Medicare Part B Income-Related Monthly Adjustment Amount, 10926-10939 [06-2075]
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Federal Register / Vol. 71, No. 42 / Friday, March 3, 2006 / Proposed Rules
Paragraph 6005 Class E airspace extending
upward from 700 feet or more above the
surface of the earth.
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AAL AK E5 Big Lake, AK [Revised]
Big Lake Airport, AK
(Lat. 61°32′10″ N., long. 149°48′50″ W.)
Big Lake VORTAC
(Lat. 61°34′10″ N., long. 149°58′02″ W.)
That airspace extending upward from 700
feet above the surface within a 6.2-mile
radius of the Big Lake Airport, and within 4
miles north and 8 miles south of the 295°
radial of the Big Lake VORTAC extending to
16 miles west of the VORTAC.
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Issued in Anchorage, AK, on February 24,
2006.
Michael A. Tarr,
Manager, Operations Support.
[FR Doc. E6–3072 Filed 3–2–06; 8:45 am]
BILLING CODE 4910–13–P
SOCIAL SECURITY ADMINISTRATION
20 CFR Part 418
RIN 0960–AG11
Medicare Part B Income-Related
Monthly Adjustment Amount
AGENCY:
Social Security Administration
(SSA).
Notice of proposed rulemaking
(NPRM).
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ACTION:
SUMMARY: We propose to add to our
regulations a new subpart, Medicare
Part B Income-Related Monthly
Adjustment Amount, to contain the
rules we would follow for Medicare Part
B income-related monthly adjustment
amount determinations. The monthly
adjustment amount represents the
amount of decrease in the Medicare Part
B premium subsidy, i.e. the amount of
the Federal Government’s contribution
to the Federal Supplementary Medical
Insurance Trust Fund. This new subpart
would implement section 811 of the
Medicare Prescription Drug,
Improvement, and Modernization Act of
2003 (the Medicare Modernization Act
or MMA) and would contain the rules
for determining when, based on income,
a monthly adjustment amount will be
added to a Supplementary Medical
Insurance (Medicare Part B)
beneficiary’s standard monthly
premium. These proposed rules
describe: what the new subpart is about;
what information we would use to
determine whether you would pay an
income-related monthly adjustment
amount and the amount of the
adjustment when applicable; when we
will consider a major life-changing
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event that results in a significant
reduction in your modified adjusted
gross income; and how you can appeal
our determination about your incomerelated monthly adjustment amount.
DATES: To be sure your comments are
considered, we must receive them by
May 2, 2006.
ADDRESSES: You may give us your
comments by: using our Internet facility
(i.e., Social Security Online) at https://
policy.ssa.gov/erm/rules.nsf/
Rules+Open+To+Comment or the
Federal eRulemaking Portal at https://
www.regulations.gov; e-mail to
regulations@ssa.gov; telefax to (410)
966–2830; or letter to the Commissioner
of Social Security, P.O. Box 17703,
Baltimore, MD 21235–7703. You may
also deliver them to the Office of
Regulations, Social Security
Administration, 100 Altmeyer Building,
6401 Security Boulevard, Baltimore, MD
21235–6401, between 8 a.m. and 4:30
p.m. on regular business days.
Comments are posted on our Internet
site or you may inspect them physically
on regular business days by making
arrangements with the contact person
shown in this preamble.
FOR FURTHER INFORMATION CONTACT:
Craig Streett, Team Leader, Office of
Income Security Programs, Social
Security Administration, 252 Altmeyer
Building, 6401 Security Boulevard,
Baltimore, MD 21235–6401, 410–965–
9793 or TTY 1–800–966–5609, for
information about this notice. For
information on eligibility or filing for
benefits, call our national toll-free
number, 1–800–772–1213 or TTY 1–
800–325–0778, or visit our Internet site,
Social Security Online, at https://
www.socialsecurity.gov.
SUPPLEMENTARY INFORMATION:
Electronic Version
The electronic file of this document is
available on the date of publication in
the Federal Register at https://
www.gpoaccess.gov/fr/.
Statutory Provisions
Section 811 of the MMA (Public Law
108–173), which was enacted into law
on December 8, 2003, added subsection
(i) to section 1839 of the Social Security
Act (the Act), and established a
Medicare Part B premium subsidy
reduction (referred to in these proposed
rules as ‘‘the income-related monthly
adjustment amount’’) effective January
1, 2007, which will be added to the
standard monthly Medicare Part B
premium amount for certain
beneficiaries. Section 1839(i) of the Act
was subsequently amended by section
5111 of the Deficit Reduction Act of
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2005, Public Law 109–171. The Centers
for Medicare & Medicaid Services
(CMS), in the Department of Health and
Human Services (HHS), has overall
responsibility for determining the
annual Medicare Part B standard
monthly premium amounts and
premium increases for late enrollment
or reenrollment. CMS regulations at 42
CFR part 408 describe the rules that
CMS uses to determine those amounts.
As explained in these proposed rules,
we are responsible only for making
initial determinations and
reconsiderations about income-related
monthly adjustment amounts. Any
subsequent levels of appeal will be
provided by HHS under its regulations
at 42 CFR part 405, subpart I.
Section 702(a)(5) of the Act allows us
to make the rules and regulations
necessary or appropriate to carry out the
functions of SSA. Other provisions in
section 811 of the MMA provide us with
additional specific authorization to
make rules and regulations to determine
the income-related monthly adjustment
amount. For example, sections
1839(i)(4)(B) and (i)(4)(C)(ii)(II) of the
Act authorize us to promulgate
regulations, in consultation with the
Secretary of the Treasury, necessary for
our determinations about incomerelated monthly adjustment amounts.
Section 1839 of the Act requires the
Secretary of HHS to annually determine
the Medicare Part B standard monthly
premium amount. Section 1839 of the
Act also authorizes the Secretary of HHS
to establish a premium increase for late
enrollment and for reenrollment under
certain circumstances and provide for a
limitation on increases in the Medicare
Part B standard monthly premium for
some beneficiaries.
The new section 1839(i) requires us to
determine the income-related monthly
adjustment amount for Medicare
beneficiaries with modified adjusted
gross income above an established
threshold. The income-related monthly
adjustment amount is added to the
Medicare Part B standard monthly
premium and any applicable premium
increase for late enrollment or
reenrollment. The MMA provides that
in 2007 the modified adjusted gross
income threshold is $80,000 for
individuals who file their Federal
income taxes with a filing status of
single and $160,000 for married
individuals who file a joint tax return.
Section 811(c)(1) of the MMA enacted a
new section 6103(1)(20) of the Internal
Revenue Code authorizing the Internal
Revenue Service (IRS) to provide certain
income information to us to use in
determining the income-related monthly
adjustment amount. The MMA requires
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that the threshold amount be adjusted
yearly based on the Consumer Price
Index.
Section 811(b)(1)(C) of the MMA also
amended section 1839(f) of the Act, so
that the limitation on increases in the
Medicare Part B standard monthly
premium for some beneficiaries will not
apply to beneficiaries who are
responsible for an income-related
monthly adjustment amount.
Background
Medicare Part B is a voluntary
program which provides medical
insurance coverage for medical and
health services such as physician
services, diagnostic services, and
medical supplies. Medicare Part B
beneficiaries are responsible for
deductibles, co-insurance and monthly
premiums towards the cost of covered
services. CMS promulgates rules and
regulations concerning the Medicare
program.
The Medicare Part B standard
monthly premium is set by CMS so that
it covers approximately 25 percent of
the Medicare Part B program costs.
Certain beneficiaries may also pay an
increased premium for late enrollment
in Medicare Part B or for reenrollment
after a period without coverage.
Approximately 75 percent of the full
cost of Medicare Part B is subsidized by
the Federal Government by
contributions to the Federal
Supplementary Medical Insurance Trust
Fund. In addition, for certain
beneficiaries whose premiums are
deducted from other payable Social
Security (or railroad retirement) benefit
amounts that they receive, the yearly
adjustment to the premium amount
cannot be raised more than the amount
of the cost-of-living adjustment for those
other benefits.
Starting in January 2007, the Medicare
Part B premium subsidy will be reduced
for an estimated 4 to 5 percent of the
approximately 40 million Medicare Part
B beneficiaries. Beneficiaries who had
modified adjusted gross income above
the threshold level set in the MMA in
the tax year 2 years prior to the year for
which we make a determination about
whether they must pay an incomerelated monthly adjustment amount (the
effective year) will receive a reduced
Federal subsidy of their Medicare Part B
premium. The reduction of the Federal
premium subsidy will result in
beneficiaries with modified adjusted
gross income above the threshold
paying more of the cost of their
Medicare Part B benefits through an
income-related monthly adjustment
amount that is added to the Medicare
Part B standard monthly premium plus
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any applicable premium increase for
late enrollment or reenrollment.
How This Affects You
Your modified adjusted gross income
is your adjusted gross income, as
defined at 26 U.S.C. 62 and in related
regulations, plus certain other forms of
income that may be excluded from
adjusted gross income for the purpose of
determining the amount of Federal
income tax that you must pay. The
MMA as amended by the Deficit
Reduction Act provides that the
payment of the full amount of the
income-related monthly adjustment
amount will be phased in starting in
2007 and will be completed in 2009. If
you must pay an income-related
monthly adjustment amount, you will
not be eligible for the limitation on
Medicare Part B standard monthly
premium increase beyond the amount of
your Social Security (or tier 1 railroad
retirement) cost-of-living adjustments,
as described in 42 CFR 408.20.
If you are a Medicare beneficiary prior
to January 1, 2007 and you will be
required to pay an income-related
monthly adjustment amount in 2007,
you will be notified at the end of 2006
about the additional amount of your
premium and any related changes in the
amount of your Social Security monthly
benefits or other payments from which
your premiums will be withheld
(railroad retirement or Civil Service
annuity payments). If you enroll in
Medicare Part B after January 1, 2007
and we determine that you must pay an
income-related monthly adjustment
amount for your Medicare Part B
coverage, you will be notified shortly
after you enroll in Medicare Part B. If
you are a Medicare beneficiary during
2007 or after, we will notify you prior
to the start of each year if you must pay
an income-related monthly adjustment
amount in that year.
How We Determine Your IncomeRelated Monthly Adjustment Amount
The amount of your modified
adjusted gross income will determine if
you are to pay an income-related
monthly adjustment. Section 1839(i)(2)
of the Act establishes the threshold for
modified adjusted gross income used to
determine if you are to pay an incomerelated monthly adjustment amount. In
2007, the modified adjusted gross
income threshold amount is $80,000 for
individuals who file their Federal
income tax return with a filing status of
single, married filing separately, head of
household, or qualifying widow(er) with
dependent child, and $160,000 for
individuals who file a joint income tax
return with their spouse.
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Section 1839(i)(4) of the Act requires
us to request information about your
modified adjusted gross income from
IRS in the Department of the Treasury
and to use this information to determine
if you must pay an income-related
monthly adjustment amount. We will
specify the tax year involved in our
information request. We will request
that IRS send us Federal income tax
return information about your modified
adjusted gross income for the tax year
which is 2 years before the effective
year. If modified adjusted gross income
information is not available from IRS for
the tax year 2 years before the effective
year of our determination, IRS will send
us your modified adjusted gross income
information for the tax year 3 years
before that year if it exceeds the
threshold. We will use information for
3 years prior to determine whether you
must pay an income-related monthly
adjustment amount only until
information for 2 years prior becomes
available.
If we use information from IRS for the
tax year 3 years before the effective year
of our determination, you may request
that we use information that you
provide for the tax year 2 years before
that year. We will use that information,
when you provide it to us, if that
information will result in a lower
income-related monthly adjustment
amount. In order for us to make an
initial determination based on such a
request, you must provide your retained
copy of your Federal income tax return
for that year, a copy that you request
from IRS, or an IRS transcript of your
return. If you provide your retained
copy, we will also verify this
information with IRS.
In some cases, IRS will not have data
to provide us regarding an individual’s
modified adjusted gross income because
the amount of the individual’s income
is below the level for which an income
tax return must be filed. We will not be
making income-related monthly
adjustment amount determinations in
such situations because this individual’s
income would also be below the
modified adjusted gross income
threshold. However, if we receive
information which indicates that an
individual who has not filed a tax return
has income which exceeds the
established threshold for an incomerelated monthly adjustment amount, we
will make such a determination. The
statute requires that we, in consultation
with the Secretary of the Treasury issue
regulations that ‘‘provide for the
treatment of the premium adjustment
with respect to such individual[s].’’ We
are consulting with the IRS to determine
if we can obtain information from IRS
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(or otherwise) on such non-filing
individuals. Since typically the IRS
does not collect and maintain the same
information for filers and non-filers,
SSA is requesting public comment on
this issue.
The Sliding Scale Formula and How It
Applies to You
Section 1839(i)(3) prescribes a sliding
scale formula that CMS will use to
establish annually four income-related
monthly adjustment amounts beginning
in 2007. The calculation of the incomerelated monthly adjustment amount
reduces a beneficiary’s Medicare Part B
premium subsidy using specified
percentages. The amount of this
premium subsidy reduction is the
income-related monthly adjustment
amount. To determine each incomerelated monthly adjustment amount,
CMS will use the unsubsidized
Medicare Part B premium
(approximately four times the Medicare
Part B standard monthly premium) and
multiply it by a specified percentage.
The percentage used in the calculation
increases as the amount of modified
adjusted gross income increases.
We use your modified adjusted gross
income and your Federal income tax
filing status (e.g., single, married filing
jointly, married filing separately) to
determine whether you must pay an
income-related monthly adjustment
amount and the amount of your incomerelated monthly adjustment amount.
Section 1839(i)(3)(C) provides the
modified adjusted gross income ranges.
The range amounts for individuals who
are married filing jointly are double the
range amounts for single income tax
filers. IRS recognizes three additional
filing statuses: Head of household,
qualifying widow(er) (26 U.S.C. 2) and
married filing separately. If you file as
a head of household or as a qualifying
widow(er), we will apply the modified
adjusted gross income range applicable
to individuals who file their Federal
income tax with a filing status of single.
Section 1839(i)(3)(C)(iii) provides for
the modified adjusted gross income
ranges for individuals who file their
Federal income tax return with a filing
status of married filing separately and
who also have lived with their spouse
at any time during the year to be
reduced by the threshold amount
established for that calendar year which
may result in a higher income-related
monthly adjustment amount for these
individuals. However, section 1839(i)(1)
provides a threshold amount (which is
$80,000 in 2007 but will change in
subsequent years due to indexing) that
is applicable to all income-related
monthly adjustment amount
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determinations. Thus, the lowest range
amount cannot be lower than the
threshold. For 2007, this results in the
following two ranges for married filing
separately: (1) $80,000 to less than or
equal to $120,000 and (2) More than
$120,000.
