Mike: I am currently 59 and on Social Security Disability Insurance. I had lottery winnings in 2014 and now find my Medicare premiums are being raised a lot in 2016. Can they do this to me? Chop away my monthly payments because I won money? Is there anything I can do? If I don’t win any money next year, will the government see this and reduce my premiums back to their regular levels? Since my Medicare Part B went up, will I be able to claim that as an expense on my itemized tax deductions?
Phil Moeller: The lottery is not good luck when it comes to Medicare premiums. Under what’s called the income-related monthly adjustment amount, or IRMAA, Social Security can raise premiums for both Part B and Part D Medicare coverage if your annual income exceeds $85,000 ($170,000 on joint returns). And as Mike found out, it uses a two-year look back period in determining IRMAA surcharges. Winning the lottery is normally not the basis for challenging an IRMAA surcharge. Your higher Part B expenses are tax deductible as a health care expense, but remember that the threshold for these deductions was raised from 7.5 percent to 10 percent of taxable income under the Affordable Care Act.