Follow
Share

Retired in 2012. Forced retirement with a 20,000 bonus for taking it. Put my AGI for 2012 higher on income limits. Filed a request for exception. Got it. On THAT form it asked for your proposed income would be for the next year. I put 30,000. Well I sold my rental, needing money for bills etc. That sale in 2013 put my AGI TO 218,000. When Medicare saw that in December of 2014 they had started taking out additional premium amts but also said I owed an additional 1200.00 which they promptly took out of my Janusry check leaving me with just 509.00 to live n for the month. In addition they are now taking out the maximum premium amouts for both B and the RX PLAN. so, in addition to my supplemental plan I'm laying out 335.00 a month. I've applied twice and have been denied. I had my 2014 taxes done and my AGI was 24,000. They've told me NOT to bother trying again. I'm trying to get up enough steam to give it another try as this will mean they've taken out over 4000.00 for medicare this year on a probably AGI again of only 24,000. I feel like I've hit a wall, I'm discouraged, scared, I'm 76 years old and to be going thru this at this time if my life just upsets me beyond belief. Any ideas out there?

This question has been closed for answers. Ask a New Question.

21 Answers

Most
Helpful Newest
First Oldest
First
UPDATE!!!! Went in with my 2013(year of my sale) taxes, 2014 return. The SSA-44 I filled out had only 2013 and 2014 had only last year's money on the proposed line. Supposedly since I was using those to which shows the year after was lower I was told it should be approved. This, and I verified with the person there, means if you get that form filled out ASAP after the following year you will only pay the higher medicare premium for the year following the event year. Ex: happened in 2013, paid higher premium in 2014 and in Jan. Of 2015 get your rear end in there with 2014 tax info and fill out form SSA-44. You'll get back all you paid for 2015, if any. Now I'm not approved yet so we'll see if this pans out. Now know I still think this is wrong for us in our category and I WILL be continuing this with my Senator to get us added to the exempt folks. This would mean no following year premium. Hope this made sense. Will not know Nything for about 4-6 weeks. Will post an update then. Sorry for any weird words as these tiny keys kill me!
Helpful Answer (0)
Report
Well here I am at social Security again with ALL my paper work. I'm already upset waiting for my number to come up #95. Asked for a private interview room as I'm emotionally upset already. The more I read the more I realized this is wrong the way it's written today I'm challenging section 5 where it talks about 'if there is a change in income, lowering come in with paper work etc. However it's referring to those who were already accepted leaving all of us with one time increases out. Will report results. My concern SSI folks no nothing about Medicare😞
Helpful Answer (0)
Report
Absolutely right, FF. If one has an on-going high income, they would have no problem paying the higher premiums. It's the fact that one year of increased income can result in three years of higher premiums that is unfair.

Renee, I apologize for the gender mistake. I thought that a male pronoun had been used earlier, and I picked up on that. Males certainly have no monopoly on frustration when it comes to tax and insurance matters!

