How to Avoid the Medicare High-Income Surcharge

If your income has dropped since 2009, you may be able to eliminate the surcharge on Part D prescription-drug coverage.

Has the government announced the new 2011 Medicare Part B premiums yet? I retired recently, and I am worried that I’ll have to pay the high-income surcharge based on my income from when I was still working.

Yes, Medicare just announced next year’s premiums, which remain steady for most people. But high-income beneficiaries face an even bigger hit than in the past -- not only will they have to pay higher premiums for Medicare Part B, which covers doctor visits and outpatient services, but they’ll also have to pay a new surcharge for Part D Medicare prescription-drug coverage starting in 2011. However, you may be able to avoid the surcharge, depending on when you retired.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.