Not knowing Medicare rules costs Americans millions

Toni:

In 2019, we sold our house to move into a senior community. Now, both of our Part B premiums have increased drastically in 2021 from around $145 a month to over $475 for Part B and an additional increase for Part D to over $70.  We still are receiving the same Social Security check and I really don’t understand where this change came from.  

Could you please explain what has happened?  

Thank you, 

Meredith from Nashville

Meredith:

In the past few weeks when clients are meeting with us at the Toni Says® office, we are seeing those on Medicare not understand Medicare rules which are not clearly explained in the Medicare and You handbook. 

Below are a few examples of how Americans are paying more for Medicare Part B and Part D premiums:

1. Part B and D monthly premiums are based on what income amount was reported on your last filed tax return: Meredith, your current question about why your Part B and D premiums increased even though your Social Security checks remained the same tells me that your income two years was raised from the year before due to selling your house.  

When your Part B premium was the average premium of $144.60 for 2020, your income on your joint tax return was $176,000 or less.  The amounts you gave of over $475 for Part B and over $70 for Part D tells me that your income on your 2019 joint tax return was over $330,000 and this increase could have been from selling your house.  

Americans need to know that in 2021 when your income increases about the threshold of $88,001 as an individual or $176,001 as a couple, then both your Parts B and D premiums will be increased to their limits.

2. Should one enroll in Medicare Part B when either you or your spouse is “still” working with employer health coverage?  Everyone should discuss enrolling in Part B with their company’s HR or benefits administrator to find out how their group health coverage coordinates with Medicare.  

It may be to your or your spouse’s advantage to delay Medicare Part B.  

The Medicare & You handbook states, “You can sign up for Part B without paying a penalty anytime you have health coverage based on your or your spouse’s current employment.” Once employment or health coverage based on employment ends, then one can receive a SEP (special enrollment period) and have an 8-month period to enroll in Part B without receiving a Part B penalty. Don’t wait too long to enroll. 

3. Always have each employer’s HR sign Social Security form “Request for Employer Information” when there is an employment change past turning 65? 

Kathy consulted a Toni Says agent regarding enrolling in Part B when she was retiring from her current employment only to discover that she never had her other two other companies that she had worked for after turning 65 sign Social Security form CMS L-564. 

Because Kathy is now 69 and only one employer signed CMS L-564. Her Part B penalty from not having the other 2 companies sign off, will be 68 minus 65 which is three (full12 month periods) times 10 percent or 30 percent.  Not for one month, but for as long as she is enrolled in Medicare Part B. 

Knowing Medicare’s confusing rules can help millions of stressed Americans spending millions in needless penalties. Have a Medicare question, email Toni at info@tonisays.com?

Toni King, Medicare author/advocate is giving a $5 discount to the Toni Says® readers on the new 2021Medicare Survival Guide® Advanced book at www.tonisays.com or call 888-TONI-SAY (888-866-4729) and talk with the Toni Says® Medicare team.