Medicare Premiums and Cost of Health Care Once on Medicare

Does the program estimate Medicare premiums based on my income each year? And how does it handle medical expenses that Medicare doesn't cover?

You can have the program calculate Medicare premiums for parts B and D for you using the setting you see below called 'Use Program Estimate for Medicare Parts B & D Premiums'. The program uses your projected income and the income-related monthly adjustment amount (IRMAA) to calculate this.

The federal government looks back two years for income for this calculation. However, because the program does not know your income from two years ago unless the projection is at least three years from today, the program will use the current year's income in the first two years of projections and then looks back two years after that.

 Customers who signed up after 8/6/2023 could have additional medical costs (in addition to Medicare premiums) estimated for them based how they rate their health when they first signed up. You can see this in the image below. If you do not see these medical expenses in the Goals & Additional Expenses section then you need to add an expense for items that Medicare doesn't cover, which can include vision, dental, long hospital stays, and other medical expenses that aren't covered.


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