the standard Part B monthly premium is $148.50. (Part D premiums depend on the prescription drug policy you choose.) But single taxpayers with 2019 MAGI above $88,000, and married taxpayers filing jointly with 2019 MAGI above $176,000 are paying more.

The 2021 surcharge amounts depend on your income — and they can be steep. The 2021 surcharges can increase a married couple’s total yearly Part B premiums by between $1,426 and $8,554; and they can add between $295 a year and $1,850 a year to a couple’s total Part D premiums.

The good news is that because your 2022 Medicare premiums will be based on your lower 2020 income, your surcharges should automatically disappear next year.

The bottom line

You can apply for a waiver of Medicare premium surcharges if your income has fallen because of life-changing events including marriage, divorce, death of a spouse, and loss of a job.

More information

bit.ly/MedicareResourceIRMAA

TO ASK THE EXPERT Send questions to act2@newsday.com. Include your name, address and phone numbers. Questions can be answered only in this column. Advice is offered as general guidance. Check with your own consultants for your specific needs.

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