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Medicare IRMAA Surcharges To Be Adjusted For Inflation In 2020
FYI: For the first time in a decade, the income brackets used to determine Medicare premium surcharges for high-income retirees will be indexed to inflation starting Jan. 1. As a result, some retirees may experience a reduction in their Medicare surcharge costs next year.
Just remember that these figures are all estimates, and don't rely on them too much.
The article states (correctly) that "As a result [of CPI-U going up by 1.7%], the income brackets used to determine Medicare surcharges in 2020 will increase by 1.7%, rounded to the nearest $1,000."
So what does that mean for the $170K start of IRMAA for couples? 1.7% of that is $2.89K, or $3K rounded to the nearest $1K. It seems that for 2020 the IRMAA start figure should now be $173K. But the article says $172K.
That's got its own problems. My guess is that what it did was take the IRMAA start vale for singles, $85K, compute the new value for 2020 of $86K, and double it for couples. If I read calculation rules correctly, one should compute the current value for couples by doubling that of singles (this is where the $170K comes from), then add 1.7% and round.
Comments
The article states (correctly) that "As a result [of CPI-U going up by 1.7%], the income brackets used to determine Medicare surcharges in 2020 will increase by 1.7%, rounded to the nearest $1,000."
So what does that mean for the $170K start of IRMAA for couples? 1.7% of that is $2.89K, or $3K rounded to the nearest $1K. It seems that for 2020 the IRMAA start figure should now be $173K. But the article says $172K.
Then there's the Finance Buff, which came up with $174K.
https://thefinancebuff.com/medicare-irmaa-income-brackets.html
Here's the whitepaper cited in the Investment News piece:
http://www.hvsfinancial.com/wp-content/uploads/2019/09/2019-HVS-Medicare-surcharges.pdf
That's got its own problems. My guess is that what it did was take the IRMAA start vale for singles, $85K, compute the new value for 2020 of $86K, and double it for couples. If I read calculation rules correctly, one should compute the current value for couples by doubling that of singles (this is where the $170K comes from), then add 1.7% and round.
Statute on how IRMAA is set: https://www.ssa.gov/OP_Home/ssact/title18/1839.htm#act-1839-i-1
While I'm inclined to prefer my own numbers, I would still wait for the official numbers to come out.