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If you’re a Medicare beneficiary with higher income, you may be subject to the Income-Related Monthly Adjustment Amount (IRMAA) for your Medicare Part B and Part D premiums. However, if your income has recently decreased due to qualifying life events, you may be eligible to appeal the IRMAA determination. Here’s what you need to know about how to appeal an IRMAA.

What is an IRMAA

The Medicare Income-Related Monthly Adjustment Amount (IRMAA) is an extra charge added to Medicare Part B and Part D premiums if the beneficiary’s income exceeds certain thresholds. The Social Security Administration (SSA) determines IRMAAs based on the tax return from two years prior. In other words, a 2025 IRMAA is based on 2023 income.

IRMAA brackets 2025

When you can appeal an IRMAA

Medicare beneficiaries may appeal an IRMAA redetermination if they experience a significant life-changing event that cause a reduction in income. Qualifying events include:

1. Marriage, divorce, or annulment
2. Death of a spouse
3. Retirement or reduction of working hours
4. Loss of a pension or settlement of an employers pension plan
5. Loss of income-producing property due to a disaster or other circumstance

Any of these situations may cause a decrease in income. This provides grounds for an appeal.

How to File an IRMAA Appeal

To file an appeal, beneficiaries must complete Form SSA-44, Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event. Here’s how to do it:

1. Download the Form – Obtain Form SSA-44 from the Social Security website or by at the local Social Security office.
2. Complete the Form – Provide details about the life-changing event, including supporting documentation (such as a marriage certificate, employer statements, or tax returns).
3. Submit the Form – Either mail or deliver the completed form and supporting documents to the local Social Security office.
4. Await a Decision – SSA will review the request and notify the beneficiary of the outcome. If they deny the appeal, the beneficiary may request a further review.

To Sum it up

If your income changes due to a qualifying event, don’t hesitate to appeal an IRMAA determination. Many beneficiaries successfully lower their Medicare premiums through this process. Be sure to gather all necessary documentation and submit the appeal as soon as possible to avoid overpaying.

For more details, visit the official Social Security Administration website or contact your local SSA office.

The 3 primary out-of-pocket costs to consider when you compare Medicare plans are; copays. coinsurance & deductibles. Medicare copays, coinsurance and deductibles all contribute to annual coverage costs for plan enrollees each year. These terms all describe the money beneficiaries pay towards health care services and prescription drugs when they have health insurance. 

Copays

A copay is a fixed amount of money beneficiaries pay for a specific service. They generally apply to: primary care provider visits, specialist visits, prescription drug refills (depending on the tier of the drug), and hospital services. Copays let the beneficiary know what they pay for each provider’s visit up front. Copays apply to most prescription drug plans, Medicare Advantage plans and some Medicare Supplement plans. Please keep in mind, sometimes there are other costs associated with a visit to a provider’s office.

Coinsurance

When a beneficiary and their health plan share the cost of approved medical services, that is coinsurance. Coinsurance payment amounts are based on a percentage of the cost. Beneficiaries enrolled in Original Medicare, will have to pay 20% of the cost for most services after they meet the annual deductible. After the enrollee meets the deductible, Original Medicare covers 80% of all approved costs.

Usually members of Medicare Advantage plans pay co-pays for medical visits instead of coinsurance. Although in many cases, MA/MAPD plan enrollees pay 20% coinsurance for Part B drugs (in-network).

Up until 2025, stand alone PDP plan enrollees could end up paying 25% coinsurance for drugs if they fell into the donut hole (coverage gap). The coverage gap was removed for 2025, therefore stand alone PDP enrollees do not pay coinsurance.

Click here to learn about the Part D prescription payment program

Deductibles

Deductibles are the amount plan enrollees pay out of pocket for most health care services before their plan starts to cover medical costs. The deductible does not apply to preventative services. Medicare plans cover preventative services at not cost to enrollees.

Once the deductible is met, enrollees are still required to pay copays and/or coinsurance costs.

There are 2 different deductibles for Original Medicare Part A & Part B, however many Medicare supplement plans cover the Part A deductible. There only 2 plans that cover the Part B deductible (Plan F & Plan C) neither plan is available to anyone who turns 65 after 1/1/2020.

Most MA/MAPD plans have separate deductibles; one for medical costs and one prescriptions. That means enrollees must meet their medical deductible before the plan pays for specific covered services. It also means enrollees must pay the deductible for prescriptions before the plan covers the cost of the medication. MA/MAPD enrollees still pay copays and coinsurance after they meet the deductible. Please note; each plan is different and deductible amounts are specified in a plan’s summary if benefits.

Watch a quick YouTube video on the $2,000 drug cap

Copays, coinsurance, and deductibles

Copays, coinsurance & deductibles are all factors to consider when discussing Medicare options. All these things contribute to the total cost of each plan a beneficiary chooses.