Starting in 2007 for calendar year
2008, and annually thereafter for each
following calendar year, CMS will
publish the annual modified adjusted
gross income ranges and income-related
monthly adjustment amounts that are
associated with each range. We will use
this published information to determine
which amount applies to you based on
your tax filing status in the tax year we
are using to determine your incomerelated monthly adjustment amount.
If you filed an amended tax return for
the tax year we used to make a
determination of your income-related
monthly adjustment amount, you may
request that we use your amended tax
return for that year. You must provide
us with proof that you filed an amended
tax return with IRS, including your
retained copy of the amended tax
return, and a letter from IRS verifying
receipt of the return or an IRS transcript
of your amended tax return. If you
believe that IRS provided incorrect
modified adjusted gross income
information and we used that
information to determine your incomerelated monthly adjustment amount,
you may request that we make a new
income-related monthly adjustment
amount determination. You must
provide proof of the error in the IRS
data and evidence of your actual
modified adjusted gross income, such as
a copy of the return that you obtain from
IRS. When we use information from
your amended or corrected Federal
income tax return to make a
determination, we will make retroactive
adjustments that will apply to all
months that you paid an incorrect
income-related monthly adjustment
amount.
Phase-In and Inflation Adjustment of
the Income-Related Monthly
Adjustment Amount
Section 1839(i)(3)(B) requires the
amount of the full income-related
monthly adjustment to be phased in
over a 3-year period beginning in 2007.
The effect is that from 2007 through
2009 the amount of the income-related
monthly adjustment amount will
increase, because the subsidy will
decrease. The percentage will change
each year so that the income-related
monthly adjustment amount will
gradually increase, until the full amount
is phased in starting in 2009.
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Beginning in 2008, section 1839(i)(5)
of the Act requires an annual inflation
adjustment for the threshold amount
and the amounts used in the modified
adjusted gross income ranges. The
adjustment will be based on the
percentage increase in the Consumer
Price Index for all urban consumers
rounded to the nearest $1,000. CMS will
publish these amounts annually.
Changes in Your Modified Adjusted
Gross Income
Section 1839(i)(4)(C) of the Act
requires us to establish procedures in
consultation with the Secretary of the
Treasury for determining your modified
adjusted gross income for a tax year
more recent than the information
ordinarily provided by IRS. The statute
states that we will grant your request to
use a more recent tax year to determine
your income-related monthly
adjustment amount only when:
• You experience a major lifechanging event;
• That major life-changing event
results in a significant reduction in your
modified adjusted gross income;
• You request that we use a more
recent tax year’s modified adjusted gross
income; and
• You provide evidence of the event
and the reduction in your modified
adjusted gross income.
These proposed rules describe the
standards that you must meet in order
for us to use a more recent tax year’s
modified adjusted gross income to
determine whether you must pay an
income-related monthly adjustment
amount and what the amount of your
income-related monthly adjustment
amount will be. In these proposed rules
we define qualifying major life-changing
events and what is a significant
reduction in your modified adjusted
gross income. We also specify the
evidence we will require of major lifechanging events and the resulting
reduction in your modified adjusted
gross income.
Section 1839(i)(4)(C)(ii)(II) specifies
that major life-changing events include
marriage, divorce, and death of a
spouse. Under that section, we have
discretion to include in regulations
additional major life-changing events
that would allow us to grant your
request that we use information from a
more recent tax year to determine your
income-related monthly adjustment
amount. In these rules we propose to
establish the following categories of
qualifying major life-changing events:
• Death of a spouse;
• Marriage;
• Divorce;
• Partial or full work stoppage;
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• Loss of income from incomeproducing property when the loss is not
at your direction, for example, loss of
income from real property due to a
natural disaster in a Presidentially or
Gubernatorially-declared disaster area,
or due to arson, or destruction of
livestock or crops; and
• Reduction or loss of certain forms of
pension income due to termination or
reorganization of the pension plan, or a
scheduled cessation of your pension
benefits.
We have included these additional
categories of major life-changing events
because we recognize that these events
may cause a significant reduction in
your modified adjusted gross income.
We will include losses in pension
income that occur due to events outside
of your control, such as underfunding
that results in a termination of the plan,
but not due to your choices about
funding an employee-directed pension
plan. The statute does not authorize us
to define as major life-changing events
circumstances that affect your expenses,
but not your income.
We propose to define a significant
reduction in your modified adjusted
gross income as any change that results
in a reduction or elimination of your
income-related monthly adjustment
amount. Section 1839(i)(4)(C)(ii)
provides that we may grant your request
to use a more recent tax year’s modified
adjusted gross income to determine your
income-related monthly adjustment
amount only if you provide us with a
copy of a filed Federal income tax
return or equivalent document. These
proposed rules define the evidence that
we will consider to be equivalent to a
copy of a filed Federal income tax
return.
When we make an income-related
monthly adjustment amount
determination based on your request
due to a qualifying major life-changing
event, the determination will generally
be effective on January 1 of the calendar
year for which we make the
determination. If you enrolled in
Medicare Part B after January 1 of the
year for which we make an incomerelated monthly adjustment amount
determination based on your request
due to a major life-changing event, the
determination will be effective the
month of your Medicare Part B
enrollment.
When we make an income-related
monthly adjustment amount
determination following a major lifechanging event using your more recent
tax year’s modified adjusted gross
income, we will continue trying to get
IRS data for that tax year. When we
receive modified adjusted gross income
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information from IRS for that tax year,
we will use the information from IRS to
determine the correct income-related
monthly adjustment amount for the year
or years for which we used information
that you provided, and we will make
retroactive adjustments, if necessary.
Retroactive adjustments will apply to all
months for which you paid an incorrect
income-related monthly adjustment
amount.
If You Disagree With Our
Determination of Your Income-Related
Monthly Adjustment Amount
We will decide whether you must pay
an income-related monthly adjustment,
and the amount of any adjustment,
based on information we receive from
IRS or you. We will send you a notice
of our initial determination of your
income-related monthly adjustment
amount and the basis for our
determination. The notice will explain
that, if you disagree with our
determination, you may request that we
reconsider it within 60 days after the
date you receive notice of our initial
determination. The notice will also
explain that you may request a new
initial determination, rather than a
reconsideration, if you believe the
information we used in our initial
determination was correct, but you want
us to use different information about
your modified adjusted gross income.
For purposes of this subpart, in
making initial determinations and
reconsiderations, we will use the rules
for the administrative review process
that we use for determinations of your
rights regarding nonmedical issues
under title II of the Act. These are the
same rules that we use when making
initial determinations and
reconsiderations regarding applications
for and entitlement to Medicare benefits
under 42 CFR 405.904(a)(1). If you are
dissatisfied with our reconsideration,
you may request further review,
including a hearing before an
administrative law judge from the Office
of Medicare Hearings and Appeals
(OMHA) at HHS, review by the
Medicare Appeals Council (MAC), and
judicial review, consistent with the
CMS regulations at 42 CFR part 405,
subpart I. As part of your request for an
administrative law judge hearing or
MAC review, you will be required to
provide your consent to HHS for us to
release your relevant tax return
information to OMHA or the MAC for
the purposes of adjudicating any appeal
of the amount of an income-related
adjustment to the Part B premium
subsidy and for any judicial review of
that appeal.
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We propose to establish a new
procedure, a request for a new initial
determination, that you may use when
you do not dispute the accuracy of the
IRS modified adjusted gross income
information we used, or the
determination we made based on that
information, but you want us to use
different information. You may provide
evidence of your modified adjusted
gross income for a more recent tax year
than the information provided by IRS
when you have had a major lifechanging event that significantly
reduces your income or when IRS has
provided modified adjusted gross
income information from 3 years prior
to the premium effective year and you
supply your retained copy of your
Federal income tax return for the tax
year 2 years prior. You may also request
that we make a new initial
determination when you have amended
your Federal income tax return or when
you can furnish proof that IRS has
provided incorrect information about
your modified adjusted gross income for
the year that we used to determine your
income-related monthly adjustment
amount.
We propose to establish this
alternative procedure in view of the
nature of the information that we are
required by the MMA to use in making
determinations regarding the incomerelated monthly adjustment amount. We
anticipate that the use of this new
procedure will allow us to make timely
adjustments when you have updated
information about your modified
adjusted gross income, or when you can
prove the IRS information we used is
incorrect. This process does not affect
your right to appeal any initial
determination that we make about your
income-related monthly adjustment
amount, but allows you to choose an
alternative of requesting that we use
other information to make a new initial
determination.
Explanation of Proposed Subpart B
We propose to add a new subpart B,
Medicare Part B Income-Related
Monthly Adjustment Amount, to part
418 of chapter III of title 20 of the Code
of Federal Regulations. Proposed
subpart B would contain the rules that
we will use to determine when you will
be required to pay an income-related
monthly adjustment amount in addition
to your Medicare Part B standard
monthly premium plus any applicable
premium increase for late enrollment or
reenrollment. Following is a description
of each section for proposed subpart B.
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Introduction, General Provisions, and
Definitions
• Section 418.1001 describes what
subpart B is about, lists the groups of
sections in the subpart, and the subject
of each group.
• Section 418.1005 explains that the
purpose of the income-related monthly
adjustment amount is to reduce the
premium subsidy of the Medicare Part
B program, i.e., the amount of the
Federal Government’s contribution to
the Federal Supplementary Medical
Insurance Trust Fund, for certain
beneficiaries.
• Section 418.1010 contains
definitions of terms used throughout
this subpart.
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Determination of the Income-Related
Monthly Adjustment Amount
• Section 418.1101 explains what the
income-related monthly adjustment
amount is and when it is applied.
• Section 418.1105 defines the
modified adjusted gross income
threshold and what the modified
adjusted gross income threshold
amounts will be in the year 2007. It also
describes how threshold amounts will
change in later years.
• Section 418.1110 defines modified
adjusted gross income ranges and
explains how we will use them and
your tax filing status to determine the
amount of your income-related monthly
adjustment amount when applicable,
and what effect Federal income tax
filing status has on the ranges.
• Section 418.1115 explains how we
will determine your income-related
monthly adjustment amount.
• Section 418.1120 describes the
effective date of our initial
determination about the income-related
monthly adjustment amount.
• Section 418.1125 explains how the
income-related monthly adjustment
amount will affect your total Medicare
Part B premium.
• Section 418.1130 explains how we
will phase in the full applicable incomerelated monthly adjustment amounts.
• Section 418.1135 describes what
modified adjusted gross income
information we will use to determine
your income-related monthly
adjustment amount.
• Section 418.1140 describes what
will happen if the modified adjusted
gross income that we later receive from
IRS is different from the information
that we previously used to make a
determination of your income-related
monthly adjustment amount.
• Section 418.1145 describes how we
will determine the income-related
monthly adjustment amount if IRS does
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not provide your modified adjusted
gross income information.
• Section 418.1150 describes when
we will use a copy of your amended
Federal income tax return filed with IRS
to determine the income-related
monthly adjustment amount and what
proof is necessary to show that you filed
a tax return with IRS.
Determinations Using a More Recent
Tax Year’s Modified Adjusted Gross
Income
• Section 418.1201 explains when we
will use modified adjusted gross income
information for a more recent tax year
to determine your income-related
monthly adjustment amount.
• Section 418.1205 describes what is
considered a major life-changing event
that would justify using information
from a more recent tax year.
• Section 418.1210 explains what is
not considered a major life-changing
event that would justify using
information from a more recent tax year.
• Section 418.1215 explains which
more recent tax years we may use to
determine whether you must pay an
income-related monthly adjustment
amount and the amount of that
adjustment.
• Section 418.1220 outlines what
evidence we will consider when you
request that we use information that you
provide about your modified adjusted
gross income for a more recent tax year
to determine your income-related
monthly adjustment amount.
• Section 418.1225 describes what
evidence of a major life-changing event
you will need to provide to support
your request to use a more recent tax
year.
• Section 418.1230 describes what
evidence of a significant reduction in
your modified adjusted gross income
you will need to provide to support
your request to use a more recent tax
year.
• Section 418.1235 explains the
effective date of our income-related
monthly adjustment amount
determination based on your request to
use a more recent tax year.
• Section 418.1240 explains when we
will stop using your modified adjusted
gross income from a more recent tax
year for income-related monthly
adjustment amount determinations.
• Section 418.1245 explains what you
should do if your modified adjusted
gross income for the more recent tax
year changes.
• Section 418.1250 explains what
will happen if you notify us of a change
in your modified adjusted gross income
for the more recent tax year.
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Determinations and the Administrative
Review Process
• Section 418.1301 explains what is
an initial determination regarding your
income-related monthly adjustment,
and provides examples of
determinations that are initial
determinations for purposes of these
rules.
• Section 418.1303 explains that
administrative actions that are not
initial determinations are not subject to
the administrative review process.
• Section 418.1305 explains how we
will notify you when we make an initial
determination, and what information
the notice will contain.
• Section 418.1310 explains the effect
of the initial determination.
• Section 418.1315 explains when
you may request a reconsideration.
• Section 418.1320 explains when
you may request that we make a new
initial determination.
• Section 418.1325 tells you the rules
for the administrative review process.
• Section 418.1330 tells you the rules
we will use to decide if reopening a
prior determination or decision is
appropriate.
• Section 418.1335 explains what
will happen if you request a
reconsideration because you believe that
IRS information we used to make an
initial determination about your
income-related monthly adjustment
amount is incorrect.
• Section 418.1340 explains what to
do if you believe our initial
determination is based on incorrect
modified adjusted gross income
information.
Clarity of These Proposed Rules
Executive Order 12866, as amended
by Executive Order 13258, requires each
agency to write all rules in plain
language. In addition to comments you
may have on these proposed rules, we
also invite your comments on how to
make the rules easier to understand. For
example:
• Have we organized the material to
suit your needs?
• Are the requirements in the rules
clearly stated?
• Do the rules contain technical
language or jargon that is not clear?
• Would a different format (grouping
and order of sections, use of headings,
paragraphing) make the rules easier to
understand?
• Would more (but shorter) sections
be better?
• Could we improve clarity by adding
tables, lists, or diagrams?
• What else could we do to make the
rules easier to understand?
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Regulatory Procedures
Executive Order 12866
We have consulted with the Office of
Management and Budget (OMB) and
determined that these proposed rules
meet the criteria for an ‘‘economically
significant’’ regulatory action under
Executive Order 12866, as amended by
Executive Order 13258. Thus they were
reviewed by OMB.
