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Category: Medicare

The Hidden Medicare Surcharge That Hits Retirees With Over $109,000 in Income

Andy |

Christy Bieber

Many seniors who are 65 and over rely on Medicare to provide them with healthcare coverage, and with good reason. Medicare is available from the government regardless of your health status. It provides coverage for a broad array of services (typically without requiring pre-approval), and it usually comes with affordable premiums.

The keyword, there, however, is usually.

Medicare premiums for most seniors come in at $202.90 for Medicare Part B in 2026. However, some seniors will find themselves hit with an unexpected Medicare surcharge that they may not have been expecting — and that could have a serious impact on their finances. Here’s why these surcharges happen and what it could mean for you.

If your income is $109,000 or higher, you could face a surprise Medicare hit

The Medicare surcharge that you could find yourself surprised by results from something called the Income-Related Monthly Adjustment Amount, or IRMAA.

IRMAA causes your Medicare Part B and Medicare Part D premiums to increase dramatically once your income goes above a specific threshold. That threshold is $109,000 for single tax filers and $218,000 for married joint filers. However, while this is the threshold in 2026 that will send your Medicare premiums surging, it’s not your 2026 income that matters, or even your 2025 income.

The income that matters is your Modified Adjusted Gross Income (MAGI) from two years earlier. So, if your MAGI in 2024 was above those thresholds, then you’ll be faced with higher Medicare premiums in 2026. This can come as a shock, as you may not be aware that a year of higher-than-normal income due to something like capital gains from selling high-performing investments could end up being a ticking time bomb that causes your Medicare premiums to substantially increase two years later.

How much higher will your Medicare premiums go?

The increase in Medicare premiums that results once your income exceeds IRMAA thresholds can be extremely substantial. The table below shows how much you can expect to pay in monthly premiums based on your MAGI and the Income-Related Monthly Adjustment amount:

Full Part B Coverage
Single tax filers with a MAGI that is: or Joint tax filers with a MAGI that is: 

Will pay an IRMAA equal to:

Bringing total Medicare premiums to:
Less than or equal to $109,000 Less than or equal to $218,000

$0.00

$202.90
Greater than $109,000 and less than or equal to $137,000 Greater than $218,000 and less than or equal to $274,000

$81.20

$284.10
Greater than $137,000 and less than or equal to $171,000 Greater than $274,000 and less than or equal to $342,000

$202.90

$405.80
Greater than $171,000 and less than or equal to $205,000 Greater than $342,000 and less than or equal to $410,000

$324.60

$527.50
Greater than $205,000 and less than $500,000 Greater than $410,000 and less than $750,000

$446.30

$649.20
Greater than or equal to $500,000 Greater than or equal to $750,000

$487.00

$689.90

That means you could be looking at paying as much as $487 extra per month — and paying total premiums as high as $689.90 — because you had a year when your income was high. Of course, if you have many years of high earnings as a retiree, you could be hit with this surcharge for the entirety of your retirement during the years Medicare covers you.

What can you do about the IRMAA adjustments?

A close-up shot of an older man with gray hair and a beard, wearing a light blue shirt, looking distressed and holding his temples with his hands. In the blurred background, blue-tinted documents are visible, including a 'MEDICARE HEALTH' form with 'JOHN DOE' and text about 'NEUTROPHILS', alongside a prescription bottle label showing 'MEDICATION QTY: 20' and 'Refills'.

If you are subject to these adjustments to Medicare premiums because of your income, there’s not much you can do.

Your best bet is try to avoid having this happen in the first place by considering investing for retirement in a Roth IRA or 401(k) instead of a traditional account, and being careful about how large your withdrawals are or when you sell assets to limit capital gains.

A financial advisor can help you make a strategic plan to try to help you avoid sending your Medicare premiums skyrocketing, so you can keep more of your hard-earned funds in your accounts instead of sending extra money to Medicare.

Medicare Supplement Plan G: Your Guide to “Zero-Surprise” Healthcare

Andy |

Original Medicare (Parts A and B) is a great start, but it leaves significant “gaps”—like the 20% coinsurance you pay for doctor visits and hospital stays. Medigap Plan G is designed to step in and pay those bills for you, providing the most comprehensive coverage available to new Medicare members today.

