Monday, February 8, 2021

Part D

 What's Part D? Is it required?

Part D is drug coverage. Private insurance companies contract with the Federal government I order to offer Part D to the public. Like advantage plans, the premium and benefits are based on a local service area. This might mean a carrier could offer different Part D plans in different counties or states. Also, this is explains why the premiums vary from one service area to the next.

Part D coverage covers prescriptions written by Medicare approved doctors filled at standard pharmacies. This means Cannabis dispensaries, VA, Canadian or international pharmacies, or even maybe the "pharmacy" at your doctors office, which might be a small vending machine safe at the nurse's station, are not covered. Some medicines at the doctors office are covered by Part B, but that will be discussed in a different post.

Part D plans come in HMOs and PPOs. HMOs will have lower premiums and copays, but only certain pharmacies will accept them. This means if you are traveling the country in RV, either bring a 90 day supply or stick with a national chain like CVS or Walgreens. 

All Part D plans offer some kind of mail order and this will almost always be the best deal. Even insulins or other fragile medications are sent my mail. The prescriptions are almost always filled at a regional facility closest to your home and will arrive in 2 days or next day. 

Part D plans vary in monthly premium from $30 to $120. At the end of the day, our-of-pocket drug spend is very similar no matter what plan you get and all plans have to carry the same drug classes so the real difference is how you pay and what brands are covered. For example, a plan with a high premium will have little to no deductible and small to no copays, but you pay in the form of a high premium that might be over $1000/year. On the other hand, a plan with a small monthly premium would have a high deductible and copays, maybe $450 deductible and $10-$50 copay. So the premium is only $360 a year but your out of pocket with deductible could easily be $640, making it no cheaper than the higher premium plan. 

Part D plans have coverage tiers and levels of generic and brand names but I will have to discuss this details another time. Thanks for reading and please follow.

Sunday, February 7, 2021

IRMAA & MAGI

What are they? Are different acronyms for the same thing?

IRMAA (pronounced Irma) stands for Income Related Monthly Adjustment Amount. This is what can increase the monthly premium of Part B from $148.50 to a max of $504.90.

MAGI (pronounced Maggie) stands for Modified Adjusted Gross Income. This is a reference that even the tax free income that doesn't impact your AGI will be used to calculate whether you have an IRMAA or not.

Think of them as ugly sister tax collectors who will come to crash your party. There are many of them and people affected are said to "have an Irma or a Maggie." If you see Maggie, Irma will follow. Sometimes Irma comes to the party alone. They are the reason a lot of people refuse or can't afford Part B.

Here is the IRMAA table for 2021 from Medicare.gov. The first column lists MAGI... if you had tax-free income (municipal bond interest, foreign income, IRA contributions, 100% not 85% Social Security Income, etc), you can't count on your AGI to find your place. Make sure to check with a tax advisor and do your research. 

who file 

individual tax returns with income:

Beneficiaries who file

joint tax returns with income:

Income-related monthly adjustment amount

Total monthly premium amount

Less than or equal to $88,000

Less than or equal to $176,000

$0.00

$148.50

Greater than $88,000 and less than or equal to $111,000

Greater than $176,000 and less than or equal to $222,000

59.40

207.90

Greater than $111,000 and less than or equal to $138,000

Greater than $222,000 and less than or equal to $276,000

148.50

297.00

Greater than  $138,000 and less than or equal to $165,000

Greater than $276,000 and less than or equal to $330,000

237.60

386.10

Greater than $165,000 and less than $500,000

Greater than $330,000 and less than $750,000

326.70

475.20

Greater than or equal to $500,000

Greater than or equal to $750,000

356.40

504.90

Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows: 

Beneficiaries who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses:

Income-related monthly adjustment amount

Total monthly premium amount

Less than or equal to $88,000

$0.00

$148.50

Greater than $88,000 and less than $412,000 

326.70

475.20

Greater than or equal to $412,000

356.40

504.90




Usually shows up when first retiring and your two previous years of tax returns were higher incomes. If you have an IRMAA because you had usually high income compared to your current tax return (and most of the tax returns in your life), you have a right to appeal IRMAA.

Part D

 What's Part D? Is it required? Part D is drug coverage. Private insurance companies contract with the Federal government I order to off...