These proposed rules provide the
implementing rules for the incomerelated premium calculation enacted as
part of MMA. The legislative provision
is expected to result in an overall
savings to the Medicare Supplementary
Medical Insurance Trust Fund of
roughly $7.7 billion over the period of
fiscal years 2007–2011. The following
chart shows the total savings in millions
for each program year.
Accounting Statement
As required by OMB Circular A–4
(available at https://
www.whitehouse.gov/omb/circulars/
Fiscal year
Total savings
a004/a-4.pdf), in the following table
2007 ......................................
490 (Table 1) we have prepared an
2008 ......................................
1,180
accounting statement showing the
2009 ......................................
1,860
2010 ......................................
2,060 classification of the expenditures
2011 ......................................
2,150 associated with the provisions of these
proposed rules. This table provides our
Total: 2007–2011 ..........
7,740 best estimate of the increase in premium
payments as a result of the changes to
In addition, the process of
the Part B program presented in these
determining the additional premiums
proposed rules. All expenditures are
will result in an increase in
classified as transfers to the SMI Trust
administrative expenses incurred by
SSA in the amount of $200 million over Fund.
that same 5-year period.
TABLE 1.—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED SAVINGS
[In millions]
Category
Transfers
Annualized Monetized Transfers ..............................................................
From Whom to Whom? ............................................................................
$1,370.
Certain High-Income Medicare Part B Beneficiaries to the Medicare
SMI Trust Fund.
Regulatory Flexibility Act
We certify that these proposed rules
will not have a significant economic
impact on a substantial number of small
entities as they affect individuals only.
Therefore, a regulatory flexibility
analysis as provided in the Regulatory
Flexibility Act, as amended, is not
required for these proposed rules.
Paperwork Reduction Act
These proposed rules contain
reporting requirements as shown in the
following table. Where the public
Annual
number of
respondents
Section
reporting burden is accounted for in
Information Collection Requests for the
various forms that the public uses to
submit the information to SSA, a 1-hour
placeholder burden is being assigned to
the specific reporting requirement(s)
contained in these rules.
Average
burden per
response
(minutes)
Frequency of
response
Estimated
annual burden
(hours)
104,725
300
1
1
30
30
52,363
150
........................
42,260
6,698
200
........................
1
1
1
........................
30
30
30
1
21,130
3,349
100
Total ..........................................................................................................
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§ 418.1135(c)–(e), § 418.1140(b)–(d), § 418.1320(a)(1)–(2) ...........................
§ 418.1150, § 418.1320(a)(2) ...........................................................................
§ 418.1005(c), § 418.1201, § 418.1215, § 418.1220, § 418.1225, § 418.1230,
§ 418.1320(a)(4) ...........................................................................................
§ 418.1240(c)–d, § 418.1245, § 418.1250 ........................................................
§ 418.1310, § 418.1315 ....................................................................................
§ 418.1340 .......................................................................................................
154,183
........................
........................
77,093
An Information Collection Request
has been submitted to OMB for
clearance. We are soliciting comments
on the burden estimate; the need for the
information; its practical utility; ways to
enhance its quality, utility, and clarity;
and on ways to minimize the burden on
respondents, including the use of
automated collection techniques or
other forms of information technology.
Comments should be submitted and/or
faxed to OMB and SSA at the following
addresses/numbers:
Number: 202–395–6974.
Social Security Administration, Attn:
SSA Reports Clearance Officer, Rm.
1338 Annex Building, 6401 Security
Boulevard, Baltimore, MD 21235–
6401. Fax Number: 410–965–6400.
Office of Management and Budget,
Attn: Desk Officer for SSA, Fax
(Catalog of Federal Domestic Assistance
Program Nos. 93.773, Medicare—Hospital
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Comments can be received for up to
60 days after publication of this notice
and will be most useful if received
within 30 days of publication. To
receive a copy of the OMB clearance
package, you may call the SSA Reports
Clearance Officer at 410–965–0454.
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Insurance and 93.774, Medicare—
Supplementary Medical Insurance Program)
List of Subjects in 20 CFR Part 418
Administrative practice and
procedure, Aged, Blind, Disability
benefits, Public assistance programs,
Reporting and recordkeeping
requirements, Supplemental Security
Income (SSI), Medicare subsidies.
Dated: February 27, 2006.
Jo Anne B. Barnhart,
Commissioner of Social Security.
For the reasons set out in the
preamble, we propose to add a new
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amount initial determination that is
based on a more recent tax year?
418.1240 When will we stop using your
more recent tax year’s modified adjusted
gross income to determine your incomerelated monthly adjustment amount?
418.1245 Should you notify us if your
modified adjusted gross income for the
more recent tax year changes?
418.1250 What will happen if you notify us
that your modified adjusted gross
income for the more recent tax year
changes?
subpart B to part 418 of chapter III of
title 20 of the Code of Federal
Regulations as follows:
PART 418—MEDICARE SUBSIDIES
Subpart B—Medicare Part B IncomeRelated Monthly Adjustment Amount
Introduction, General Provisions, and
Definitions
Sec.
418.1001 What is this subpart about?
418.1005 Purpose and administration.
418.1010 Definitions.
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Determination of the Income-Related
Monthly Adjustment Amount
418.1101 What is the income-related
monthly adjustment amount?
418.1105 What is the threshold?
418.1110 What are the modified adjusted
gross income ranges?
418.1115 How do we determine your
income-related monthly adjustment
amount?
418.1120 What is the effective date of our
initial determination about your incomerelated monthly adjustment amount?
418.1125 How will the income-related
monthly adjustment amount affect your
total Medicare Part B premium?
418.1130 How will we phase in the incomerelated monthly adjustment amount?
418.1135 What modified adjusted gross
income information will we use to
determine your income-related monthly
adjustment amount?
418.1140 What will happen if the modified
adjusted gross income information from
IRS is different from the modified
adjusted gross income information we
used to determine your income-related
monthly adjustment amount?
418.1145 How do we determine your
income-related monthly adjustment
amount if IRS does not provide
information about your modified
adjusted gross income?
418.1150 When will we use your amended
tax return filed with IRS?
Determinations Using a More Recent Tax
Year’s Modified Adjusted Gross Income
418.1201 When will we determine your
income-related monthly adjustment
amount based on the modified adjusted
gross income information that you
provide for a more recent tax year?
418.1205 What is a major life-changing
event?
418.1210 What is not a major life-changing
event?
418.1215 What more recent tax year will we
use?
418.1220 What evidence will you need to
support your request for us to use a more
recent tax year?
418.1225 What kind of major life-changing
event evidence will you need to support
your request?
418.1230 What kind of significant modified
adjusted gross income reduction
evidence will you need to support your
request?
418.1235 What is the effective date of an
income-related monthly adjustment
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Determinations and the Administrative
Review Process
418.1301 What is an initial determination
regarding your income-related monthly
adjustment amount?
418.1303 What is not an initial
determination regarding your incomerelated monthly adjustment amount?
418.1305 How will we notify you and what
information will we provide about our
initial determination?
418.1310 What is the effect of an initial
determination?
418.1315 When may you request a
reconsideration?
418.1320 When may you request that we
make a new initial determination?
418.1325 What are the rules for the
administrative review process?
418.1330 Is reopening of a determination or
decision ever appropriate?
418.1335 Can you request a reconsideration
when you believe the IRS information
we used is incorrect?
418.1340 What should you do if our initial
determination is based on modified
adjusted gross income information you
believe to be incorrect?
Subpart B—Medicare Part B IncomeRelated Monthly Adjustment Amount
Authority: Secs. 702(a)(5) and 1839(i) of
the Social Security Act (42 U.S.C. 902(a)(5)
and 1395r(i)).
Introduction, General Provisions, and
Definitions
§ 418.1001
What is this subpart about?
This subpart relates to section 1839(i)
of the Social Security Act (the Act), as
added by section 811 of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003 (Pub. L. 108–
173). Section 1839(i) establishes an
income-related monthly adjustment to
the Medicare Part B premium.
Beneficiaries enrolled in Medicare Part
B who have modified adjusted gross
income over a threshold amount
established in the statute will pay an
income-related monthly adjustment
amount in addition to the Medicare Part
B standard monthly premium and any
applicable premium increases as
described in 42 CFR 408.20. The
regulations in this subpart explain how
we decide whether you are required to
pay an income-related monthly
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adjustment amount and the amount of
your adjustment. The rules are divided
into the following groups of sections:
(a) Sections 418.1001 through
418.1010 contain the introduction, a
statement of the general purpose of the
income-related monthly adjustment
amount, general provisions that apply to
the income-related monthly adjustment
amount, and definitions of terms that
we use in this subpart.
(b) Sections 418.1101 through
418.1150 describe what information
about your modified adjusted gross
income we will use to determine if you
are required to pay an income-related
monthly adjustment amount. In these
sections, we also describe how the
income-related monthly adjustment
amount will affect your total Medicare
Part B premium. These sections also
explain how the income-related
monthly adjustment amount will be
phased in from calendar year 2007
through calendar year 2009.
(c) Sections 418.1201 through
418.1250 contain an explanation of the
standards that you must meet for us to
grant your request to use modified
adjusted gross income information that
you provide for a more recent tax year
rather than the information described in
paragraph (b) of this section. These
sections explain when we may consider
such a request, and the evidence that
you will be required to provide. These
sections also explain when incomerelated monthly adjustment amount
determinations based on information
you provide will be effective, and how
long they will remain in effect.
Additionally, these sections describe
how retroactive adjustments of the
income-related monthly adjustment
amount will be made based on
information you provide, updated
information you provide and
information we later receive from the
Internal Revenue Service (IRS).
(d) Sections 418.1301 through
418.1340 contain the rules that we will
apply when you disagree with our
determination regarding your incomerelated monthly adjustment amount.
These sections explain your appeal
rights and the circumstances under
which you may request that we make a
new initial determination of your
income-related monthly adjustment
amount.
§ 418.1005
Purpose and administration.
(a) The purpose of the income-related
monthly adjustment amount is to reduce
the Federal subsidy of the Medicare Part
B program for beneficiaries with
modified adjusted gross income above
an established threshold. These
beneficiaries will pay a greater share of
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actual program costs. Medicare Part B
premiums paid by beneficiaries cover
approximately 25 percent of total
Medicare Part B program costs and the
remaining 75 percent of program costs
are subsidized by the Federal
Government’s contributions to the
Federal Supplementary Medical
Insurance Trust Fund. The reduction in
the Medicare Part B premium subsidy
results in an increase in the total
amount that affected beneficiaries pay
for Medicare Part B coverage. A
beneficiary with modified adjusted
gross income above the threshold
amount will pay:
(1) The Medicare Part B standard
monthly premium; plus
(2) Any applicable increase in the
standard monthly premium for late
enrollment or reenrollment; plus
(3) An income-related monthly
adjustment amount.
(b) The Centers for Medicare &
Medicaid Services (CMS) in the
Department of Health and Human
Services (HHS) publishes the Medicare
Part B standard monthly premium each
year. CMS also establishes rules for
entitlement to a nonstandard premium,
as well as premium penalties for late
enrollment or reenrollment (42 CFR
408.20 through 408.27).
(c) We use information that we get
from IRS to determine if beneficiaries
who are enrolled in Medicare Part B are
required to pay an income-related
monthly adjustment amount. We also
change income-related monthly
adjustment amount determinations
using information provided by a
beneficiary under certain circumstances.
In addition, we notify beneficiaries
when the social security benefit
amounts they receive will change based
on our income-related monthly
adjustment amount determination.
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§ 418.1010
Definitions.
(a) Terms relating to the Act and
regulations. For the purposes of this
subpart:
(1) Administrator means the
Administrator of the Centers for
Medicare & Medicaid Services (CMS).
(2) CMS means the Centers for
Medicare & Medicaid Services in the
Department of Health and Human
Services.
(3) Commissioner means the
Commissioner of Social Security.
(4) IRS means the Internal Revenue
Service in the Department of the
Treasury.
(5) Section means a section of the
regulations in this part unless the
context indicates otherwise.
(6) The Act means the Social Security
Act, as amended.
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(7) Title means a title of the Act.
(8) We, our, or us means the Social
Security Administration (SSA).
(b) Miscellaneous. For the purposes of
this subpart:
(1) Amended tax return means a
Federal income tax return for which an
amended tax return using the required
IRS form(s) has been filed by an
individual or couple and accepted by
IRS.
(2) Effective year means the calendar
year for which we make an incomerelated monthly adjustment amount
determination.
(3) Federal premium subsidy is the
portion of the full cost of providing
Medicare Part B coverage that is paid by
the Federal Government through
transfers into the Federal
Supplementary Medical Insurance Trust
Fund.
(4) Income-related monthly
adjustment amount is an additional
amount of premium that you will pay
for Medicare Part B coverage if you have
income above the threshold. The
amount of your income-related monthly
adjustment amount is based on your
modified adjusted gross income.
(5) Medicare Part B standard monthly
premium means the monthly Medicare
Part B premium amount which is set
annually by CMS, according to
regulations in 42 CFR 408.20 through
408.27.
(6) Modified adjusted gross income is
your adjusted gross income as defined
by the Internal Revenue Code, plus the
following forms of tax-exempt income:
(i) Tax-exempt interest income;
(ii) Income from United States savings
bonds used to pay higher education
tuition and fees;
(iii) Foreign earned income;
(iv) Income derived from sources
within Guam, American Samoa, or the
Northern Mariana Islands; and
(v) Income from sources within Puerto
Rico.
(7) Modified adjusted gross income
ranges are the four bands of modified
adjusted gross income above the
threshold. The dollar amounts of the
modified adjusted gross income ranges
are specified in § 418.1110.
(8) Non-standard premium means a
Medicare Part B premium that some
beneficiaries pay for Medicare Part B,
rather than the standard premium. The
rules for applying a non-standard
premium are in 42 CFR 408.20(e). The
non-standard premium does not apply
to beneficiaries who must pay an
income-related monthly adjustment
amount.
(9) Premium is a payment that an
enrolled beneficiary pays for Medicare
Part B coverage. The rules that CMS
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10933
uses to annually establish the premium
amount are found in 42 CFR 408.20
through 408.27.
(10) Representative means an
individual as defined in § 404.1703 of
this chapter.
(11) Tax filing status means the filing
status shown on your individual income
tax return. It may be single, married
filing jointly, married filing separately,
head of household, or qualifying
widow(er) with dependent child.
(12) Threshold means a modified
adjusted gross income amount above
which the beneficiary will have to pay
an income-related monthly adjustment
amount described in paragraph (b)(3) of
this section. The dollar amount of the
threshold is specified in § 418.1105.