I have a couple of other thoughts about your situation that I will post to your profile in a private message. Hopefully you know how to access that.
Helpful Answer (0)
Report
Sounds like this isn't fair for the small investor of real estate or stocks, if one's Medicare cost go up depending on one's income. For the Donald Trumps of the world, they wouldn't bat an eye lash.
Helpful Answer (0)
Report
just saw your recent post. . FYI . The job I retired from in 2012 at age 72, was a part time job. I really retired in 1992 and have a small pension for my 30 years with the Telephone company. SO, in reality, I have the two incomes. When I sold my income property it was because I coulldnt afford all the extras that would need doing and it was in a different city. Just to hard to deal with after finally, really retiring. Now that looks like a nice monthly income but what I did was refinance the home I live in, paying down on my mortgage so to have a lower mortgage payment. Plus, as you pointed out, I had a 90,000 mortgage on the place I sold. A well thought out plan until my medicare issue. I now live on 2 acres, have a permanent home for rescued donkeys and currently 1 horse. So my monthly income, though good, is very very tight. Oh health insurance. I have a supplemental policy which is an advantage plan. So RX and health care are together for 77.00 a month. So normal was, 104.00 plus the 77.00. So this business now really hurts. They the animals eat and I do a lot of soup! I can't imagine what people who make less do, in a similar situation. I would rather die than give up what I'm doing and living, now retired. This IS my life that I love and it isn't much, but this issue threatens my life. This is not something one wants to have to deal with at 76. The sun is slowly setting here.
Helpful Answer (0)
Report
Thank you akdaughter! Finally someone sees the full picture. You are right on my issue. Now that we are here... YEP upset about me BUT I'll luve. My irritating thing is the unfairness of the law. Knowing my 2014 tax return would have a much lower AGI, one would figure that if I brought in my tax return showing exactly the reduced AGIyou would think with that information substantiated Medicare would stop taking out the additional in 2015. They're going to do it in December with the same info. Why can't they do it now and stop the additional premium. Keep the 2014 money paid but just leave the 2015 alone. Give me back what I've paid In 2015 and I'm back to normal in 2015. That's where I'm at for me. Now as I've said before, what will it take for someone to LOOK at the 2012 change and add to include this type of situation to the existing regulations with the other exceptions. A person would have to complete the appropriate form, documentation and financial relief would be given. The law is a good one its just I don't think they considered the ramifications of people like me and this particular situation. Simple and clear. My understanding of the two year thing is that Medicare works two years behind. I think when proof is given you should be able to reverse the payment back to normal. I've written to my Senator and they've asked for my taxes, the denial and pretty much everything I've done since this all started with my Dec. 1, 2014 letter stating the 'plan'. That's all I'm REALLY asking for here. This is more than a personal matter its righting a wrong or just an oversight when the new part was drawn up. THATS the REAL wall/frustration I'm feeling. So many people I've heard from have just let this go unchallenged. I just can't do that. I'll still be fighting for change next year on this issue. I'm 76, never married, and a woman so sorry if my frustration led you to believe I was a gentleman. 😊 thanks for seeing the big picture it helps. I'd like to see that more folks would post there story, similar to mine, I know you did. Then we could discuss from a common starting point and maybe force some change. I'm going back in to Social Security next week with a new request, giving my 2014 true income now, with documentation. I was told by someone there that it probably wouldn't do any good but I've got to try. I'm also hoping my senator can get someone to look at the issue as the regulation now stands.
Helpful Answer (0)
Report
Here are the numbers that probably apply for Renee: I am assuming that he is single. His Medicare Part B premium will be $335.70, Medicare Part D will be $70.80 plus his regular premium, which I will conservatively estimate at $30 (it depends on the plan he selects), and I will estimate his Medicare supplement policy at $200 at his age. The total is $636.50 per month, more than FF was paying before Medicare. FF was working and I presume earning an income while paying this premium, Renee is retired and living on SS income of $24,000. That is a pretty big chunk of his income. I wonder what coverage would be available to him and at what rate if he was under 65 and got coverage under the ACA. I think an income of $24,000 would have qualified him for a pretty hefty subsidy. Under the ACA you estimate what your income will be for the year and premiums are set accordingly. If you were wrong, you "settle up" when you file your taxes for that year. I wonder why Medicare couldn't use the same system.
Helpful Answer (0)
Report
I found the 2015 chart. You are right, amounts depend on income. Scroll down to the chart. www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html

All in all, I remember back when I was an independent contractor paying $575 per month for health insurance just for myself, with no health issues, plus $2,500 deductible. Thus, when I was eligible for Medicare it has been a delight wallet wise for me.
Helpful Answer (1)
Report
I am not a tax accountant, but I think that some of the respondents here do not understand the situation. First of all, Renee sold a rental property, which does not qualify for any sort of capital gains exclusion. Secondly, just because the sale showed a profit on paper, that does not mean that Renee pocketed a huge sum of money. This property could have been fully depreciated and could have been subject to depreciation recapture when it came time to pay the taxes. There might have been a mortgage on the property, which would have needed to be paid with the sale proceeds in order to provide clear title to the buyer. For example, there could have been a taxable gain of $200,000 on a sale of $250,000, and if there was a loan balance of $190,000, by the time selling expenses, the mortgage balance and capital gains taxes were paid, the seller could end up with nothing. Of course, the seller had gotten the advantage of the depreciation claimed in prior years, but that doesn't help him now. There is a difference between income on paper and income in your pocket.