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Understanding Medicare Part D Costs in 2025

Medicare Part D, the part of Medicare that covers prescription drugs for millions of Americans, provides significant savings but comes with costs that beneficiaries need to plan for. Each year, adjustments are made to premiums, deductibles, and other costs associated with Part D. There will be some significant changes to the Medicare Part D costs 2025. We will discuss the Part D costs, what changes to expect, and tips to manage these expenses.

Watch a YouTube video on the Part D drug cap

Key Cost Components of Medicare Part D

Medicare Part D plans are offered by private insurance companies. Each plan has varying costs depending on the specific plan chosen. In 2025, the cost structure will include four main components:

Monthly Premiums

Medicare Part D premiums vary significantly, depending on plan and location. The average monthly premium for 2025 is around $40. Keep in mind, premiums for individual plans may be as high as $150 or as low as $0. Additionally, some beneficiaries qualify for the Medicare Extra Help program, which can help reduce premiums and other Part D costs.

Annual Deductible

In 2025, Medicare Part D’s standard annual deductible is capped at $590, though not all plans charge the maximum deductible. In general, plans use tiered pricing, meaning they might charge no deductible for lower-tiered drugs.

Initial Coverage Phase

Once the enrollee meets the deductible, they enter the initial coverage phase. During this phase, enrollees are responsible for a copayment or coinsurance for each prescription. In 2025, the initial coverage limit will be set at $2,000. This means that once the amount spent by the plan and the beneficiary reaches this threshold, enrollees transition to the catastrophic phase.

Catastrophic Coverage

In past years, after reaching the coverage gap or donut hole, beneficiaries would enter the catastrophic phase, with Medicare covering the bulk of prescription costs. A major shift in 2025 is the elimination of coverage gap/donut hole phase, meaning enrollees won’t have to pay coinsurance or copayments after reaching the catastrophic coverage limit of $2,000 in true out-of-pocket costs. This limit provides significant relief, especially for those needing high-cost medications.

Changes and Reforms Affecting Part D Costs in 2025

The Inflation Reduction Act (IRA) of 2022 brought changes to Medicare Part D in an effort to improve cost predictability and help enrollees manage high prescription drug expenses. Here’s a breakdown of the key IRA-related reforms that apply in 2025:

$2,000 Annual Out-of-Pocket Cap
Starting in 2025, Medicare Part D beneficiaries will have an out-of-pocket cap of $2,000 per year on prescription drugs. This landmark change helps beneficiaries with high drug costs avoid excessive spending and will particularly benefit those with high-cost prescriptions as long as they are on their plan’s formulary.

Monthly Payment Options
Medicare will introduce a “smoothing” option for beneficiaries with high prescription costs. This allows enrollees to spread out payments over the course of the year, rather than facing steep costs in any one month.

Managing Medicare Part D Costs in 2025

Compare Plans Carefully

Each Part D plan varies in terms of premiums, deductibles, and formulary (the list of covered drugs). Enrollees should review all available options carefully each year during the Medicare AEP (October 15 – December 7). A licensed Medicare agent can help to ensure beneficiaries choose a plan that best meets their needs and budget.

Use preferred pharmacies

Most Medicare Part D plans have preferred pharmacy networks where beneficiaries can get lower costs. Using these pharmacies can reduce copayments and coinsurance expenses. If enrollees use an out of network pharmacy, prescription drugs will usually cost more.

Ask your provider about lower-cost options

In some cases, when a beneficiary has a high-cost medication that is not on their plan’s formulary, they may want to ask their healthcare provider if there are generic or alternative medication that may be more affordable. Sometimes, a small change in medication can lead to considerable savings. If there is no generic available, their provider may need to ask for a formulary exception. When this is the case, the PDP plan provider agrees to pay for a non-formulary medication.

Evaluate Extra Help Options or patient assistance programs

Those who have a limited income and resources, may qualify for Medicare’s Extra Help program, which can help cover premiums, deductibles, and copayments. This program offers significant savings and could reduce costs drastically.
Additionally, many pharmaceutical companies offer assistance programs that provide discounts on high-cost drugs. Checking for available assistance can be a good strategy, especially for high-cost or specialty medications.

Preparing for 2025 and Beyond

The changes coming to Medicare Part D in 2025 are a step towards making prescription drugs more affordable for Medicare beneficiaries. The introduction of an annual out-of-pocket cap and the smoothing program can help provide Medicare enrollees better predictability of their prescription drug costs.

Anyone who relies on Medicare Part D, should review plan details and explore resources to manage these costs effectively. By understanding the structure of Part D and the recent changes, beneficiaries can maximize savings and access their medications without breaking the bank.