(13) You or your means the person or
representative of the person who is
subject to the income-related monthly
adjustment amount.
Determination of the Income-Related
Monthly Adjustment Amount
§ 418.1101 What is the income-related
monthly adjustment amount?
(a) The income-related monthly
adjustment amount is an amount that
you will pay in addition to the Medicare
Part B standard monthly premium plus
any applicable increase in that premium
as described in 42 CFR 408.22 for your
Medicare Part B coverage when your
modified adjusted gross income is above
the threshold described in § 418.1105.
(b) Your income-related monthly
adjustment amount is based on your
applicable modified adjusted gross
income as described in § 418.1110 and
your tax filing status.
(c) We will determine your incomerelated monthly adjustment amount
using the method described in
§ 418.1115 and § 418.1130.
§ 418.1105
What is the threshold?
(a) The threshold is a level of
modified adjusted gross income above
which the beneficiary will have to pay
the income-related monthly adjustment
amount.
(b) In 2007, the modified adjusted
gross income threshold is $80,000 for
individuals with a Federal income tax
filing status of single, married filing
separately, head of household, and
qualifying widow(er) with dependent
child. The threshold is $160,000 for
individuals with a Federal income tax
filing status of married filing jointly.
(c) Starting at the end of calendar year
2007 and each year thereafter, the
threshold amounts for the following
year will be set by CMS by increasing
the preceding year’s threshold amount
by the percentage increase in the
Consumer Price Index rounded to the
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nearest $1,000. CMS will publish the
threshold amounts annually in
September in the Federal Register.
Published threshold amounts will be
effective January 1 of the next calendar
year, for the full calendar year.
§ 418.1110 What are the modified adjusted
gross income ranges?
(a) The 2007 modified adjusted gross
income ranges for each Federal tax filing
category are listed in paragraphs (b), (c)
and (d) of this section. We will use your
modified adjusted gross income amount
together with your tax filing status to
determine the amount of your incomerelated monthly adjustment.
(b) In 2007, the modified adjusted
gross income ranges for individuals
with a Federal tax filing status of single,
head of household, qualifying
widow(er) with dependent child, and
married filing separately when the
individual has lived apart from his/her
spouse for the entire tax year for the
year we use to make our income-related
monthly adjustment amount
determination are as follows:
(1) Greater than $80,000 and less than
or equal to $100,000;
(2) Greater than $100,000 and less
than or equal to $150,000;
(3) Greater than $150,000 and less
than or equal to $200,000; and
(4) Greater than $200,000.
(c) In 2007, the modified adjusted
gross income ranges for individuals who
are married and filed a joint tax return
for the tax year we use to make the
income-related monthly adjustment
amount determination are as follows:
(1) Greater than $160,000 and less
than or equal to $200,000;
(2) Greater than $200,000 and less
than or equal to $300,000;
(3) Greater than $300,000 and less
than or equal to $400,000; and
(4) Greater than $400,000.
(d) In 2007, the modified adjusted
gross income ranges for married
individuals who file a separate return
and have lived with their spouse at any
time during the tax year we use to make
the income-related monthly adjustment
amount determination are as follows:
(1) Greater than $80,000 and less than
or equal to $120,000; and
(2) Greater than $120,000.
(e) CMS will annually revise the
modified adjusted gross income ranges
and publish them in the Federal
Register starting in September of 2007
for 2008. Each year thereafter, all
modified adjusted gross income range
amounts will be set by CMS by
increasing the preceding year’s modified
adjusted gross income range amounts by
any percentage increase in the
Consumer Price Index rounded to the
nearest $1,000, and CMS will publish
the amounts for the following year in
September of each year.
§ 418.1115 How do we determine your
income-related monthly adjustment
amount?
(a) We will determine your incomerelated monthly adjustment amount
using your tax filing status and modified
adjusted gross income.
(b) Tables of applicable percentage.
The tables in paragraphs (b)(1) through
(b)(3) of this section contain the
modified adjusted gross income ranges
for 2007 in the column on the left in
each table. The middle column in each
table shows the percentage of the
unsubsidized Medicare Part B premium
that will be paid by individuals with
modified adjusted gross income that
falls within each of the ranges. The
column on the right in each table shows
the percentage of the unsubsidized
Medicare Part B premium that will be
subsidized by the Federal
Supplementary Medical Insurance Trust
Fund. Based on your tax filing status for
the tax year we use to make a
determination about your incomerelated monthly adjustment amount, we
will determine which table is applicable
to you. We will use your modified
adjusted gross income to determine
which income-related monthly
adjustment amount to apply to you. The
dollar amount of income-related
monthly adjustment for each range will
be set annually as described in
paragraph (c) of this section. The
modified adjusted gross income ranges
will be adjusted annually as described
in § 418.1110(e).
(1) General table of applicable
percentages. If your filing status for your
Federal income taxes for the tax year we
use is single; head of household;
qualifying widow(er) with dependent
child; or married filing separately and
you lived apart from your spouse for the
entire tax year, we will use the general
table of applicable percentages. When
your modified adjusted gross income for
the year we use is in the range listed in
the left column in the following table,
then the Federal Supplementary
Medical Insurance Trust Fund premium
subsidy of 75 percent is reduced to the
percentage listed in the right column.
You will pay an amount based on the
percentage listed in the center column.
Beneficiary
premium
(percent)
Modified adjusted gross income effective in 2007
More
More
More
More
than
than
than
than
$80,000 but less than or equal to $100,000 ......................................................................................
$100,000 but less than or equal to $150,000 ....................................................................................
$150,000 but less than or equal to $200,000 ....................................................................................
$200,000 .............................................................................................................................................
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(2) Table of applicable percentages for
joint returns. If your Federal tax filing
status is married filing jointly for the tax
year we use and your modified adjusted
gross income for that tax year is in the
range listed in the left column in the
following table, then the Federal
Supplementary Medical Insurance Trust
Fund premium subsidy of 75 percent is
reduced to the percentage listed in the
35
50
65
80
Beneficiary
premium
(percent)
More than $160,000 but less than or equal to $200,000 ....................................................................................
More than $200,000 but less than or equal to $300,000 ....................................................................................
More than $300,000 but less than or equal to $400,000 ....................................................................................
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65
50
35
20
right column. You will pay an amount
based on the percentage listed in the
center column.
Modified adjusted gross income effective in 2007
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Federal
premium
subsidy
(percent)
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50
65
Federal
premium
subsidy
(percent)
65
50
35
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Beneficiary
premium
(percent)
Modified adjusted gross income effective in 2007
More than $400,000 .............................................................................................................................................
(3) Table of applicable percentages for
married individuals filing separate
returns. If your Federal tax filing status
for the tax year we use is married filing
separately and you lived with your
spouse at some time during that tax
year, and your modified adjusted gross
income is in the range listed in the left
column in the following table, then the
Federal Supplementary Medical
80
Beneficiary
premium
(percent)
More than $80,000 but less than or equal to $120,000 ......................................................................................
More than $120,000 .............................................................................................................................................
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§ 418.1120 What is the effective date of our
initial determination about your incomerelated monthly adjustment amount?
(a) Generally, an income-related
monthly adjustment amount will be
effective for all months that you are
enrolled in Medicare Part B during the
year for which we determine you must
pay an income-related monthly
adjustment amount. We will follow the
rules in 42 CFR part 408, subpart C,
regarding premium collections to
withhold your income-related monthly
adjustment amount from a benefit
payment or to determine if you will be
billed directly.
(b) When we have used modified
adjusted gross income information from
IRS for the tax year 3 years prior to the
effective year to determine your incomerelated monthly adjustment amount and
modified adjusted gross income
information for the tax year 2 years prior
later becomes available from IRS, we
will review the new information to
determine if we should revise our initial
determination. If we revise our initial
determination, the effective date of the
new initial determination will be
January 1 of the effective year, or the
first month you were enrolled or reenrolled in Medicare Part B if later than
January.
(c) When we use your amended tax
return, as described in § 418.1150, the
effective date will be January 1 of the
year(s) that is affected, or the first month
in that year that you were enrolled or
reenrolled in Medicare Part B if later
than January.
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Example: You are enrolled in Medicare
Part B throughout 2011. We use your 2009
modified adjusted gross income as reported
to us by IRS to determine your 2011 incomerelated monthly adjustment amount. In 2012
you submit to us a copy of your 2009
amended tax return that you filed with IRS.
The modified adjusted gross income reported
on your 2009 amended tax return is
significantly less than originally reported to
IRS. We use the modified adjusted gross
income that was reported on your 2009
amended tax return to determine your
income-related monthly adjustment amount.
That income-related monthly adjustment
amount is effective January 1, 2011. We will
retroactively adjust for any differences
between the amount paid in 2011 and the
amount that should have been paid based on
the amended tax return.
(d) When we use evidence that you
provide which proves that the IRS
modified adjusted gross income
information we used is incorrect, as
described in § 418.1340, the effective
date will be January of the year(s) that
is affected or the first month in that year
that you were enrolled or reenrolled in
Medicare Part B if later than January.
(e) When we use information from a
more recent tax year that you provide
due to a major life-changing event, as
described in § 418.1201, the effective
date is described in § 418.1235.
§ 418.1125 How will the income-related
monthly adjustment amount affect your
total Medicare Part B premium?
(a) If you must pay an income-related
monthly adjustment amount, your total
Medicare Part B premium will be the
sum of:
(1) The Medicare Part B standard
monthly premium, determined using
the rules in 42 CFR 408.20; plus
(2) Any applicable increase in the
Medicare Part B standard monthly
premium as described in 42 CFR 408.22;
plus
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20
Insurance Trust Fund premium subsidy
of 75 percent is reduced to the
percentage listed in the right column.
You will pay an amount based on the
percentage listed in the center column.
Modified adjusted gross income effective in 2007
(c) CMS will annually publish in the
Federal Register the dollar amounts for
the income-related monthly adjustment
amount described in paragraph (b) of
this section.
Federal
premium
subsidy
(percent)
Federal
premium
subsidy
(percent)
65
80
35
20
(3) Your income-related monthly
adjustment amount.
(b) In 2007 and 2008, your incomerelated monthly adjustment amount you
must pay will be adjusted as described
in § 418.1130.
(c) The nonstandard Medicare Part B
premium amount described in 42 CFR
408.20 does not apply to individuals
who must pay an income-related
monthly adjustment amount. Such
individuals must pay the full Medicare
Part B standard monthly premium plus
any applicable penalties for late
enrollment or reenrollment plus the
income-related adjustment.
§ 418.1130 How will we phase in the
income-related monthly adjustment
amount?
(a) In 2007 and 2008, we will phase
in the full amount of the income-related
monthly adjustment amount. For the
year in the left column you will pay the
percentage of the income-related
monthly adjustment amount specified
in the right column.
Year
Percentage of the income-related monthly
adjustment amount
that you will pay
2007 ..........................
2008 ..........................
33
67
(b) Phase-in of the subsidy reduction
will be complete in 2009.
§ 418.1135 What modified adjusted gross
income information will we use to
determine your income-related monthly
adjustment amount?
(a) In general, we will use your
modified adjusted gross income
provided by IRS for the tax year
beginning 2 years prior to the effective
year of the income-related monthly
adjustment amount determination.
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Modified adjusted gross income is based
on information you provide to IRS when
you file your Federal income tax return.
(b) We will use your modified
adjusted gross income for the tax year
beginning 3 years prior to the effective
year of the income-related monthly
adjustment amount determination when
IRS does not provide the information
specified in paragraph (a) of this
section. If IRS can provide modified
adjusted gross income for the tax year 3
years prior to the income-related
monthly adjustment amount effective
year, we will temporarily use that
information to determine your incomerelated monthly adjustment amount and
make adjustments as described in
§ 418.1120(b) to all affected incomerelated monthly adjustment amounts
when information for the year specified
in paragraph (a) of this section is
provided by IRS.
(c) When we have used the
information in paragraph (b) of this
section, you may provide us with
evidence of your modified adjusted
gross income for the year in paragraph
(a) of this section. You must provide a
retained copy of your signed Federal
income tax return for that year, if
available. If you filed a return for that
year, but did not retain a copy, you must
request a transcript or a copy of your
return from IRS and provide it to us.
When we use this evidence, we will
later confirm this information with IRS
records.
(d) When you meet the conditions
specified in § 418.1150 because you
have amended your Federal income tax
return, or when you believe we have
used information provided by IRS
which is incorrect, as described in
§ 418.1340, we will use information that
you provide directly to us regarding
your modified adjusted gross income.
(e) We may use information that you
give us about your modified adjusted
gross income for a more recent tax year
than those discussed in paragraphs (a)
or (b) of this section as described in
§§ 418.1201 through 418.1250.
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§ 418.1140 What will happen if the
modified adjusted gross income
information from IRS is different from the
modified adjusted gross income
information we used to determine your
income-related monthly adjustment
amount?
In general, we will use modified
adjusted gross income information from
IRS to determine your income-related
monthly adjustment. We will make
retroactive adjustments to your incomerelated monthly adjustment amount as
described in paragraphs (a) through (d)
of this section.
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(a) When we have used modified
adjusted gross income from the tax year
3 years prior to the effective year as
described in § 418.1135(b), and IRS
provides modified adjusted gross
income information from the tax year 2
years prior to the effective year, we will
use the new information to make an
initial determination for the effective
year. We will make retroactive
adjustments back to January 1 of the
effective year, or the first month you
were enrolled or reenrolled in Medicare
Part B if later than January.
(b) When we have used the modified
adjusted gross income information that
you provided for the tax year 2 years
prior to the effective year and the
modified adjusted gross income
information we receive from IRS for that
same year is different from the
information you provided, we will use
the modified adjusted gross income
information provided to us by IRS to
make a new initial determination. We
will make retroactive adjustments back
to January 1 of the effective year, or the
first month you were enrolled or
reenrolled in Medicare Part B if later
than January.
(c) When we have used information
from your amended Federal tax return
that you provide, as explained in
§ 418.1150, or you provide proof that
the information IRS provided to us is
incorrect as described in § 418.1340, we
will not make any adjustments to your
income-related monthly adjustment
amount for the effective year or years
based on IRS information that we later
receive.
(d) When we use modified adjusted
gross income information that you
provided due to a qualifying lifechanging event and we receive different
information from IRS, we will use the
IRS information to make retroactive
corrections to all months affected in the
effective year(s) during which you were
enrolled in Medicare Part B, except
when paragraph (c) of this section
applies.
§ 418.1145 How do we determine your
income-related monthly adjustment amount
if IRS does not provide information about
your modified adjusted gross income?
