If you’re thinking about selling your property, it’s important to consider the effect it may have on your Medicare costs. Whether or not selling your property will change your Medicare costs depends on various factors, including your location, plan type, and more.
Most people who sell their property plan to move somewhere new. Moving and the money you may earn from the sale are two of the most significant factors to consider. So, will selling your property affect Medicare costs?
Part A
Your Part A costs should not be affected by the selling of your property. Part A costs are based on your work history. If you’ve worked in the United States for at least ten years (40 quarters) and paid payroll taxes during that time, you should pay $0 for your Part A premium. If you do not meet these requirements, you will have to pay for Part A.
So, selling your property should not influence your Part A costs.
Part B
Part B is a little different. Unlike Part A, everyone must pay a premium for Part B. Most people will pay the standard price, which is $148.50, in 2021. However, if your income is above a certain level, you will pay more for your Part B premium. This additional charge is called an Income Monthly Adjusted Amount (IRMAA).
Your Part B premium is based on your modified adjusted household gross income (MAGI). The Social Security Administration will refer to your tax return from two years before to determine if you will pay a higher Part B premium.
For example, if you sell your property and it affects your income level in 2021, it may affect your Part B premium in 2023 because your taxes were affected two years earlier.
Medigap Plans
The costs for Medigap plans depend on different factors, including age, gender, tobacco use, zip codes, and more. If you sell your property and move to a new zip code, your Medigap plan premium will likely change.
The premium could increase or decrease as it all depends on the plan. Some locations are more expensive than others, like Florida, which tends to have higher healthcare costs than other places.
Medicare Advantage Plan
If you’re enrolled in a Medicare Advantage (MA) plan, it’s possible that selling your property and moving somewhere new can affect your costs. MA plans operate within specific network areas. So, if you move to a new property outside your plan’s network, you will most likely need to enroll in a new plan.
Depending on the new plan you choose and its location, you will likely pay a different premium and different copays. Because each plan is different, the exact costs will vary.
Part D
Part D plans are different for each state. If you plan on moving to a new state after selling your property, you will need to enroll in a new Part D plan. Your new Part D plan will most likely have a different premium, different cost-sharing, and copays. Some Part D plans also have deductibles, so this may also change.
Something else to keep in mind is you may have to pay extra for your Part D plan if your income is above a certain level; like Medicare Part B, you would pay an IRMAA fee. If selling your property places you at a higher income level, you may be subject to these extra charges.
Final Thoughts
Selling your property can have an impact on your Medicare costs. If you plan to move after selling, it’s best to begin preparing ahead of time by looking at the plans available in your new location. If you expect the money you earn from the sale to affect your tax return, prepare yourself for the possibility of paying extra for your Part B or Part D costs.
