also covers other medical services, such as physical and occupational therapy, and some home health care. For most beneficiaries, the government pays a substantial portion, 75 percent, of the Part B standard premium and the beneficiary pays the remaining 25 percent.
Beginning in 2007, the government portion was reduced for higher income beneficiaries who began paying a larger percentage of the premium based on income they reported to the Internal Revenue Service. In 2008, higher income beneficiaries will be responsible for 67 percent of their income-related adjustment. By 2009, the end of the transition period, these higher income beneficiaries will pay a monthly premium equal to 35, 50, 65, or 80 percent of the total Part B cost, depending on their income level.
However, the law is expected to affect only about 4 to 5 percent of Medicare beneficiaries, so most people will continue to pay the standard premium, without an income-related adjustment.
To determine if you will pay a higher Part B premium, the IRS will send Social Security information from your most recent tax return. A sliding scale will be used to make adjustments to premiums. The sliding scale will be based on your modified adjusted gross income, MAGI. Your MAGI is a combination of your adjusted gross, taxable, income and tax exempt interest income.
In 2008, if you file your taxes as "married, filing jointly" and your MAGI is more than $164,000, you will pay a higher Part B premium. For all other taxpayer filing statuses, if your MAGI is more than $82,000, you will pay a higher Part B premium.
After getting the IRS data, if it is determined you will need to pay a larger percent of the premium; you will receive a letter explaining how the determination was made and what your new premium will be. However, it is important to remember that if your income does not exceed the limits described; this law does not apply to you.
To determine your 2008 Part B premium, the most recently filed tax return information will be provided by IRS. Generally, this information is from a tax return filed in 2007, for tax year 2006. Sometimes, IRS can only provide information from a return filed in 2006, for tax year 2005. If tax year 2005 data is used and you filed a return for tax year 2006 or did not need to file a tax return for tax year 2006. you should visit the Social Security office nearest you.
If you amended your tax return and it changed the income counted, you should let the Social Security Administration know. Send a copy of the amended tax return that you filed and your acknowledgment receipt from IRS. Social Security will update their records with the information provided and correct your Part B premiums back to the earliest time in the year you had Part B.
If your income has gone down due to any of the following circumstances and the change will make a difference in the income level considered, contact Social Security to explain that you have new information and may need a new decision about your Medicare Part B premium:
You married;
You divorced or your marriage was annulled;
You became a widow/widower;
You or your spouse stopped working or reduced work hours;
You or your spouse lost income from income-producing property due to a disaster or other event beyond your control; or
You or your spouse's benefits from an insured pension plan stopped or were reduced.
If any of these events happen, you will need to show the Social Security Administration evidence of the event and tell them how it has reduced your income. Evidence could be a death certificate, a letter from your employer about your retirement, or something similar. If you filed a federal income tax return for the year in question, you will need to show a signed copy of the return.
If you disagree with the decision regarding your Medicare Part B premium amount, you have the right to appeal. You may request an appeal in writing by completing a "Request for Reconsideration”: Form SSA-561-&2, or you may contact your local Social Security office to file your appeal, or request a copy by calling the Social Security Administration.
You do not need to file an appeal if you are requesting a new decision because of an event listed that made your income go down or if you have shown the information used to be wrong.
Contact information:
Social Security 1-800-772-1213
www.socialsecurity.gov/mediinfo.htm
Medicare Part B 1-800-633-4227