In general, if we do not receive any
information for you from IRS showing
that you had modified adjusted gross
income above the threshold in the tax
year we request, we will not make an
income-related monthly adjustment
amount determination.
§ 418.1150 When will we use your
amended tax return filed with IRS?
You may provide your amended tax
return for a tax year we used within 3
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calendar years following the close of the
tax year for which you filed the
amended tax return. You must provide
us with your retained copy of your
amended U.S. Individual Income Tax
Return on the required IRS form and a
copy of the IRS letter confirming the
amended tax return was filed or a
transcript from IRS if they did not send
a letter. If you cannot provide your
retained copy of the amended tax
return, you must obtain a copy of the
return from IRS. We will then make any
necessary retroactive corrections as
defined in § 418.1120 to your incomerelated monthly adjustment amount.
Determinations Using a More Recent
Tax Year’s Modified Adjusted Gross
Income
§ 418.1201 When will we determine your
income-related monthly adjustment amount
based on the modified adjusted gross
income information that you provide for a
more recent tax year?
We will use a more recent tax year
than the years described in
§ 418.1135(a) or (b) to reduce or
eliminate your income-related monthly
adjustment amount when all of the
following occur:
(a) You experience a major lifechanging event as defined in § 418.1205;
and
(b) That major life-changing event
results in a significant reduction in your
modified adjusted gross income for the
year which you request we use and the
next year, if applicable. For purposes of
this section, a significant reduction in
your modified adjusted gross income is
one that results in the decrease or
elimination of your income-related
monthly adjustment amount; and
(c) You request that we use a more
recent tax year’s modified adjusted gross
income; and
(d) You provide evidence as described
in §§ 418.1220 through 418.1230.
§ 418.1205
event?
What is a major life-changing
For the purposes of this subpart, we
will consider the following to be major
life-changing events:
(a) Your spouse dies;
(b) You marry;
(c) You divorce;
(d) You or your spouse stop working
or reduce the hours you work;
(e) You or your spouse experience a
reduction in your income due to a loss
of income-producing property, provided
that the loss is not at your direction
(e.g., due to the sale or transfer of the
property). Examples of the type of
property loss include, but are not
limited to, loss of income from real
property within a Presidentially or
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Gubernatorially-declared disaster area,
destruction of livestock or crops by
natural disaster or disease, or loss of
income from real property due to arson.
(f) You or your spouse experience a
reduction in or loss of certain forms of
pension income due to termination or
reorganization of the pension plan or a
scheduled cessation of pension benefits.
§ 418.1210 What is not a major lifechanging event?
We will not consider events other
than those described in § 418.1205 to be
major life-changing events. Certain
types of events are not considered major
life-changing events for the purposes of
this subpart, such as:
(a) Events that affect your expenses,
but not your income; or
(b) Events that result in the loss of
dividend income.
§ 418.1215
we use?
What more recent tax year will
We will consider evidence of your
modified adjusted gross income that you
provide for a tax year that is more recent
than the year described in § 418.1135 (a)
or (b) when you meet all of the
requirements described in § 418.1201.
We will always ask you for your
retained copy of your filed Federal
income tax return for the more recent
year you request that we use and will
use that information to make an initial
determination. If you have not filed
your Federal income tax return for the
more recent year you request that we
use, you must provide us with evidence
that is equivalent to a copy of a filed
Federal income tax return. Evidence
that is equivalent to a copy of a filed
Federal income tax return is defined in
§ 418.1230(c).
§ 418.1220 What evidence will you need to
support your request for us to use a more
recent tax year?
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When you request that we use a more
recent tax year to determine your
income-related monthly adjustment
amount, we will ask for evidence of the
major life-changing event and how the
event significantly reduced your
modified adjusted gross income as
described in §§ 418.1225 and 418.1230.
Unless we have information in our
records that raises a doubt about the
evidence, additional evidence
documenting these same facts will not
be needed.
§ 418.1225 What kind of major lifechanging event evidence will you need to
support your request?
(a) If your spouse died and we do not
have evidence of the death in our
records, we will require proof of death
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as described in § 404.720(b) or (c) or
§ 404.721 of this chapter.
(b) If you marry and we do not have
evidence of the marriage in our records,
we will require proof of marriage as
described in §§ 404.725 through 404.727
of this chapter.
(c) If your marriage ends and we do
not have evidence that the marriage has
ended in our records, we will require
proof that the marriage has ended as
described in § 404.728(b) or (c) of this
chapter.
(d) If you or your spouse stop working
or reduce your work hours, we will
require evidence documenting the
change in work activity. Examples of
acceptable documentation include, but
are not limited to, a signed statement
from your employer, proof of the
transfer of your business, or your signed
statement under penalty of perjury,
describing your work separation or a
reduction in hours.
(e) If you or your spouse experience
a loss of income from income-producing
property, we will require evidence
documenting the loss. Examples of the
type of evidence include, but are not
limited to, insurance claims or an
insurance adjuster’s statement.
(f) If you or your spouse experience a
reduction in or loss of pension income,
we will require evidence documenting
the reduction or loss. Examples include,
but are not limited to, a statement from
the Pension Benefit Guaranty
Corporation or your pension fund
administrator that explains the
reduction or termination of your
benefits.
§ 418.1230 What kind of significant
modified adjusted gross income reduction
evidence will you need to support your
request?
(a) You must provide evidence that
one or more of the major life-changing
events described in § 418.1205 resulted
in a significant reduction in your
modified adjusted gross income for the
tax year you request we use.
(b) The preferred evidence is a
retained copy of your filed Federal
income tax return or amended tax return
with an IRS letter of receipt of the
amended tax return, or a copy of your
return or amended tax return that you
obtain from IRS for the more recent tax
year you request we use.
(c) When a copy of your filed Federal
income tax return is not available for the
more recent tax year in which your
modified adjusted gross income was
significantly reduced, we will accept
equivalent evidence. Equivalent
evidence is the appropriate proof(s) in
paragraphs (c)(1), (2) and (3) of this
section, plus your signed statement
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10937
under penalty of perjury that the
information you provide is true and
correct. When the major life-changing
event changes your tax filing status, or
the income-related monthly adjustment
amount determination could be affected
by your tax filing status, you will also
be required to sign a statement regarding
your intended income tax filing status
for the tax year you request we use.
(1) If you experience one or more of
the events described in § 418.1205(a),
(b), or (c), you must provide evidence as
to how the event(s) significantly
reduced your modified adjusted gross
income. Examples of the type of
evidence include, but are not limited to,
evidence of your spouse’s modified
adjusted gross income and/or your
modified adjusted gross income for the
tax year we use.
(2) If you experienced one or more of
the events described in § 418.1205(d),
(e) or (f), you must provide evidence of
how the event(s) significantly reduced
your modified adjusted gross income,
such as a statement explaining any
modified adjusted gross income changes
for the tax year we use, and a copy of
your filed Federal income tax return (if
you have filed one).
(3) If your spouse experiences one or
more of the events described in
§ 418.1205(d), (e), or (f), you must
provide evidence of the resulting
significant reduction in your modified
adjusted gross income. The evidence
requirements are described in paragraph
(c)(2) of this section.
(d) When we use information
described in paragraph (c) of this
section, we will request that you
provide your retained copy of your
Federal income tax return for the year
we used when you file your taxes, so
that we can make timely adjustments.
We will later verify the information you
provide when we receive information
about that tax year from IRS, as
described in § 418.1140(d).
§ 418.1235 What is the effective date of an
income-related monthly adjustment amount
initial determination that is based on a more
recent tax year?
(a) When you make your request prior
to January 1, 2007, our initial
determination is effective on January 1,
2007.
(b) Subject to paragraph (c) of this
section, when you make your request
during or after 2007 and your modified
adjusted gross income for the more
recent tax year is significantly reduced
as a result of a major life-changing
event, our initial determination is
generally effective on January 1 of the
year in which you make your request. If
your first month of enrollment or
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reenrollment in Medicare Part B is after
January of the year for which you make
your request, our initial determination
is effective on the first day of your
Medicare Part B enrollment or
reenrollment.
(c) We will make a determination
about your income-related monthly
adjustment amount for the year
preceding the year that you make your
request in the limited circumstances
explained in § 418.1320(a)(4). When we
make a determination for the preceding
year, our initial determination is
generally effective on January 1 of that
year. If your first month of enrollment
or reenrollment in Medicare Part B is
after January of that year, our initial
determination is effective on the first
day of your Medicare Part B enrollment
or reenrollment.
(d) When you make your request
during or after 2007 and your modified
adjusted gross income is significantly
reduced beginning in the year following
the year in which you make your
request as a result of one or more of the
events described in § 418.1205(a)
through (f), our initial determination is
effective on January 1 of the next year.
§ 418.1240 When will we stop using your
more recent tax year’s modified adjusted
gross income to determine your incomerelated monthly adjustment amount?
We will use your more recent tax
year’s modified adjusted gross income
to determine your income-related
monthly adjustment amount effective
with the month and year described in
§ 418.1235 and for each year thereafter
until one of the following occurs:
(a) We receive your modified adjusted
gross income from IRS for the more
recent tax year we used or a later tax
year;
(b) Your more recent tax year
modified adjusted gross income that we
used is for a tax year more than 3 years
prior to the income-related monthly
adjustment amount effective year;
(c) You request we use a more recent
tax year based on another major lifechanging event as described in
§ 418.1201; or
(d) You notify us of a change in your
modified adjusted gross income for the
more recent tax year we used as
described in § 418.1245.
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§ 418.1245 Should you notify us if your
modified adjusted gross income for the
more recent tax year changes?
If you know that the information you
provided to us about the more recent tax
year that we used has changed, you
should tell us so that we can determine
if your income-related monthly
adjustment amount should be
eliminated or adjusted. We will accept
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new modified adjusted gross income
information at any time after your
request until the end of the calendar
year following the more recent tax
year(s) that we used. For us to make a
new initial determination using your
new modified adjusted gross income
information, you must provide evidence
as described in § 418.1230 to support
the reduction or increase in your
modified adjusted gross income. If you
amend your Federal income tax return
for the more recent tax year we used, we
will use the rules in § 418.1150.
§ 418.1250 What will happen if you notify
us that your modified adjusted gross
income for the more recent tax year
changes?
(a) If you notify us that your modified
adjusted gross income for the more
recent tax year has changed from what
is in our records, we may make a new
initial determination for each effective
year involved. To make a new initial
determination(s) we will take into
account:
(1) The new modified adjusted gross
income information for the more recent
tax year you provide; and
(2) Any modified adjusted gross
income information from IRS, as
described in § 418.1135, that we have
available for each effective year; and
(3) Any modified adjusted gross
income information from you, as
described in § 418.1135, that we have
available for each effective year.
(b) For each new initial determination
that results in a change in your incomerelated monthly adjustment amount, we
will make retroactive adjustments that
will apply to all enrolled months of the
effective year.
(c) We will continue to use a new
initial determination described in
paragraph (a) of this section to
determine additional yearly incomerelated monthly adjustment amount(s)
until an event described in § 418.1240
occurs.
(d) We will make an initial
determination about your incomerelated monthly adjustment amount
when we receive modified adjusted
gross income for the effective year from
IRS, as described in § 418.1140(d).
Determinations and the Administrative
Review Process
§ 418.1301 What is an initial determination
regarding your income-related monthly
adjustment amount?
An initial determination is the
determination we make about your
income-related monthly adjustment
amount that is subject to administrative
review. For the purposes of
administering the income-related
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monthly adjustment amount, initial
determinations include but are not
limited to determinations about:
(a) The amount of your incomerelated monthly adjustment amount
based on information provided by IRS;
and
(b) Any change in your incomerelated monthly adjustment amount
based on one of the circumstances listed
in § 418.1320(a)(1) through (a)(4).
§ 418.1303 What is not an initial
determination regarding your incomerelated monthly adjustment amount?
Administrative actions that are not
initial determinations may be reviewed
by us, but they are not subject to the
administrative review process as
provided by §§ 418.1310 through
418.1330 and they are not subject to
judicial review. These actions include,
but are not limited to, our dismissal of
a request for reconsideration as
described in § 418.1335 and our
dismissal of a request for a new initial
determination as described in
§ 418.1320(c).
§ 418.1305 How will we notify you and
what information will we provide about our
initial determination?
(a) We will mail a written notice of all
initial determinations to you. The notice
of the initial determination will state the
important facts and give the reasons for
our conclusions. Generally, we will not
send a notice if your income-related
monthly adjustment amount stops
because of your death.
(b) The written notice that we send
will tell you:
(1) What our initial determination is;
(2) The reason for our determination;
(3) The effect of the initial
determination; and
(4) Your right to a reconsideration or
a new initial determination.
§ 418.1310 What is the effect of an initial
determination?
An initial determination is binding
unless you request a reconsideration
within the time period described in
§§ 404.909 and 404.911 of this chapter
or we revise the initial determination or
issue a new initial determination.
§ 418.1315 When may you request a
reconsideration?
If you are dissatisfied with our initial
determination about your incomerelated monthly adjustment amount,
you may request that we reconsider it.
In addition, a person who shows in
writing that his or her rights may be
adversely affected by the initial
determination may request a
reconsideration. When you request a
reconsideration, we will use the rules in
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§§ 404.907 through 404.922 of this
chapter. If you request a reconsideration
solely because you believe that the
information that IRS gave us is
incorrect, we will dismiss your request
for reconsideration and notify you that
you may contact IRS as explained in
§ 418.1335.
wwhite on PROD1PC61 with PROPOSALS
§ 418.1320 When may you request that we
make a new initial determination?
(a) You may request that we make a
new initial determination in the
following circumstances:
(1) You provide a copy of your filed
Federal income tax return for the tax
year 2 years prior to the effective year
when IRS has provided information for
the tax year 3 years prior to the effective
year. You may request a new initial
determination from the date you receive
a notice from us regarding your incomerelated monthly adjustment amount
until the end of the effective year, with
one exception. If you receive the notice
during the last three months of a
calendar year, you may request a new
initial determination from the date you
receive the notice until March 31 of the
following year. We will follow the rules
and procedures in § 418.1120(b) and
§ 418.1140(b) to make a new initial
determination and any necessary
retroactive adjustments back to January
1 of the effective year, or the first month
you were enrolled in Medicare Part B if
later than January.
(2) You provide a copy of an amended
tax return filed with IRS, as defined in
§ 418.1010(b)(1). We will use your
amended tax return for the same tax
year as the year used to determine your
income-related monthly adjustment
amount. You must request the new
initial determination within the
timeframe described in § 418.1150.
