How some people avoid IRMAA, the Medicare surcharge on premiums

Who are those people and how can they avoid paying the IRMAA surcharge assessed for Medicare beneficiaries whose 2022 modified adjusted gross incomes exceeded $103,000 ($206,000 for couples)?

They’re former workers for the federal government and sometimes ex-state government employees.

When the IRMAA surcharge doesn’t kick in

But their exemption isn’t really about a way for them to skate pass the IRMAA surcharge, which was enacted by Congress in 2003. They don’t owe it because they’ve chosen not to enroll in Medicare Part B due to continued coverage from the generous Federal Employees Health Benefits Program, the nation’s largest employer-sponsored group health insurance program. (Part B is for doctor bills, outpatient care, home health care, medical equipment and preventive services.)

“Our federal health benefit program started in 1960 and Medicare didn’t start until 1965, so we always had lifetime coverage as federal retirees,” explained Tammy Flanagan, principal of the Retire Federal consulting firm in Bradenton, Fla. “The majority of federal retirees still don’t have to take Medicare.”

Former federal employees can keep their federal health insurance after 65 for as long as they like if they had that coverage for at least the last five years of their career and were eligible for an immediate federal pension.

That pension plus Social Security can sometimes be enough to lead to an IRMAA surcharge for former federal workers in Medicare.

Roughly 20% to 25% of former federal workers eligible for Medicare don’t enroll in Medicare Part B and aren’t subject to a potential IRMAA surcharge, says Flanagan.

How…