I think that Renee feels that it is unfair for Medicare to charge him a higher premium based on a "paper profit". I don't necessarily agree with his position for the year of the sale, however I agree that it is unfair to be charged a higher premium for three years, based on an increased income in one year. Unfortunately, this is how it is done. If I understand his post correctly, he was charged a higher premium retroactively for the year of the sale, and then for two more years because the premiums are based on tax return numbers that are at least two years old. Anyone who is nearing Medicare eligibility should be aware that your premiums will be based on income at least two years prior to your 65th birthday, and if you are still working with an upper middle class income, will be higher for at least two years after you retire and your income drops. Renee is correct that many people are not aware of this recent change in the law.
Helpful Answer (0)
Report
I was thinking that Renee had to pay $28,000 in capital gains tax on his rental property investment that means he made a huge profit on the sale of that rental. That profit should more than make up what extra he needs to pay for Medicare.
Helpful Answer (1)
Report
If you have a gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income. You may qualify to exclude up to $500,000 of that gain if you file a joint return with your spouse. Publication 523, Selling Your Home, provides rules and worksheets. Topic 409 covers general capital gain and loss information.
See a tax consultant about filing an amended 2014 tax return.
Helpful Answer (1)
Report
Sorry. I pay my taxes and the Federal Government got 28,000 from the sale of my property. Plus what I paid the state. If I was working or had a lot of investments, whatever and made a lot of money EVERY year I would expect to pay a higher premium. Also, there is no way to 'prepare' for an event like this. I had no idea that there would be an issue with the Medicare premium and for your information this change to the existing regulations was just made in 2012. I put this up on my FB page and I cannot begin to tell you how many people were NOT aware of this. So, how can you 'prepare' for something you are totally in the dark about. Prepare, yes for the Capitol Gain and taxes I 'prepared'. Secrets, on the other hand are a bit hard to 'prepare' for. Food stamps? I wouldn't, nor do I qualify for food stamps. I worked all my life for what I have. I was never rich, but was able to prepare for retirement in a manner of speaking. I have never had to take handouts and don't plan to start now. Will I get through this yes! But THAT DOES NOT make this fair!!
Helpful Answer (0)
Report
It doesn't feel fair, but these situations need to be anticipated. There is probably nothing anyone can do in this situation--if you wanted to try to get food stamps maybe you could qualify for that, I don't know. But anyone who experiences a temporary windfall, has the same "problem", and feels it is not "fair" but how else would the governments collect their taxes and Medicare premiums? If they did it on a twice a year calendar with everyone filing their taxes that often, it would increase the IRS and Medicare administration costs immensely. I hope someone else here on Aging Care has a solution, but I don't know of any. Actually I am a bit jealous of your (temporary) income increase, would love to have that opportunity to do some needed expenses. But I wouldn't be surprised at the tax increases.
Helpful Answer (1)
Report
I understand the jump in income. However how it's treated by medicare is not fair to ANYONE in this type of situation. It was a one time event that affected my 2013 taxes, actually the sale was in April of 2013. By the end if the year the was paid out, gone. No investment, no nothing. I paid off the existing mortgage, some updating that had to be done. The ONLY money left was the 60,000 I set aside in a CD to pay my taxes with. My capitol gain was 50,000. So, I guess you could say I made 10,000. My income for the next year, 2014 DROPPED to an AGI of 24,000. THATS what I lived on in 2014. I got my form notice in DECEMBER 2014 stating I had underpaid my medicare premium in 2014 and without even 30 days notice they took 1100.00 out of my 1500.00 Social Security Check.i was LEFT with 500.00 to live on in Januaru 2015. So, this is fair? I realize I'm not singled out this happens to anyone who sells off property after retiring. So, this makes it fair? Spare me. Now, they are continuing to take out 335.00 a month, plus I have my supplemental premium to pay. My income for 2015 will be the same. I'm on a fixed income. So I'm paying the maximum premium for two years on a AGI of 24,000? This is fair and right? So, out of my 24,000 AGI medicare is taking over 4000.00 a year. This IS WRONG and needs to be fixed! The change that did this was written in 2012. Why can't someone look at it, and include people with these one time hits? We should NOT be penalized for having to sell properties in order to simplify our lives out of necessity. It is wrong, period. We should have to file a request for the adjustment with the supporting documentation and not have to go through this nightmare! We are NOT RICH. We are not continuing on this higher income bracket. It does not make sense that we should be penalized for two years