(3) You provide proof from IRS of a
correction of your modified adjusted
gross income information or Federal
income tax filing status for the year we
used. We will use your proof of the
correction for the same tax year as the
year used for your modified adjusted
gross income provided by IRS, as
explained in § 418.1340. Within 60 days
following the date you receive a notice
from us regarding your income-related
monthly adjustment amount, you may
request a new initial determination. We
will use the rules and procedures in
§ 418.1340.
(4) You have a major life-changing
event. You may request a new initial
determination based on a major lifechanging event when you meet all the
requirements described in § 418.1201.
You may make such a request at any
time during the calendar year in which
you experience a significant reduction
VerDate Aug<31>2005
16:45 Mar 02, 2006
Jkt 208001
in your modified adjusted gross income
caused by a major life-changing event.
When you have a major life-changing
event that occurs in the last 3 months
of a calendar year and your modified
adjusted gross income for that year is
significantly reduced as a result of the
event, you may request that we make a
new initial determination based on your
major life-changing event from the date
of the event until March 31 of the next
year. We will follow the rules in
§ 418.1235 when we make a new initial
determination based on your major lifechanging event.
(b) We will notify you of the new
initial determination as described in
§ 418.1305.
(c) We will dismiss your request to
make a new initial determination if it
does not meet the conditions specified
above. Our dismissal of your request for
a new initial determination is not an
initial determination subject to further
administrative or judicial review.
§ 418.1325 What are the rules for the
administrative review process?
For the purpose of this subpart, in
making initial determinations and
reconsiderations, we will use the same
rules for the administrative review
process that we use for determinations
and decisions about your rights
regarding non-medical issues under title
II of the Act, as described in subpart J
of part 404 of this chapter. If you are
dissatisfied with our reconsideration,
you may request further review,
including a hearing before an
administrative law judge of the Office of
Medicare Hearings and Appeals at HHS,
review by the Medicare Appeals
Council, and judicial review, consistent
with HHS’ regulations at 42 CFR part
405, subpart I. A request for a new
initial determination is not the same as
a request for reconsideration or further
administrative review.
§ 418.1330 Is reopening of a determination
or decision ever appropriate?
The rules in §§ 404.987 through
404.991a of this chapter will apply to
reopenings of determinations made by
us. The rules in 42 CFR 405.980 through
405.986 will apply to reopenings of
decisions by an administrative law
judge of the Office of Medicare Hearings
and Appeals at HHS and by the
Medicare Appeals Council.
§ 418.1335 Can you request a
reconsideration when you believe that the
IRS information we used is incorrect?
proof of a correction from IRS and
request a new initial determination
(§ 418.1340). Our dismissal of your
request for reconsideration is not an
initial determination subject to further
administrative or judicial review.
§ 418.1340 What should you do if our
initial determination is based on modified
adjusted gross income information you
believe to be incorrect?
If you believe that IRS or you
provided incorrect modified adjusted
gross income information to us that we
used to determine your income-related
monthly adjustment amount, you can
request information from us on how to
contact IRS regarding the information
we used.
(a) If IRS determines that the
information it provided is not correct,
IRS will provide you with
documentation of the error, such as a
copy of your Federal income tax return.
If you would like us to use the revised
or corrected information to determine
your income-related monthly
adjustment amount, you will need to
request that we use that information and
provide us with the IRS documentation
confirming the error. We will make any
necessary retroactive corrections as
defined in § 418.1120 to your incomerelated monthly adjustment amount.
(b) If you provided information to us
about your modified adjusted gross
income that we used to determine your
income-related monthly adjustment
amount, and that information is not
correct, you may provide revised or
corrected information. We will use the
revised or corrected information if it
reduces or eliminates your incomerelated monthly adjustment amount. We
will make any necessary retroactive
corrections as described in § 418.1120 to
your income-related monthly
adjustment amount. If you are providing
corrected information about a more
recent tax year’s modified adjusted gross
income that we used due to your major
life-changing event, as described in
§ 418.1245, we will use the rules in
§ 418.1250 to determine how it will
affect your income-related monthly
adjustment amount.
[FR Doc. 06–2075 Filed 3–2–06; 8:45 am]
BILLING CODE 4191–02–P
If you request a reconsideration solely
because you believe that the information
that IRS gave us is incorrect, we will
dismiss your request for a
reconsideration and notify you to obtain
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]]>Agencies
[Federal Register Volume 71, Number 42 (Friday, March 3, 2006)]
[Proposed Rules]
[Pages 10926-10939]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-2075]
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SOCIAL SECURITY ADMINISTRATION
20 CFR Part 418
RIN 0960-AG11
Medicare Part B Income-Related Monthly Adjustment Amount
AGENCY: Social Security Administration (SSA).
ACTION: Notice of proposed rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: We propose to add to our regulations a new subpart, Medicare
Part B Income-Related Monthly Adjustment Amount, to contain the rules
we would follow for Medicare Part B income-related monthly adjustment
amount determinations. The monthly adjustment amount represents the
amount of decrease in the Medicare Part B premium subsidy, i.e. the
amount of the Federal Government's contribution to the Federal
Supplementary Medical Insurance Trust Fund. This new subpart would
implement section 811 of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (the Medicare Modernization Act or MMA)
and would contain the rules for determining when, based on income, a
monthly adjustment amount will be added to a Supplementary Medical
Insurance (Medicare Part B) beneficiary's standard monthly premium.
These proposed rules describe: what the new subpart is about; what
information we would use to determine whether you would pay an income-
related monthly adjustment amount and the amount of the adjustment when
applicable; when we will consider a major life-changing event that
results in a significant reduction in your modified adjusted gross
income; and how you can appeal our determination about your income-
related monthly adjustment amount.
DATES: To be sure your comments are considered, we must receive them by
May 2, 2006.
ADDRESSES: You may give us your comments by: using our Internet
facility (i.e., Social Security Online) at https://policy.ssa.gov/erm/
rules.nsf/Rules+Open+To+Comment or the Federal eRulemaking Portal at
https://www.regulations.gov; e-mail to regulations@ssa.gov; telefax to
(410) 966-2830; or letter to the Commissioner of Social Security, P.O.
Box 17703, Baltimore, MD 21235-7703. You may also deliver them to the
Office of Regulations, Social Security Administration, 100 Altmeyer
Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, between 8
a.m. and 4:30 p.m. on regular business days. Comments are posted on our
Internet site or you may inspect them physically on regular business
days by making arrangements with the contact person shown in this
preamble.
FOR FURTHER INFORMATION CONTACT: Craig Streett, Team Leader, Office of
Income Security Programs, Social Security Administration, 252 Altmeyer
Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, 410-965-
9793 or TTY 1-800-966-5609, for information about this notice. For
information on eligibility or filing for benefits, call our national
toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or visit our
Internet site, Social Security Online, at https://
www.socialsecurity.gov.
SUPPLEMENTARY INFORMATION:
Electronic Version
The electronic file of this document is available on the date of
publication in the Federal Register at https://www.gpoaccess.gov/fr/
index.html.
Statutory Provisions
Section 811 of the MMA (Public Law 108-173), which was enacted into
law on December 8, 2003, added subsection (i) to section 1839 of the
Social Security Act (the Act), and established a Medicare Part B
premium subsidy reduction (referred to in these proposed rules as ``the
income-related monthly adjustment amount'') effective January 1, 2007,
which will be added to the standard monthly Medicare Part B premium
amount for certain beneficiaries. Section 1839(i) of the Act was
subsequently amended by section 5111 of the Deficit Reduction Act of
2005, Public Law 109-171. The Centers for Medicare & Medicaid Services
(CMS), in the Department of Health and Human Services (HHS), has
overall responsibility for determining the annual Medicare Part B
standard monthly premium amounts and premium increases for late
enrollment or reenrollment. CMS regulations at 42 CFR part 408 describe
the rules that CMS uses to determine those amounts. As explained in
these proposed rules, we are responsible only for making initial
determinations and reconsiderations about income-related monthly
adjustment amounts. Any subsequent levels of appeal will be provided by
HHS under its regulations at 42 CFR part 405, subpart I.
Section 702(a)(5) of the Act allows us to make the rules and
regulations necessary or appropriate to carry out the functions of SSA.
Other provisions in section 811 of the MMA provide us with additional
specific authorization to make rules and regulations to determine the
income-related monthly adjustment amount. For example, sections
1839(i)(4)(B) and (i)(4)(C)(ii)(II) of the Act authorize us to
promulgate regulations, in consultation with the Secretary of the
Treasury, necessary for our determinations about income-related monthly
adjustment amounts. Section 1839 of the Act requires the Secretary of
HHS to annually determine the Medicare Part B standard monthly premium
amount. Section 1839 of the Act also authorizes the Secretary of HHS to
establish a premium increase for late enrollment and for reenrollment
under certain circumstances and provide for a limitation on increases
in the Medicare Part B standard monthly premium for some beneficiaries.
The new section 1839(i) requires us to determine the income-related
monthly adjustment amount for Medicare beneficiaries with modified
adjusted gross income above an established threshold. The income-
related monthly adjustment amount is added to the Medicare Part B
standard monthly premium and any applicable premium increase for late
enrollment or reenrollment. The MMA provides that in 2007 the modified
adjusted gross income threshold is $80,000 for individuals who file
their Federal income taxes with a filing status of single and $160,000
for married individuals who file a joint tax return. Section 811(c)(1)
of the MMA enacted a new section 6103(1)(20) of the Internal Revenue
Code authorizing the Internal Revenue Service (IRS) to provide certain
income information to us to use in determining the income-related
monthly adjustment amount. The MMA requires
[[Page 10927]]
that the threshold amount be adjusted yearly based on the Consumer
Price Index.
Section 811(b)(1)(C) of the MMA also amended section 1839(f) of the
Act, so that the limitation on increases in the Medicare Part B
standard monthly premium for some beneficiaries will not apply to
beneficiaries who are responsible for an income-related monthly
adjustment amount.
Background
Medicare Part B is a voluntary program which provides medical
insurance coverage for medical and health services such as physician
services, diagnostic services, and medical supplies. Medicare Part B
beneficiaries are responsible for deductibles, co-insurance and monthly
premiums towards the cost of covered services. CMS promulgates rules
and regulations concerning the Medicare program.
The Medicare Part B standard monthly premium is set by CMS so that
it covers approximately 25 percent of the Medicare Part B program
costs. Certain beneficiaries may also pay an increased premium for late
enrollment in Medicare Part B or for reenrollment after a period
without coverage. Approximately 75 percent of the full cost of Medicare
Part B is subsidized by the Federal Government by contributions to the
Federal Supplementary Medical Insurance Trust Fund. In addition, for
certain beneficiaries whose premiums are deducted from other payable
Social Security (or railroad retirement) benefit amounts that they
receive, the yearly adjustment to the premium amount cannot be raised
more than the amount of the cost-of-living adjustment for those other
benefits.
Starting in January 2007, the Medicare Part B premium subsidy will
be reduced for an estimated 4 to 5 percent of the approximately 40
million Medicare Part B beneficiaries. Beneficiaries who had modified
adjusted gross income above the threshold level set in the MMA in the
tax year 2 years prior to the year for which we make a determination
about whether they must pay an income-related monthly adjustment amount
(the effective year) will receive a reduced Federal subsidy of their
Medicare Part B premium. The reduction of the Federal premium subsidy
will result in beneficiaries with modified adjusted gross income above
the threshold paying more of the cost of their Medicare Part B benefits
through an income-related monthly adjustment amount that is added to
the Medicare Part B standard monthly premium plus any applicable
premium increase for late enrollment or reenrollment.
How This Affects You
Your modified adjusted gross income is your adjusted gross income,
as defined at 26 U.S.C. 62 and in related regulations, plus certain
other forms of income that may be excluded from adjusted gross income
for the purpose of determining the amount of Federal income tax that
you must pay. The MMA as amended by the Deficit Reduction Act provides
that the payment of the full amount of the income-related monthly
adjustment amount will be phased in starting in 2007 and will be
completed in 2009. If you must pay an income-related monthly adjustment
amount, you will not be eligible for the limitation on Medicare Part B
standard monthly premium increase beyond the amount of your Social
Security (or tier 1 railroad retirement) cost-of-living adjustments, as
described in 42 CFR 408.20.
If you are a Medicare beneficiary prior to January 1, 2007 and you
will be required to pay an income-related monthly adjustment amount in
2007, you will be notified at the end of 2006 about the additional
amount of your premium and any related changes in the amount of your
Social Security monthly benefits or other payments from which your
premiums will be withheld (railroad retirement or Civil Service annuity
payments). If you enroll in Medicare Part B after January 1, 2007 and
we determine that you must pay an income-related monthly adjustment
amount for your Medicare Part B coverage, you will be notified shortly
after you enroll in Medicare Part B. If you are a Medicare beneficiary
during 2007 or after, we will notify you prior to the start of each
year if you must pay an income-related monthly adjustment amount in
that year.
How We Determine Your Income-Related Monthly Adjustment Amount
The amount of your modified adjusted gross income will determine if
you are to pay an income-related monthly adjustment. Section 1839(i)(2)
of the Act establishes the threshold for modified adjusted gross income
used to determine if you are to pay an income-related monthly
adjustment amount. In 2007, the modified adjusted gross income
threshold amount is $80,000 for individuals who file their Federal
income tax return with a filing status of single, married filing
separately, head of household, or qualifying widow(er) with dependent
child, and $160,000 for individuals who file a joint income tax return
with their spouse.
Section 1839(i)(4) of the Act requires us to request information
about your modified adjusted gross income from IRS in the Department of
the Treasury and to use this information to determine if you must pay
an income-related monthly adjustment amount. We will specify the tax
year involved in our information request. We will request that IRS send
us Federal income tax return information about your modified adjusted
gross income for the tax year which is 2 years before the effective
year. If modified adjusted gross income information is not available
from IRS for the tax year 2 years before the effective year of our
determination, IRS will send us your modified adjusted gross income
information for the tax year 3 years before that year if it exceeds the
threshold. We will use information for 3 years prior to determine
whether you must pay an income-related monthly adjustment amount only
until information for 2 years prior becomes available.
If we use information from IRS for the tax year 3 years before the
effective year of our determination, you may request that we use
information that you provide for the tax year 2 years before that year.
We will use that information, when you provide it to us, if that
information will result in a lower income-related monthly adjustment
amount. In order for us to make an initial determination based on such
a request, you must provide your retained copy of your Federal income
tax return for that year, a copy that you request from IRS, or an IRS
transcript of your return. If you provide your retained copy, we will
also verify this information with IRS.