How Plan G Works

Think of Plan G as a “shield” for your savings. Once you pay one small annual deductible, your plan takes over 100% of your Medicare-approved medical bills.

  1. You pay the Part B Deductible: In 2026, this is $283 for the entire year.
  2. Plan G pays the rest: After that first $283, you pay $0 for Medicare-approved doctor visits, surgeries, lab work, and hospital stays.
  3. Freedom of Choice: You can see any doctor in the U.S. who accepts Medicare. No networks, no referrals, and no “prior authorizations” required.

Why Plan G is Your Best Option

While other plans exist, Plan G remains the “Gold Standard” for three reasons:

The Hazard of Waiting: Why Now is the Best Time

There is a “Golden Window” to buy a Medigap plan, and missing it can be a costly mistake.

CONTINUED ON NEXT PAGE

Plan G vs. The Alternatives

Feature Medigap Plan G Medicare Advantage
Doctor Choice Any doctor in the U.S. Limited Network (HMO/PPO)
Referrals Never needed Usually required for specialists
Out-of-Pocket Costs $283 annual max Up to $9,000+ per year
Predictability High (Flat monthly premium) Low (Pay-as-you-go copays)

The Bottom Line: If you want the freedom to choose your own doctors and the security of knowing exactly what your healthcare will cost each year, Plan G is the smartest choice for your retirement.

If you have a home in Arizona and would like a quote or have questions on Medicare Plan G we can help!

Andy Orlikoff

American Insurance Benefits

www.AZhealth.us

623-742-3878

The Great Medicare U-Turn: How to Switch Back to Original Medicare

Andy |

The Great Medicare U-Turn: How to Switch Back to Original Medicare

If you’ve spent the last year realizing that “Advantage” doesn’t always feel like an advantage, you aren’t alone. Maybe your favorite specialist left the network, or you’re tired of asking for “prior authorization” just to get an MRI.

The good news? If you’re reading this in January, the door is wide open for a change. But before you jump ship, there’s a specific sequence you need to follow to avoid getting stranded without coverage.

1. The “Right Now” Window: The 2026 MA OEP

Since today is January 26, 2026, you are currently in the Medicare Advantage Open Enrollment Period (MA OEP). This runs from January 1 to March 31. The Fall Window: Annual Enrollment Period (AEP) Dates: October 15 – December 7.

During this time, you can:

Note: If you make the switch this month, your new coverage will typically begin on the 1st of the following month.

2. The Medigap “Trap”: Don’t Drop Your Plan Yet!

This is the most critical part of the U-turn. Unlike Medicare Advantage, which must take you regardless of health, Medigap (Medicare Supplement) providers in most states can use medical underwriting.

The Risk: If you have a pre-existing condition, a Medigap insurer can charge you more or deny you a policy entirely unless you have a “Guaranteed Issue Right.”

Do you have a “Guaranteed Issue Right”?

You generally don’t need a health screening if:

The Golden Rule: Secure your Medigap policy and get an acceptance letter before you officially disenroll from your Medicare Advantage plan.

3. Your 2026 Transition Checklist

Switching back involves a three-step dance. If you miss a step, you could face lifetime penalties or massive bills.

Step Action Why it matters
Step 1 Apply for Medigap Ensures your “gap” coverage is locked in before you leave your current plan.
Step 2 Join a Part D Plan Medicare Advantage usually includes drugs; Original Medicare does not. Missing this causes a late-enrollment penalty.
Step 3 Confirm Disenrollment Joining a standalone Part D plan usually automatically triggers your exit from Medicare Advantage, but always call your plan to confirm.

4. What Original Medicare Costs in 2026

Since you’re moving back to the “Original” way of doing things, here is a quick look at the 2026 rates:

Why People are Making the Switch

In 2026, the maximum out-of-pocket (MOOP) for Medicare Advantage plans can be as high as $9,250. For someone facing a major surgery or chronic illness, that “low premium” plan can suddenly become very expensive. Medigap Plan G, by contrast, covers nearly everything after you pay the small Part B deductible, giving you total “cost predictability.”