Helpful Answer (0)
Report
Renee, yes, when you have a jump in your income, your Medicare premiums and taxes will be higher, but it is temporary. In 2016, if your income goes back to what it was before the temporary increase, then your premiums & taxes will go back down. This is the same treatment EVERYONE receives. Try not to take it personally---the math is the same---they are not targeting you, they are only looking at the numbers.
Helpful Answer (1)
Report
My question is, Why should we be responsible for the governments failure to be current? If you read Medicaire Premiums in the plan there are exemptions to the regulation. Divorce, death, catastrophic disaster and some others. My thing is, we who fall into this one time higher income bracket because of a one timefinancial gain should be included in the regulation, which went into affect in 2012. By the way. There's nothing wrong with the law, it just needs to be tweaked. We should be able to fill out the form for the one time relief, provide documentation and be done with it. Again in my situation, if I provide my taxes for 2014 and it shows I'm below the income bracket causing the increase in the previous year I should be able to go back to a 'normal' premium amount. Two years of being behind, one is no excuse for us to be penalized and two IF information is provided showing the lower amount that should trigger the change. None of this makes any sense, in what they are doing! We should be refunded the extra premium we've had to pay and very able to move on. To me it's very very simple unless I'm really missing something here. This is just driving he nuts as it is SO wrong.
Helpful Answer (1)
Report
My husband and I will be in the same situation when we become eligible for Medicare in 2016 at age 65. Our full retirement age is 66, so my husband will work at least until then. The Medicare Part B and Part D premiums are determined by your income two years prior. So for 2016, the premiums are based on 2014 income as reported on your tax return. I have been told that this is because the federal government is a year or more behind on updating records. If you get a statement from social security each year, you may have noticed that they are a year or two behind on recording your income. Although our income will drop drastically when my husband retires, we will pay the higher premiums for at least two more years. When I asked my accountant about an appeal, she told me that none of her clients has ever been successful in requesting an appeal. One would think that in this digital age the tax records would be more current.
Helpful Answer (1)
Report
They say I am in that bracket for two years regardless. I've brought in proof of income for 2014 and 2015 and was denied relief twice. They told me coming back with accurate 2014 tax info would be useless. I've got the form and when I feel stronger about it I'll take the new request in. They just kind of look at me with a blank stare. Say sorry your out of luck until the end of 2015!
Helpful Answer (0)
Report
II have Medicare and supplemental insurance that includes rx plan. This mess is just killing me. There's no one who can help me. SSI folks no nothing about Medicare. I'm being punished for 2 years for the sake of this property plus paid 50,000 in capital gain taxes. I'm going back into debt I'm just devastated over all this.
Helpful Answer (0)
Report
Renee, I think you mean "Medicaid", not "Medicare".

If you are in fact referring to Medicare, if you have higher income you’ll pay an additional premium amount for Medicare Part B and Medicare prescription drug coverage. This affect less than 5% of those on Medicare. Thus that tells me one would need to be in a high income bracket which from what you had written, you wouldn't be in that bracket. 2015 update www.ssa.gov/pubs/EN-05-10536.pdf
Helpful Answer (0)
Report
Are you on Medicare or Medicaid? And who gives you the Rx plan, because Medicare does not provide Rx coverage.
Medicaid is based on income, and if you got 218,000 for the house, your Medicaid ended, because now you have money to spend down. Once you get it down to only $2000, you can try again.
Helpful Answer (0)
Report
This question has been closed for answers. Ask a New Question.

Recent Questions


Popular Questions


Related Questions

Ask a Question
Subscribe to
Our Newsletter