Talk of The Villages Florida - View Single Post - Medicare Advantage Plans A Failed Experiment?
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Old 06-18-2024, 12:18 PM
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Originally Posted by GoRedSox! View Post
I think we are essentially saying the same thing, because the most recent tax information that is provided by the IRS is typically two years prior.

IRMAA can be appealed if the change in income is due to a life-changing event, the most common of which is retirement. So if income has dropped precipitously due to retirement, an IRMAA appeal may be successful. But one-time events that spike income for one year, such as a capital gain or ROTH IRA conversion or large withdrawal from an IRA are really not appealable.

I probably disagree somewhat on IRMAA, but I don't disagree entirely. If someone converts to a Roth IRA, their entire IRA is recognized as income, but they may not have taken a penny of it. The IRMAA premium increase could be very difficult for them to afford. I hope that most folks 63 and older are aware of this when they decide on a Roth conversion. I also think that the threshold of $103,000 for an individual is too low. But if a retiree has an income of $300k or more, I am ok with higher premiums because the trust fund is going to stop being able to pay full benefits soon and it is for the greater good. If my wife and I had a joint income of $258k in retirement, we would each have to pay an extra $174.70 for premiums or about $700 total, instead of $350. I am ok with that but I know not everyone is. It is redistribution but that's what a progressive tax code is by definition.

Currently, 7% of Medicare beneficiaries pay some IRMAA surcharge.

As an aside, I think the most unfair tax in America is the tax on Social Security income. For the first 50 years of Social Security, benefits were not subject to the income tax. Reagan changed that, gradually increasing the age for full retirement benefits to 67, and taxing Social Security for the first time. But the thresholds were not indexed to inflation, and are the same today as they were over 40 years ago. In 1985, only 9% of Social Security recipients paid income tax on their benefits, today, it's approaching 60% if not more by now, and especially with inflation, more and more ordinary taxpayers are paying income taxes on up to 85% of their benefits.
I agree. And here is something more unfair: If you are self-employed, you pay 6.4 % SS tax up to whatever the current limit is, and 1.25% Medicare tax, no limit on income. But you pay DOUBLE that since you are your own employer, 15.3% off the top. But wait, there's more-----you pay income tax on that 15.3% that you never see!!!!!! Yes kiddies, that's right. Let's say you made 100,000. You pay 15,300 in FICA, then income tax on the full 100K. DOUBLE TAXATION!!!!! Robin Hood strikes again.