11/24/2021
People who undergo a major life-changing event ("LCE") can get their IRMAA reduced. SSA is promulgating new rules to determine what qualifies as a LCE. They want comments from the public. That's you.
Medicare recipients whose MAGI income, on their 1040 income tax return from 2 years ago, exceeds certain incremental thresholds pay extra for their Part B and Part D premiums. The Income Related Monthly Adjusted Amount ("IRMAA") more than triples the amount due for Part B, from the base amount of $170.10 to $578.30, for single 1040 filers with incomes above $499,999, and for married filing jointly (MFJ) filers with incomes above $749,999. The Part D add-on is over 6 times the base amount, from the base of $12.40 to $77.90, for the same filers. While those are big increases, the impact on the purse can be greater for filers whose MAGI is below that big number but still above the minimum. Single filers with MAGI between $91,001 and $114,000 and MFJ between $182,001 and $228,000 pay an additional $68.10 for Part B, and single filers between $114,001 and $142,000, MFJ between $228,001 and $284,000 pay an extra $170.10, for example. See my note from November 15 for more numbers.
In 86 Fed Reg. 66488-66491 (November 23, 2021), SSA announces it seeks comment from the public to guide them in making potential changes that may incorporate being affected by fraud as a ground for reducing IRMAA in individual cases.
IRMAA exists, btw, because the feds want to reduce the amount by which Medicare premiums are subsidized by general tax dollars, for beneficiaries considered financially comfortable enough to be able to afford less of a subsidy. As SSA so redundantly phrases it, "most enrollees pay a monthly premium representing about roughly 25 percent of the estimated actual cost for Part B and the cost of basic prescription drug coverage for Part D." Citations to statutory and regulatory authority, and illustrative narrative explaining the IRMAA program in greater detail, are provided in the Fed. Reg. announcement. The nitty gritty for this particular announcement, however, is that "Beneficiaries who experience a major life-changing event may request that we use information from a more recent tax year to make a new IRMAA determination by completing an SSA-44 (Office of Management and Budget (OMB) No. 0960-0784). Major life-changing events include marriage, divorce or annulment, death of a spouse, work reduction or stoppage, loss of income-producing property, loss of employer pension or receipt of settlement payment from a current or former employer. If a beneficiary provides evidence that a qualifying major life-changing event caused a significant reduction in MAGI, we will determine the IRMAA based on data from a more recent tax year. . . . [citations omitted]"
The revision being being contemplated in this Advance Notice of Proposed Rulemaking (that is to say, no actual proposed regulation has been formulated; this is sort of the focus group stage) would take into account the impact of fraud as a LCE. SSA says this is an important issue because --
"Fraud impacts a greater number of Americans each year and to a greater economic extent. The Federal Trade Commission (FTC) reported receiving more than 2.2 million reports of fraud from consumers, who reported losses of more than $3.3 billion in 2020 (an increase from $1.8 billion in 2019). Just over a third of all consumers who filed a fraud report with the FTC-- 34 percent-- reported losing money, up from 23 percent in 2019. For example, among the increasing reports of fraud, the FTC cites imposter fraud as the number one category of fraud by loss amount. The "imposter fraud" category includes ". . . romance scams, people falsely claiming to be the government, a relative in distress, a well-known business, or a technical support expert, to get a consumer's money." Additionally, as the COVID-19 pandemic continues to impact the United States, the Federal Communications Commission has learned of new scam text-message campaigns and robocalls that prey on virus-related fears, and the FTC has warned against scammers attempting to cash in on confusion relating to COVID-19 vaccines.
"In addition to the above noted new and increased types of fraud, we have also become aware of a significant increase in Social Security number (SSN)-related fraud, and scammers who pose as government employees to defraud unsuspecting victims of their personal information and money. In January 2020, our Inspector General appeared before Congress to address this matter. The Inspector General gave testimony about a significant increase in complaints of callers impersonating Social Security employees or alleging an SSN-related problem. She noted that, in fiscal year (FY) 2018, our Office of the Inspector General (SSA OIG) recorded about 15,000 related complaints, while in FY 2019, the number of such complaints grew to over 478,000. For FY 2020, SSA OIG recorded over 718,000 complaints related to Social Security telephone scams, and in its most recent semiannual report to Congress (for the period of October 1, 2020 through March 31, 2021), SSA OIG reports having received more than 400,000 such complaints during that 6-month period, which would exceed the rate for FY 2020. The FTC reports that Social Security-related phone scams are the most common type of government imposter fraud targeting the public. Recently, the U.S. Attorney's Office for the Northern District of Georgia helped shut down a criminal ring that defrauded the public of over $20 million by impersonating Social Security or IRS employees. We note, however, that Social Security impersonation scams are only one among many types of fraud that could result in income changes that ultimately affect IRMAA amounts. . . .
" Scams, regardless of whether they involve impersonation of SSA employees, may severely harm our beneficiaries in numerous ways, including with respect to our determinations regarding IRMAA. For example, a beneficiary may be defrauded out of a significant amount of money. In addition to losing money, the victim may engage in financial transactions to pay scammers-- such as withdrawing funds from tax-advantaged retirement accounts or liquidating stock-- that increase their MAGI for the year in question. The higher reported income appearing on the victim's tax return can result in an IRMAA assessment or IRMAA increase two years later. [citations omitted] . . ."
For those interested in contributing to the process, please see the full announcement in the Fed. Reg. Your deadline for submitting comments is January 24, 2022.
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