In some cases, IRS will not have data to provide us regarding an
individual's modified adjusted gross income because the amount of the
individual's income is below the level for which an income tax return
must be filed. We will not be making income-related monthly adjustment
amount determinations in such situations because this individual's
income would also be below the modified adjusted gross income
threshold. However, if we receive information which indicates that an
individual who has not filed a tax return has income which exceeds the
established threshold for an income-related monthly adjustment amount,
we will make such a determination. The statute requires that we, in
consultation with the Secretary of the Treasury issue regulations that
``provide for the treatment of the premium adjustment with respect to
such individual[s].'' We are consulting with the IRS to determine if we
can obtain information from IRS
[[Page 10928]]
(or otherwise) on such non-filing individuals. Since typically the IRS
does not collect and maintain the same information for filers and non-
filers, SSA is requesting public comment on this issue.
The Sliding Scale Formula and How It Applies to You
Section 1839(i)(3) prescribes a sliding scale formula that CMS will
use to establish annually four income-related monthly adjustment
amounts beginning in 2007. The calculation of the income-related
monthly adjustment amount reduces a beneficiary's Medicare Part B
premium subsidy using specified percentages. The amount of this premium
subsidy reduction is the income-related monthly adjustment amount. To
determine each income-related monthly adjustment amount, CMS will use
the unsubsidized Medicare Part B premium (approximately four times the
Medicare Part B standard monthly premium) and multiply it by a
specified percentage. The percentage used in the calculation increases
as the amount of modified adjusted gross income increases.
We use your modified adjusted gross income and your Federal income
tax filing status (e.g., single, married filing jointly, married filing
separately) to determine whether you must pay an income-related monthly
adjustment amount and the amount of your income-related monthly
adjustment amount. Section 1839(i)(3)(C) provides the modified adjusted
gross income ranges. The range amounts for individuals who are married
filing jointly are double the range amounts for single income tax
filers. IRS recognizes three additional filing statuses: Head of
household, qualifying widow(er) (26 U.S.C. 2) and married filing
separately. If you file as a head of household or as a qualifying
widow(er), we will apply the modified adjusted gross income range
applicable to individuals who file their Federal income tax with a
filing status of single. Section 1839(i)(3)(C)(iii) provides for the
modified adjusted gross income ranges for individuals who file their
Federal income tax return with a filing status of married filing
separately and who also have lived with their spouse at any time during
the year to be reduced by the threshold amount established for that
calendar year which may result in a higher income-related monthly
adjustment amount for these individuals. However, section 1839(i)(1)
provides a threshold amount (which is $80,000 in 2007 but will change
in subsequent years due to indexing) that is applicable to all income-
related monthly adjustment amount determinations. Thus, the lowest
range amount cannot be lower than the threshold. For 2007, this results
in the following two ranges for married filing separately: (1) $80,000
to less than or equal to $120,000 and (2) More than $120,000.
Starting in 2007 for calendar year 2008, and annually thereafter
for each following calendar year, CMS will publish the annual modified
adjusted gross income ranges and income-related monthly adjustment
amounts that are associated with each range. We will use this published
information to determine which amount applies to you based on your tax
filing status in the tax year we are using to determine your income-
related monthly adjustment amount.
If you filed an amended tax return for the tax year we used to make
a determination of your income-related monthly adjustment amount, you
may request that we use your amended tax return for that year. You must
provide us with proof that you filed an amended tax return with IRS,
including your retained copy of the amended tax return, and a letter
from IRS verifying receipt of the return or an IRS transcript of your
amended tax return. If you believe that IRS provided incorrect modified
adjusted gross income information and we used that information to
determine your income-related monthly adjustment amount, you may
request that we make a new income-related monthly adjustment amount
determination. You must provide proof of the error in the IRS data and
evidence of your actual modified adjusted gross income, such as a copy
of the return that you obtain from IRS. When we use information from
your amended or corrected Federal income tax return to make a
determination, we will make retroactive adjustments that will apply to
all months that you paid an incorrect income-related monthly adjustment
amount.
Phase-In and Inflation Adjustment of the Income-Related Monthly
Adjustment Amount
Section 1839(i)(3)(B) requires the amount of the full income-
related monthly adjustment to be phased in over a 3-year period
beginning in 2007. The effect is that from 2007 through 2009 the amount
of the income-related monthly adjustment amount will increase, because
the subsidy will decrease. The percentage will change each year so that
the income-related monthly adjustment amount will gradually increase,
until the full amount is phased in starting in 2009.
Beginning in 2008, section 1839(i)(5) of the Act requires an annual
inflation adjustment for the threshold amount and the amounts used in
the modified adjusted gross income ranges. The adjustment will be based
on the percentage increase in the Consumer Price Index for all urban
consumers rounded to the nearest $1,000. CMS will publish these amounts
annually.
Changes in Your Modified Adjusted Gross Income
Section 1839(i)(4)(C) of the Act requires us to establish
procedures in consultation with the Secretary of the Treasury for
determining your modified adjusted gross income for a tax year more
recent than the information ordinarily provided by IRS. The statute
states that we will grant your request to use a more recent tax year to
determine your income-related monthly adjustment amount only when:
You experience a major life-changing event;
That major life-changing event results in a significant
reduction in your modified adjusted gross income;
You request that we use a more recent tax year's modified
adjusted gross income; and
You provide evidence of the event and the reduction in
your modified adjusted gross income.
These proposed rules describe the standards that you must meet in
order for us to use a more recent tax year's modified adjusted gross
income to determine whether you must pay an income-related monthly
adjustment amount and what the amount of your income-related monthly
adjustment amount will be. In these proposed rules we define qualifying
major life-changing events and what is a significant reduction in your
modified adjusted gross income. We also specify the evidence we will
require of major life-changing events and the resulting reduction in
your modified adjusted gross income.
Section 1839(i)(4)(C)(ii)(II) specifies that major life-changing
events include marriage, divorce, and death of a spouse. Under that
section, we have discretion to include in regulations additional major
life-changing events that would allow us to grant your request that we
use information from a more recent tax year to determine your income-
related monthly adjustment amount. In these rules we propose to
establish the following categories of qualifying major life-changing
events:
Death of a spouse;
Marriage;
Divorce;
Partial or full work stoppage;
[[Page 10929]]
Loss of income from income-producing property when the
loss is not at your direction, for example, loss of income from real
property due to a natural disaster in a Presidentially or
Gubernatorially-declared disaster area, or due to arson, or destruction
of livestock or crops; and
Reduction or loss of certain forms of pension income due
to termination or reorganization of the pension plan, or a scheduled
cessation of your pension benefits.
We have included these additional categories of major life-changing
events because we recognize that these events may cause a significant
reduction in your modified adjusted gross income. We will include
losses in pension income that occur due to events outside of your
control, such as underfunding that results in a termination of the
plan, but not due to your choices about funding an employee-directed
pension plan. The statute does not authorize us to define as major
life-changing events circumstances that affect your expenses, but not
your income.
We propose to define a significant reduction in your modified
adjusted gross income as any change that results in a reduction or
elimination of your income-related monthly adjustment amount. Section
1839(i)(4)(C)(ii) provides that we may grant your request to use a more
recent tax year's modified adjusted gross income to determine your
income-related monthly adjustment amount only if you provide us with a
copy of a filed Federal income tax return or equivalent document. These
proposed rules define the evidence that we will consider to be
equivalent to a copy of a filed Federal income tax return.
When we make an income-related monthly adjustment amount
determination based on your request due to a qualifying major life-
changing event, the determination will generally be effective on
January 1 of the calendar year for which we make the determination. If
you enrolled in Medicare Part B after January 1 of the year for which
we make an income-related monthly adjustment amount determination based
on your request due to a major life-changing event, the determination
will be effective the month of your Medicare Part B enrollment.
When we make an income-related monthly adjustment amount
determination following a major life-changing event using your more
recent tax year's modified adjusted gross income, we will continue
trying to get IRS data for that tax year. When we receive modified
adjusted gross income information from IRS for that tax year, we will
use the information from IRS to determine the correct income-related
monthly adjustment amount for the year or years for which we used
information that you provided, and we will make retroactive
adjustments, if necessary. Retroactive adjustments will apply to all
months for which you paid an incorrect income-related monthly
adjustment amount.
If You Disagree With Our Determination of Your Income-Related Monthly
Adjustment Amount
We will decide whether you must pay an income-related monthly
adjustment, and the amount of any adjustment, based on information we
receive from IRS or you. We will send you a notice of our initial
determination of your income-related monthly adjustment amount and the
basis for our determination. The notice will explain that, if you
disagree with our determination, you may request that we reconsider it
within 60 days after the date you receive notice of our initial
determination. The notice will also explain that you may request a new
initial determination, rather than a reconsideration, if you believe
the information we used in our initial determination was correct, but
you want us to use different information about your modified adjusted
gross income.
For purposes of this subpart, in making initial determinations and
reconsiderations, we will use the rules for the administrative review
process that we use for determinations of your rights regarding
nonmedical issues under title II of the Act. These are the same rules
that we use when making initial determinations and reconsiderations
regarding applications for and entitlement to Medicare benefits under
42 CFR 405.904(a)(1). If you are dissatisfied with our reconsideration,
you may request further review, including a hearing before an
administrative law judge from the Office of Medicare Hearings and
Appeals (OMHA) at HHS, review by the Medicare Appeals Council (MAC),
and judicial review, consistent with the CMS regulations at 42 CFR part
405, subpart I. As part of your request for an administrative law judge
hearing or MAC review, you will be required to provide your consent to
HHS for us to release your relevant tax return information to OMHA or
the MAC for the purposes of adjudicating any appeal of the amount of an
income-related adjustment to the Part B premium subsidy and for any
judicial review of that appeal.
We propose to establish a new procedure, a request for a new
initial determination, that you may use when you do not dispute the
accuracy of the IRS modified adjusted gross income information we used,
or the determination we made based on that information, but you want us
to use different information. You may provide evidence of your modified
adjusted gross income for a more recent tax year than the information
provided by IRS when you have had a major life-changing event that
significantly reduces your income or when IRS has provided modified
adjusted gross income information from 3 years prior to the premium
effective year and you supply your retained copy of your Federal income
tax return for the tax year 2 years prior. You may also request that we
make a new initial determination when you have amended your Federal
income tax return or when you can furnish proof that IRS has provided
incorrect information about your modified adjusted gross income for the
year that we used to determine your income-related monthly adjustment
amount.
We propose to establish this alternative procedure in view of the
nature of the information that we are required by the MMA to use in
making determinations regarding the income-related monthly adjustment
amount. We anticipate that the use of this new procedure will allow us
to make timely adjustments when you have updated information about your
modified adjusted gross income, or when you can prove the IRS
information we used is incorrect. This process does not affect your
right to appeal any initial determination that we make about your
income-related monthly adjustment amount, but allows you to choose an
alternative of requesting that we use other information to make a new
initial determination.
Explanation of Proposed Subpart B
We propose to add a new subpart B, Medicare Part B Income-Related
Monthly Adjustment Amount, to part 418 of chapter III of title 20 of
the Code of Federal Regulations. Proposed subpart B would contain the
rules that we will use to determine when you will be required to pay an
income-related monthly adjustment amount in addition to your Medicare
Part B standard monthly premium plus any applicable premium increase
for late enrollment or reenrollment. Following is a description of each
section for proposed subpart B.
[[Page 10930]]
Introduction, General Provisions, and Definitions
Section 418.1001 describes what subpart B is about, lists
the groups of sections in the subpart, and the subject of each group.
Section 418.1005 explains that the purpose of the income-
related monthly adjustment amount is to reduce the premium subsidy of
the Medicare Part B program, i.e., the amount of the Federal
Government's contribution to the Federal Supplementary Medical
Insurance Trust Fund, for certain beneficiaries.
Section 418.1010 contains definitions of terms used
throughout this subpart.
Determination of the Income-Related Monthly Adjustment Amount
Section 418.1101 explains what the income-related monthly
adjustment amount is and when it is applied.
Section 418.1105 defines the modified adjusted gross
income threshold and what the modified adjusted gross income threshold
amounts will be in the year 2007. It also describes how threshold
amounts will change in later years.
Section 418.1110 defines modified adjusted gross income
ranges and explains how we will use them and your tax filing status to
determine the amount of your income-related monthly adjustment amount
when applicable, and what effect Federal income tax filing status has
on the ranges.
Section 418.1115 explains how we will determine your
income-related monthly adjustment amount.
Section 418.1120 describes the effective date of our
initial determination about the income-related monthly adjustment
amount.
Section 418.1125 explains how the income-related monthly
adjustment amount will affect your total Medicare Part B premium.
Section 418.1130 explains how we will phase in the full
applicable income-related monthly adjustment amounts.
Section 418.1135 describes what modified adjusted gross
income information we will use to determine your income-related monthly
adjustment amount.
Section 418.1140 describes what will happen if the
modified adjusted gross income that we later receive from IRS is
different from the information that we previously used to make a
determination of your income-related monthly adjustment amount.
Section 418.1145 describes how we will determine the
income-related monthly adjustment amount if IRS does not provide your
modified adjusted gross income information.
Section 418.1150 describes when we will use a copy of your
amended Federal income tax return filed with IRS to determine the
income-related monthly adjustment amount and what proof is necessary to
show that you filed a tax return with IRS.
Determinations Using a More Recent Tax Year's Modified Adjusted Gross
Income
Section 418.1201 explains when we will use modified
adjusted gross income information for a more recent tax year to
determine your income-related monthly adjustment amount.
Section 418.1205 describes what is considered a major
life-changing event that would justify using information from a more
recent tax year.
Section 418.1210 explains what is not considered a major
life-changing event that would justify using information from a more
recent tax year.
Section 418.1215 explains which more recent tax years we
may use to determine whether you must pay an income-related monthly
adjustment amount and the amount of that adjustment.
Section 418.1220 outlines what evidence we will consider
when you request that we use information that you provide about your
modified adjusted gross income for a more recent tax year to determine
your income-related monthly adjustment amount.
Section 418.1225 describes what evidence of a major life-
changing event you will need to provide to support your request to use
a more recent tax year.
Section 418.1230 describes what evidence of a significant
reduction in your modified adjusted gross income you will need to
provide to support your request to use a more recent tax year.
Section 418.1235 explains the effective date of our
income-related monthly adjustment amount determination based on your
request to use a more recent tax year.
Section 418.1240 explains when we will stop using your
modified adjusted gross income from a more recent tax year for income-
related monthly adjustment amount determinations.
Section 418.1245 explains what you should do if your
modified adjusted gross income for the more recent tax year changes.
