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It can be frustrating if you’re just a little over the income limit. If your income is below average, you could pay a high income penalty. If your income is below average, might not qualify for a program for people with lower incomes.

How to Show Less Annual Income

Some income-based programs base their requirements on annual income. One example is the Income-Related Monthly Adjustment Amount (or IRMAA) which can increase your costs for Medicare Part B.

The problem: You could pay more for Medicare Part B if your income is over $85,000 per year (if single) or $170,000 (if married). Your current year’s income affects how much you will pay for Medicare two years from now. (The income limits above are for 2016 income. 2016 income impacts your 2018 premiums.)

A possible solution: If you are able to put enough money into an traditional (not a Roth) individual retirement account, you may be able to get your adjusted gross income under the limit. This could bring costs for Medicare down. Money you deposit in an IRA is still yours, you just won’t have access to it right away. You must have earned income and meet other requirements during any year you contribute to an IRA. (Please consult a tax advisor before proceeding with this suggestion.)

This blog post may help you avoid the extra premium this year.

How to Show Less Monthly Income

Some programs base their requirements on monthly income. One example is the Medicare Savings Program which can pay your Medicare Part B premium and lower your copays for drugs and reduce other out-of-pocket expenses.

The problem: If your monthly income is below $2,572 (if single) or $3,328 (if married), the state of Connecticut may pay your Medicare Part B premium. But if it is one dollar higher, you will have to pay the full amount.

(These income limits may change drastically in July of 2018, making it much harder to qualify. Our state legislature will vote on this issue in June.)

A possible solution: If part of your income comes from 401(k) or IRA withdrawals, reducing increasing the amount and reducing the frequency of these withdrawals, may help. Your monthly income will only be increased during the the months you receive the income. This may allow you to have an annual income that is more than 12 times the monthly limit and still qualify most months of the year.

{% if subscriber.first_name %}{{ subscriber.first_name }}, {% endif %}I hope you see value in these email tips. If you want to ask me a question or you want my help enrolling, please call or email me.

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Alston J. Balkcom

“ Connecticut-licensed insurance agent since 1985.”