How Can Beneficiaries Appeal Medicare Income Decisions?

How-to Appeal a Medicare Income Decision

1. You have the right to appeal determination of premium amounts.
2. File a Request for Reconsideration (Form SSA-561-U2).
3. Alternatively, go to your local Social Security Administration (SSA) office to file the appeal.
4. An appeal is not necessary if you have experienced an event that has caused a decrease in income.
5. If the dispute is with the income amount provided by the IRS, the information must be corrected with the IRS.

How Is Beneficiary Income Relevant to Medicare?

Beneficiaries are means-tested based on income reported to the IRS, which means that those with higher income levels are required to pay higher premiums for Part B and Part D. This affects less than 5 percent of beneficiaries, so most people do not pay higher premiums. Medicare calls this higher premium the income-related monthly adjustment amount. Beneficiary income and resource levels are also used to ascertain eligibility for Extra Help in paying for Part D prescription drugs.

Related: How Is Beneficiary Income Calculated by Medicare?

Your Right to Appeal

A beneficiary who disagrees with a Centers for Medicare & Medicaid Services (CMS) determination of premium amounts has the right to appeal by filing a Request for Reconsideration (Form SSA-561-U2) or by contacting a local Social Security Administration (SSA) office to file an appeal. Appeals are not necessary if a beneficiary has experienced an event that has caused a decrease in income (for example, divorce or death of a spouse) or if she or he can prove that the information used to make a determination is wrong. If, however, the disagreement is with the modified adjusted gross income (MAGI) amount provided by the IRS, the information must be corrected with the IRS. If it is determined that a beneficiary must pay a higher amount for Part D but she or he doesn’t have that coverage, the beneficiary should call the CMS to make a correction.

Decrease or Loss of Income

If a beneficiary’s circumstances cause a decrease in income, a new decision about the income-related amount may be made. Circumstances the CMS will review are if a beneficiary:

1. has a change in marital status;
2. stops working or reduces work hours;
3. has a loss of income-producing property due to circumstances beyond the beneficiary’s control, such as a natural disaster;
4. experiences a cessation, termination or reorganization of an employer’s pension plan;
   receives a settlement from an employer or former employer because of business closure, bankruptcy or reorganization.

If these circumstances occur, a beneficiary should again bring documentation of the event to a local SSA office. Such documentation might include a death certificate, a letter from an employer, or a signed copy of any federal income tax return that pertains to the year in question.

Incorrect IRS Information

If a beneficiary finds that the IRS has not provided the most recent return, she or he can call or visit a local SSA office to update the records. If a beneficiary has filed an amended return that shows changed income amounts, the beneficiary should bring the amended return and acknowledgment receipt from the IRS to an SSA office. Records will be updated and payments adjusted as appropriate.