#healthinsurance #medicare #medigap #medicareadvantage #surprise, AZ #Sun City, AZ

The “Part G” Paradox: Why This Medigap Powerhouse Is the 2026 Gold Standard

Andy |

If you’ve been scouring the internet for “Medicare Part G,” I have some good news and a tiny “well, actually” for you. First, the correction: there is no Medicare Part G. Medicare has “Parts” (A, B, C, and D) that come from the government. What you’re looking for is Medicare Supplement Plan G (also known as Medigap).

Now, the good news: you’ve accidentally stumbled upon what most experts consider the “Gold Standard” of Medicare coverage in 2026. If you value predictability, flexibility, and never having to wonder if your doctor is “in-network,” Plan G is your new best friend.

What is Medicare Supplement Plan G?

Think of Original Medicare (Parts A and B) as a solid foundation for a house, but one that’s missing a few windows and maybe a front door. You’re responsible for deductibles, 20% coinsurance, and “excess charges” that can turn a simple procedure into a financial headache.

Plan G is the high-end renovation that fills almost every one of those gaps. It is the most comprehensive plan available to anyone new to Medicare since 2020.

The Big Benefits: What’s Covered?

In 2026, Plan G remains the heavyweight champion of coverage. Here’s the breakdown:

Why Choose Plan G Over the Competition?

1. The “No Surprises” Budget

With Plan G, your only major out-of-pocket medical expense for the year is the Medicare Part B deductible ($283 in 2026). Once you pay that first $283, the plan covers 100% of your Medicare-approved expenses for the rest of the year. No $20 copays, no “facility fees,” just peace of mind.

2. Freedom of Movement

Unlike Medicare Advantage (Part C), Medigap Plan G has no networks. If a doctor, specialist, or hospital anywhere in the U.S. accepts Medicare, they accept your Plan G. You don’t need a referral to see a cardiologist in another state or a surgeon across town.

Summary: Why Buy Plan G?

Looking for a Medigap plan in Sun City, Arizona? I can help!

American Insurance Benefits – Andy Orlikoff

623-742-3878

www.azhealth.us

#healthinsurance #Medigap #Medicare

The 7-Month Deadline That Determines Your Lifetime Medicare Premiums

Andy |

Understanding Medicare enrollment is crucial, as missing deadlines can lead to permanent late enrollment penalties and gaps in coverage.

Donna LeValley's avatar
BY

PUBLISHED

Turning 65 should be a milestone of freedom, not a source of financial stress. Yet, for millions of Americans, navigating the first step of Medicare — the Initial Enrollment Period (IEP) — becomes a confusing high-stakes gamble.

The IEP is a critical seven-month window centered on your 65th birthday, and missing it can trigger something far worse than a temporary inconvenience: lifetime late enrollment penalties added to your Part B and Part D premiums, along with costly gaps in coverage.

Whether you are ready to retire or plan to keep working, understanding this single, immutable deadline is the first and most important step to securing your health care future.

The Medicare Initial Enrollment Period (IEP)

The Initial Enrollment Period (IEP) is the first time you are eligible to sign up for Medicare Part A hospital insurance and Part B medical insurance.

The IEP is a 7-month window centered around the month you turn 65:

  • 3 months before the month you turn 65
  • The month you turn 65
  • 3 months the month you turn 65

Birthday Rule: If your birthday falls on the first day of the month, your Medicare eligibility is moved forward one month. Your IEP and coverage start one month earlier.

When you sign up

Coverage start date

During the 3 months before your 65th birthday month

The month you turn 65 (earliest possible start)

During the month you turn 65

The following month

During the 3 months after your 65th birthday month

1 to 3 months later (depending on the month you enroll)

The penalties for missing the IEP

Medicare penalties are surcharges added to your monthly premiums for as long as you have that part of Medicare, except for Part A. These penalties are designed to encourage timely enrollment.

If you miss your IEP and do not qualify for a Special Enrollment Period (SEP) (usually due to having creditable employer coverage), you face two serious consequences:

Penalty

Penalty calculation

Duration

Impact

Medicare Part B Penalty-This is the most common and expensive penalty.

