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How will the income from the sale of my house affect my

Customer Question
How will the income...

How will the income from the sale of my house affect my Medicae payment. It will indicate a much higher "income" than is normal.

Accountant's Assistant: These retirement benefits are supposed to help us but they can be so complicated! The Retirement Expert will help you get the most benefits propertly. Please tell me more, so we can help you best.

I sold my house in November 2016 for a very good price. I am fearful that that will cause a spike in my monthly premium for Medicare. How do I avoid that?

Submitted: 11 months ago.Category: Social Security
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9/23/2017
Social Security Expert: SSA.Help4u.168, Accountant replied 11 months ago
SSA.Help4u.168
SSA.Help4u.168, Accountant
Category: Social Security
Satisfied Customers: 4,796
Experience: Tax Accountant
Verified

Hello. Thank you for choosing this Q&A service for assistance. My name is Angela. I will be assisting you.

Q: How will the income from the sale of my house affect my Medicae payment.

A: In brief, your medicare premiums for Part B and prescription drug coverage will increase. SEE BELOW:

--------------------------

Rules for higher-income beneficiaries

If you have higher income, the law requires an adjustment to your monthly Medicare Part B (medical insurance) and Medicare prescription drug coverage premiums. Higher-income beneficiaries pay higher premiums for Part B and prescription drug coverage. This affects less than 5 percent of people with Medicare, so most people don’t pay a higher premium.

How does this affect me?

If you have higher income, you’ll pay an additional premium amount for Medicare Part B and Medicare prescription drug coverage. We call the additional amount the income-related monthly adjustment amount. Here’s how it works: • Part B helps pay for your doctors’ services and outpatient care. It also covers other medical services, such as physical and occupational therapy, and some home health care. For most beneficiaries, the government pays a substantial portion — about 75 percent — of the Part B premium, and the beneficiary pays the remaining 25 percent. If you’re a higher-income beneficiary, you’ll pay a larger percentage of the total cost of Part B based on the income you report to the Internal Revenue Service (IRS). You’ll pay monthly Part B premiums equal to 35, 50, 65, or 80 percent of the total cost, depending on what you report to the IRS. • Medicare prescription drug coverage helps pay for your prescription drugs. For most beneficiaries, the government pays a major portion of the total costs for this coverage, and the beneficiary pays the rest. Prescription drug plan costs vary depending on the plan, and whether you get Extra Help with your portion of the Medicare prescription drug coverage costs.

REFERENCE SOURCE:

https://www.ssa.gov/pubs/EN-05-10536.pdf

Social Security Pamphlet titled Medicare Premiums: Rules for Higher-Income Beneficiaries.

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Social Security Expert: SSA.Help4u.168, Accountant replied 11 months ago

Info explaining how the increase is determined:

If you’re a higher-income beneficiary with Medicare prescription drug coverage, you’ll pay monthly premiums plus an additional amount, which is based on what you report to the IRS. Because individual plan premiums vary, the law specifies that the amount is determined using a base premium. We tie the additional amount you pay to the base beneficiary premium, not your own premium amount. If you’re a higher-income beneficiary, we deduct this amount from your monthly Social Security payments regardless of how you usually pay your monthly prescription plan premiums. If the amount is greater than your monthly payment from Social Security, or you don’t get monthly payments, you’ll get a separate bill from another federal agency, such as the Centers for Medicare & Medicaid Services or the Railroad Retirement Board.

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