Although Medicare is often the medical insurance program of choice for retired individuals and those who qualify due to disability, there are many Medicare recipients who rely on the program while still working and earning a paycheck. In most circumstances, Medicare Part D, the prescription drug benefit, is optional coverage for prescription medications that you can purchase from a retail pharmacy and take at home. Part D prescription drug coverage usually comes at a monthly premium, and the cost of this premium can be affected by different factors.
Does My Part D Premium Depend on My Income?
According to Medicare, individuals who make above $85,000 per year and married couples who file taxes jointly making above $170,000 may need to pay additional costs on Part D premiums. The amount can change based on the year’s federal budget, but in 2019, the additional cost was $12.40 per month per person in addition to the regular premium average of $34 per month.
The additional cost may rise based on salaries up to $500,000 annually. Individuals who fall into the highest income bracket can expect to pay around $77.40 per month on top of the regular Part D premium amount. For married couples who file taxes jointly, the combined income minimum to meet this standard is $450,000 and above.
Why Do I Have to Pay More?
If you do fall into one of the higher income brackets that require a larger premium, you may be wondering why you are being singled out. The Medicare program is designed to pay out benefits based on money taken in through taxes from those currently working. This also means that the program receives a larger amount of funding from those who are in the top earning spots. If you’re still drawing an income and you’re taking advantage of Medicare at the same time, you are being required to contribute more for your share as well as the other shares that would normally be taken out to fund other recipients of the program.
Can I Reduce My Tax Liabilities?
If you’re still receiving an income and you’re having to pay more for your monthly Medicare Part D premium, you may want to speak with a financial advisor who specializes in taxes. While you can’t avoid paying the taxes you owe, you may be able to reduce liabilities by taking advantage of programs provided by the Internal Revenue Service to assist in relieving financial burdens on high-income individuals.
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