You pay an extra 10% of the standard Part B premium for every full 12-month period you were eligible for Part B but didn’t enroll and did not have qualifying creditable coverage (usually from an active, large employer).

The penalty is permanent. It lasts for as long as you have Part B.

The penalty is based on the current standard premium, which usually increases every year. This means your dollar penalty amount will also rise annually.

Medicare Part D penalty– This penalty applies if you go 63 days or more without creditable prescription drug coverage after your IEP ends.

Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($34.50 in 2026) by the number of full, uncovered months you were eligible but didn’t enroll.

The penalty is permanent and is added to your Part D plan’s premium for as long as you have Part D coverage, even if you switch plans.

This penalty is added even if you choose a Part D plan that has a $0 monthly premium.

Medicare Part A penalty– Most people receive Part A premium-free (because they or a spouse worked and paid Medicare taxes for 40 quarters). The penalty only applies if you have to buy Part A and you enroll late.

Your Part A premium may go up by 10%.

You pay the penalty for twice the number of years you were eligible but didn’t sign up. For instance, if you delayed enrollment for 2 years, you pay the penalty for 4 years.

How employer insurance factors in

Deciding when to enroll is highly dependent on your current or your spouse’s employer-provided group health plan and the size of the employer. Before your IEP begins, you should always speak with your employer’s Benefits Administrator or HR department and ask these two questions:

  • “How many employees are currently on the payroll?” Why? This determines if Medicare your is primary or secondary insurance.
  • “Is our employer-provided prescription drug coverage considered creditable coverage by Medicare?” Why? If not, you may need to enroll in Part D during your IEP to avoid a Part D penalty later.

Primary and secondary coverage

When you have Medicare and other health coverage, such as a group plan, retiree coverage, or Medicaid, each plan is called a payer. The payment process follows a specific sequence, known as “coordination of benefits.”

  • Primary payer: This plan pays the medical bill first, up to the limits of its coverage.
  • Secondary payer: The remaining balance is then sent to this plan, which pays for services covered by its policy.
  • Your responsibility: If the secondary payer doesn’t cover the full remaining balance, you may be responsible for the rest of the costs.

Important reminder for those covered by a group or retiree plan: If your group health plan or retiree coverage is the secondary payer, you might be required to enroll in Medicare Part B before they will agree to pay their portion of the costs.

Employer-provided insurance

When working for a ‘large employer’ (20 or more employees): If you, or your spouse, are still working and covered by a group health plan from an employer with 20 or more employees, the employer’s plan is considered the ‘Primary Payer’. It can be used in place of Medicare Part B and you can generally delay enrollment in Part B without penalty.

Since Part A is usually premium-free, many people enroll in it at 65, even while working. It serves as secondary insurance in the case you are hospitalized.

A Special Enrollment Period (SEP) is available when employer coverage ends: When your current employment ends or your employer coverage ends (whichever comes first), you qualify for a penalty-free SEP to enroll in Part B. This SEP lasts for 8 months after the employment or coverage ends.

Caution: If you have a Health Savings Account (HSA), you cannot contribute to it once you enroll in any part of Medicare (even premium-free Part A). You must stop contributions at least six months before you plan to enroll in Part A.

Working for a ‘small employer’ (fewer than 20 employees): If you or your spouse is still working and covered by a group health plan from an employer with fewer than 20 employees, Medicare generally becomes the ‘Primary Payer’ at age 65.

In this circumstance, you must enroll in Medicare Part B during your IEP. Why? If you delay Part B, your employer’s plan may only pay a small fraction of your medical bills (or nothing at all), resulting in massive out-of-pocket costs, and you will face the late enrollment penalty.

Retiree coverage and Medicare Part B: The critical difference between retiree coverage vs active coverage is whether your insurance is considered “creditable coverage based on current employment.” Retiree coverage, insurance offered by a former employer, union or government entity, does not qualify you for a Special Enrollment Period (SEP) to delay enrollment in Medicare Part B. The only time you can delay Part B without penalty is if you (or your spouse) are actively working and covered by an employer group health plan (EGHP).

Most employer-sponsored retiree plans are designed to work with Medicare, not replace it. Once you turn 65, most retiree plans expect Medicare to pay first.

