Medicare can be confusing and lead to unexpected costs. This is especially true if you’re not informed on the front end when you first become eligible for Medicare; or, if you delay enrollment, when you enroll that first time. The three most common surprise-cost culprits sprung on those new to Medicare include:
1.) Medicare Income-Related Monthly Adjustment Amount (IRMAA)
- IRMAA is an amount you may pay in addition to your Part B and/or Part D premium if your income is above a certain level. We wrote about IRMAA in this recent post 2020 Medicare Part B Monthly Premium and Income-Related Monthly Adjustment Amounts
2.) Part B late enrollment penalty (LEP)
- For each 12-month period you delay enrollment in Medicare Part B, you may have to pay a 10% Part B premium penalty, UNLESS you have other credible coverage that is compliant with Medicare rules (such as insurance based on your or your spouse’s job-based insurance).
3.) Part D late enrollment penalty (LEP)
- For each month you delay enrollment in Medicare Part D (Prescription Drug Plan), you may to pay a Part D late enrollment penalty unless you have creditable coverage that is as good or better than the basic Part D benefit or get “extra help” (Low Income Subsidy).
The good news, if you want to call it that, is if you get dinged for income adjustments or penalties – Yes, you can appeal.
In cases of IRMAA adjustments you can request a new initial determination right out of the chute if you have experienced a life-changing event that caused an income decrease, or if you think the income information Social Security used in making the initial determination is incorrect. If you don’t agree, you can also file for reconsideration or file an appeal.
You can also appeal your Part B and/or your Part D Late Enrollment Penalties (LEP) though the processes for doing so are different for Part B and Part D.
For Part B LEP, just follow the instructions on the notice that you received informing you of the penalty. You will need to prove that you were enrolled either in Part B or in coverage through current employment during the period of time for which you are being penalized.
For Part D LEP, you can appeal the penalty if you think you were continuously covered or if you think the amount of the penalty was calculated incorrectly. This appeal must be filed with Medicare’s contractor (MAXIMUS Federal Services) for handling appeals.
For more information on adjustments, penalties and how to file an appeal refer to this month’s Medicare Minute Newsletter courtesy of The Medicare Rights Center.
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