Medicare Premium Surcharges OUCH

If there is anything evil in the rules and taxes regarding elderly issues, it seems that Congress will find a way to make it worse.

My first and highest pet peeve involves taxability of Social Security benefits.  When President Roosevelt pushed Social Security, he promised the benefits would NEVER be taxed.  Another Democrat by the name of Billy Clinton came along and made his fellow Democrat into a liar.  In the late 1990s, the current rules for computing taxability of Social Security benefits were enacted.  With no real adjustments for inflation!  Back in 1990, the average income of a retiree was about $40,000.  Today, that has jumped to almost $80,000 to provide the same standard of living!  Now, almost everybody’s Social Security benefits are taxed, whereas in 1990, only a small number “enjoyed” that “privilege.”   The formula basically causes a retired person to pay tax on two dollars of every one dollar of increased income.  I don’t know about you, but I believe that to be just plain EVIL!!!

Another pet peeve involves Medicare Part B insurance premiums.  They are based once again on income.  That is pure socialism!  How does that old Communist slogan go?  “From each according to his ability to each according to his need.”  That is NOT the American way.  Fairness across the board should be the rule.  Everybody should pay the same price for stuff.  But in this case, there is NO fairness.

Currently, if you are Single and earn $91,000 or less, your Medicare Part B premium is $170.10 per month.  But, if your income jumps up to between $114,000 and $91,000, your premium jumps to $238.10 a month.  If your income is between $142,000 and $114,000, the premium is $340.20 a month.  This progressive rate structure goes all the way to $500,000, where the premium is $578.30 a month.

Medicare looks at your prior year filed tax return to determine your current year premium.  So what happens when you have a once in a multi-year period event such as converting an IRA to a ROTH IRA?  Or you sold a rental and cashed out.  Perhaps you got a big bonus from your employer.  Maybe you inherited an IRA and took the entire distribution over a short time.  All of these events could push you into the highest Medicare Premiums for the next tax year.  The way I see it, that is just plain EVIL!  To base medical insurance premiums on your income, and even worse one-time events, is NOT the American way.

So what can you do if you’ve become a victim of this?  You can request a review.  Fill out form SSA-44 and submit it to the Social Security folks.  You can do this by going to www.ssa.gov.  You may need to include documentation to prove your point.  Letters from outsider providers can help.  If Social Security denies your application, you have the right to request a hearing before an Office of Medicare Hearings and Appeals.  There is even another level above that… the Medicare Appeals Council.  Finally, if you have the money and time, you can go to Federal Appeals court.

Oh how I wish enough folks would rise up and force Congress to fix these two EVIL issues.

Have you heard?  Esther 8:6a says, “For how can I endure to see the evil that would come to my people?”

Kelly Bullis is a Certified Public Accountant in Carson City.  Contact him at 882-4459.  On the web at BullisAndCo.com  Also on Facebook.