Before making any enrollment decisions, contact your former employer’s benefits administrator/HR department and ask these crucial questions:

  • “Am I required to enroll in Medicare Part A and Part B to keep my retiree health coverage?” (The answer is almost always yes.)
  • “Is my retiree prescription drug coverage considered creditable coverage?”  If the answer is no, you must enroll in a Part D plan during your IEP.
  • “If I enroll in a separate Medicare Part D plan, will I lose my entire retiree health plan?” (Some plans will terminate all your retiree benefits if you enroll in a separate Part D plan.)

Different rules for retiree coverage and Medicare Part D: The rules are slightly different for prescription drugs (Part D). You can delay enrollment in a Medicare Part D plan without penalty only if your retiree drug coverage is considered creditable coverage. Creditable means the plan is expected to pay, on average, at least as much as standard Medicare Part D coverage.

For prescription drug coverage, your former employer or union must send you a notice each year, before October 15, informing you whether your drug coverage is creditable. You must keep this notice as proof.

COBRA Coverage: COBRA is generally not considered “coverage based on current employment” because you (or your spouse) has been ‘separated from service.” This means an employee’s ties with an employer have ended, due to retirement, resignation, termination or death.

You will qualify for a SEP when you lose your employer-provided insurance and have up to eight months after you stop working (or lose your health insurance, if that happens first) to sign up for Part B without a penalty, whether or not you choose COBRA. The end of COBRA coverage will not trigger a second SEP.

The process for enrolling in Medicare Part A and Part B

If you’re 65 or older, you can enroll in Parts A and B, or Part A only. You can delay Part B if you’re already covered through an employer group health plan. If you want to sign up for a Medicare Advantage or Part D drug plan, you have to enroll in Medicare first. You can make specific elections after enrollment.

You may be surprised to learn that enrollment for original Medicare (Part A and Part B) is handled by the Social Security Administration (SSA), not Medicare itself.

Automatic Enrollment: You will be automatically enrolled in Part A and Part B if you are already receiving Social Security retirement benefits or Railroad Retirement Board (RRB) benefits at least four months before you turn 65.

If you are automatically enrolled, you will receive your Medicare card in the mail approximately three months before your 65th birthday. You can choose to opt out of Part B if you have qualifying employer coverage. You can’t disenroll from Medicare Part A. Since most people don’t pay a premium for Part A, it can serve as secondary insurance if you are hospitalized.

Manual Enrollment: If you are not receiving Social Security benefits at age 65, you must sign up manually during your 7-month IEP.

Online: Applying through the official Social Security website. This is the fastest method, and you can apply for Medicare only if you are delaying Social Security retirement benefits.

If you want to sign up online, you must create or sign in to your personal my Social Security account.

  • By phone: Call the SSA at 1-800-772-1213. Tell the representative you want to sign up for Medicare Parts A and B, or just Part A.
  • In person: If you are more comfortable applying in person, then your best option is to visit your local Social Security office.

The process for signing-up for Medicare Advantage (Part C) and Part D drug plans

Medicare Advantage and Part D insurance coverage is managed by private insurance companies. If you want to enroll in either plan, you generally sign-up directly with the insurer after enrolling in Medicare.

Medicare Advantage Plans (Part C): You can enroll directly with a private insurance company after you have enrolled in both Part A and Part B. You can do this during your IEP.

Part D (drug plans): You can enroll through the Medicare Plan Finder tool on Medicare.gov, by contacting the specific insurance plan directly, or by calling 1-800-MEDICARE. You must sign up for this during your IEP to avoid penalties.

Knowing your IEP saves you money

Before your seven-month window closes, it is essential to calculate your start and end dates precisely. Don’t forget about the impact of the Medicare birthday rule. If your birthday falls on the first day of the month, your Medicare eligibility is moved forward one month. Your IEP and coverage start one month earlier.

If you have employer coverage, confirm your company’s employee count and obtain proof of creditable coverage in writing. Don’t rely on assumptions or general advice; rely on the specific rules of the IEP.

Taking these decisive actions now guarantees you avoid the painful late enrollment penalties, ensuring your retirement is defined by financial peace, not preventable premium surcharges.

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