Section 418.1250 explains what will happen if you notify
us of a change in your modified adjusted gross income for the more
recent tax year.
Determinations and the Administrative Review Process
Section 418.1301 explains what is an initial determination
regarding your income-related monthly adjustment, and provides examples
of determinations that are initial determinations for purposes of these
rules.
Section 418.1303 explains that administrative actions that
are not initial determinations are not subject to the administrative
review process.
Section 418.1305 explains how we will notify you when we
make an initial determination, and what information the notice will
contain.
Section 418.1310 explains the effect of the initial
determination.
Section 418.1315 explains when you may request a
reconsideration.
Section 418.1320 explains when you may request that we
make a new initial determination.
Section 418.1325 tells you the rules for the
administrative review process.
Section 418.1330 tells you the rules we will use to decide
if reopening a prior determination or decision is appropriate.
Section 418.1335 explains what will happen if you request
a reconsideration because you believe that IRS information we used to
make an initial determination about your income-related monthly
adjustment amount is incorrect.
Section 418.1340 explains what to do if you believe our
initial determination is based on incorrect modified adjusted gross
income information.
Clarity of These Proposed Rules
Executive Order 12866, as amended by Executive Order 13258,
requires each agency to write all rules in plain language. In addition
to comments you may have on these proposed rules, we also invite your
comments on how to make the rules easier to understand. For example:
Have we organized the material to suit your needs?
Are the requirements in the rules clearly stated?
Do the rules contain technical language or jargon that is
not clear?
Would a different format (grouping and order of sections,
use of headings, paragraphing) make the rules easier to understand?
Would more (but shorter) sections be better?
Could we improve clarity by adding tables, lists, or
diagrams?
What else could we do to make the rules easier to
understand?
[[Page 10931]]
Regulatory Procedures
Executive Order 12866
We have consulted with the Office of Management and Budget (OMB)
and determined that these proposed rules meet the criteria for an
``economically significant'' regulatory action under Executive Order
12866, as amended by Executive Order 13258. Thus they were reviewed by
OMB.
These proposed rules provide the implementing rules for the income-
related premium calculation enacted as part of MMA. The legislative
provision is expected to result in an overall savings to the Medicare
Supplementary Medical Insurance Trust Fund of roughly $7.7 billion over
the period of fiscal years 2007-2011. The following chart shows the
total savings in millions for each program year.
------------------------------------------------------------------------
Fiscal year Total savings
------------------------------------------------------------------------
2007.................................................... 490
2008.................................................... 1,180
2009.................................................... 1,860
2010.................................................... 2,060
2011.................................................... 2,150
---------------
Total: 2007-2011.................................... 7,740
------------------------------------------------------------------------
In addition, the process of determining the additional premiums
will result in an increase in administrative expenses incurred by SSA
in the amount of $200 million over that same 5-year period.
Accounting Statement
As required by OMB Circular A-4 (available at https://
www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in the following table
(Table 1) we have prepared an accounting statement showing the
classification of the expenditures associated with the provisions of
these proposed rules. This table provides our best estimate of the
increase in premium payments as a result of the changes to the Part B
program presented in these proposed rules. All expenditures are
classified as transfers to the SMI Trust Fund.
Table 1.--Accounting Statement: Classification of Estimated Savings
[In millions]
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers......... $1,370.
From Whom to Whom?..................... Certain High-Income Medicare
Part B Beneficiaries to the
Medicare SMI Trust Fund.
------------------------------------------------------------------------
Regulatory Flexibility Act
We certify that these proposed rules will not have a significant
economic impact on a substantial number of small entities as they
affect individuals only. Therefore, a regulatory flexibility analysis
as provided in the Regulatory Flexibility Act, as amended, is not
required for these proposed rules.
Paperwork Reduction Act
These proposed rules contain reporting requirements as shown in the
following table. Where the public reporting burden is accounted for in
Information Collection Requests for the various forms that the public
uses to submit the information to SSA, a 1-hour placeholder burden is
being assigned to the specific reporting requirement(s) contained in
these rules.
----------------------------------------------------------------------------------------------------------------
Average
Annual number Frequency of burden per Estimated
Section of response response annual burden
respondents (minutes) (hours)
----------------------------------------------------------------------------------------------------------------
Sec. 418.1135(c)-(e), Sec. 418.1140(b)-(d), 104,725 1 30 52,363
Sec. 418.1320(a)(1)-(2)......................
Sec. 418.1150, Sec. 418.1320(a)(2).......... 300 1 30 150
Sec. 418.1005(c), Sec. 418.1201, Sec. .............. .............. .............. 1
418.1215, Sec. 418.1220, Sec. 418.1225,
Sec. 418.1230, Sec. 418.1320(a)(4).........
Sec. 418.1240(c)-d, Sec. 418.1245, Sec. 42,260 1 30 21,130
418.1250.......................................
Sec. 418.1310, Sec. 418.1315................ 6,698 1 30 3,349
Sec. 418.1340................................. 200 1 30 100
---------------------------------------------------------------
Total....................................... 154,183 .............. .............. 77,093
----------------------------------------------------------------------------------------------------------------
An Information Collection Request has been submitted to OMB for
clearance. We are soliciting comments on the burden estimate; the need
for the information; its practical utility; ways to enhance its
quality, utility, and clarity; and on ways to minimize the burden on
respondents, including the use of automated collection techniques or
other forms of information technology. Comments should be submitted
and/or faxed to OMB and SSA at the following addresses/numbers:
Office of Management and Budget, Attn: Desk Officer for SSA, Fax
Number: 202-395-6974.
Social Security Administration, Attn: SSA Reports Clearance Officer,
Rm. 1338 Annex Building, 6401 Security Boulevard, Baltimore, MD 21235-
6401. Fax Number: 410-965-6400.
Comments can be received for up to 60 days after publication of
this notice and will be most useful if received within 30 days of
publication. To receive a copy of the OMB clearance package, you may
call the SSA Reports Clearance Officer at 410-965-0454.
(Catalog of Federal Domestic Assistance Program Nos. 93.773,
Medicare--Hospital Insurance and 93.774, Medicare--Supplementary
Medical Insurance Program)
List of Subjects in 20 CFR Part 418
Administrative practice and procedure, Aged, Blind, Disability
benefits, Public assistance programs, Reporting and recordkeeping
requirements, Supplemental Security Income (SSI), Medicare subsidies.
Dated: February 27, 2006.
Jo Anne B. Barnhart,
Commissioner of Social Security.
For the reasons set out in the preamble, we propose to add a new
[[Page 10932]]
subpart B to part 418 of chapter III of title 20 of the Code of Federal
Regulations as follows:
PART 418--MEDICARE SUBSIDIES
Subpart B--Medicare Part B Income-Related Monthly Adjustment Amount
Introduction, General Provisions, and Definitions
Sec.
418.1001 What is this subpart about?
418.1005 Purpose and administration.
418.1010 Definitions.
Determination of the Income-Related Monthly Adjustment Amount
418.1101 What is the income-related monthly adjustment amount?
418.1105 What is the threshold?
418.1110 What are the modified adjusted gross income ranges?
418.1115 How do we determine your income-related monthly adjustment
amount?
418.1120 What is the effective date of our initial determination
about your income-related monthly adjustment amount?
418.1125 How will the income-related monthly adjustment amount
affect your total Medicare Part B premium?
418.1130 How will we phase in the income-related monthly adjustment
amount?
418.1135 What modified adjusted gross income information will we use
to determine your income-related monthly adjustment amount?
418.1140 What will happen if the modified adjusted gross income
information from IRS is different from the modified adjusted gross
income information we used to determine your income-related monthly
adjustment amount?
418.1145 How do we determine your income-related monthly adjustment
amount if IRS does not provide information about your modified
adjusted gross income?
418.1150 When will we use your amended tax return filed with IRS?
Determinations Using a More Recent Tax Year's Modified Adjusted Gross
Income
418.1201 When will we determine your income-related monthly
adjustment amount based on the modified adjusted gross income
information that you provide for a more recent tax year?
418.1205 What is a major life-changing event?
418.1210 What is not a major life-changing event?
418.1215 What more recent tax year will we use?
418.1220 What evidence will you need to support your request for us
to use a more recent tax year?
418.1225 What kind of major life-changing event evidence will you
need to support your request?
418.1230 What kind of significant modified adjusted gross income
reduction evidence will you need to support your request?
418.1235 What is the effective date of an income-related monthly
adjustment amount initial determination that is based on a more
recent tax year?
418.1240 When will we stop using your more recent tax year's
modified adjusted gross income to determine your income-related
monthly adjustment amount?
418.1245 Should you notify us if your modified adjusted gross income
for the more recent tax year changes?
418.1250 What will happen if you notify us that your modified
adjusted gross income for the more recent tax year changes?
Determinations and the Administrative Review Process
418.1301 What is an initial determination regarding your income-
related monthly adjustment amount?
418.1303 What is not an initial determination regarding your income-
related monthly adjustment amount?
418.1305 How will we notify you and what information will we provide
about our initial determination?
418.1310 What is the effect of an initial determination?
418.1315 When may you request a reconsideration?
418.1320 When may you request that we make a new initial
determination?
418.1325 What are the rules for the administrative review process?
418.1330 Is reopening of a determination or decision ever
appropriate?
418.1335 Can you request a reconsideration when you believe the IRS
information we used is incorrect?
418.1340 What should you do if our initial determination is based on
modified adjusted gross income information you believe to be
incorrect?
Subpart B--Medicare Part B Income-Related Monthly Adjustment Amount
Authority: Secs. 702(a)(5) and 1839(i) of the Social Security
Act (42 U.S.C. 902(a)(5) and 1395r(i)).
Introduction, General Provisions, and Definitions
Sec. 418.1001 What is this subpart about?
This subpart relates to section 1839(i) of the Social Security Act
(the Act), as added by section 811 of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (Pub. L. 108-173). Section
1839(i) establishes an income-related monthly adjustment to the
Medicare Part B premium. Beneficiaries enrolled in Medicare Part B who
have modified adjusted gross income over a threshold amount established
in the statute will pay an income-related monthly adjustment amount in
addition to the Medicare Part B standard monthly premium and any
applicable premium increases as described in 42 CFR 408.20. The
regulations in this subpart explain how we decide whether you are
required to pay an income-related monthly adjustment amount and the
amount of your adjustment. The rules are divided into the following
groups of sections:
(a) Sections 418.1001 through 418.1010 contain the introduction, a
statement of the general purpose of the income-related monthly
adjustment amount, general provisions that apply to the income-related
monthly adjustment amount, and definitions of terms that we use in this
subpart.
(b) Sections 418.1101 through 418.1150 describe what information
about your modified adjusted gross income we will use to determine if
you are required to pay an income-related monthly adjustment amount. In
these sections, we also describe how the income-related monthly
adjustment amount will affect your total Medicare Part B premium. These
sections also explain how the income-related monthly adjustment amount
will be phased in from calendar year 2007 through calendar year 2009.
(c) Sections 418.1201 through 418.1250 contain an explanation of
the standards that you must meet for us to grant your request to use
modified adjusted gross income information that you provide for a more
recent tax year rather than the information described in paragraph (b)
of this section. These sections explain when we may consider such a
request, and the evidence that you will be required to provide. These
sections also explain when income-related monthly adjustment amount
determinations based on information you provide will be effective, and
how long they will remain in effect. Additionally, these sections
describe how retroactive adjustments of the income-related monthly
adjustment amount will be made based on information you provide,
updated information you provide and information we later receive from
the Internal Revenue Service (IRS).
(d) Sections 418.1301 through 418.1340 contain the rules that we
will apply when you disagree with our determination regarding your
income-related monthly adjustment amount. These sections explain your
appeal rights and the circumstances under which you may request that we
make a new initial determination of your income-related monthly
adjustment amount.
Sec. 418.1005 Purpose and administration.
(a) The purpose of the income-related monthly adjustment amount is
to reduce the Federal subsidy of the Medicare Part B program for
beneficiaries with modified adjusted gross income above an established
threshold. These beneficiaries will pay a greater share of
[[Page 10933]]
actual program costs. Medicare Part B premiums paid by beneficiaries
cover approximately 25 percent of total Medicare Part B program costs
and the remaining 75 percent of program costs are subsidized by the
Federal Government's contributions to the Federal Supplementary Medical
Insurance Trust Fund. The reduction in the Medicare Part B premium
subsidy results in an increase in the total amount that affected
beneficiaries pay for Medicare Part B coverage. A beneficiary with
modified adjusted gross income above the threshold amount will pay:
(1) The Medicare Part B standard monthly premium; plus
(2) Any applicable increase in the standard monthly premium for
late enrollment or reenrollment; plus
(3) An income-related monthly adjustment amount.
(b) The Centers for Medicare & Medicaid Services (CMS) in the
Department of Health and Human Services (HHS) publishes the Medicare
Part B standard monthly premium each year. CMS also establishes rules
for entitlement to a nonstandard premium, as well as premium penalties
for late enrollment or reenrollment (42 CFR 408.20 through 408.27).
(c) We use information that we get from IRS to determine if
beneficiaries who are enrolled in Medicare Part B are required to pay
an income-related monthly adjustment amount. We also change income-
related monthly adjustment amount determinations using information
provided by a beneficiary under certain circumstances. In addition, we
notify beneficiaries when the social security benefit amounts they
receive will change based on our income-related monthly adjustment
amount determination.
Sec. 418.1010 Definitions.
(a) Terms relating to the Act and regulations. For the purposes of
this subpart:
(1) Administrator means the Administrator of the Centers for
Medicare & Medicaid Services (CMS).
(2) CMS means the Centers for Medicare & Medicaid Services in the
Department of Health and Human Services.
(3) Commissioner means the Commissioner of Social Security.
(4) IRS means the Internal Revenue Service in the Department of the
Treasury.
(5) Section means a section of the regulations in this part unless
the context indicates otherwise.
(6) The Act means the Social Security Act, as amended.
(7) Title means a title of the Act.
(8) We, our, or us means the Social Security Administration (SSA).
(b) Miscellaneous. For the purposes of this subpart:
(1) Amended tax return means a Federal income tax return for which
an amended tax return using the required IRS form(s) has been filed by
an individual or couple and accepted by IRS.
(2) Effective year means the calendar year for which we make an
income-related monthly adjustment amount determination.
(3) Federal premium subsidy is the portion of the full cost of
providing Medicare Part B coverage that is paid by the Federal
Government through transfers into the Federal Supplementary Medical
Insurance Trust Fund.
(4) Income-related monthly adjustment amount is an additional
amount of premium that you will pay for Medicare Part B coverage if you
have income above the threshold. The amount of your income-related
monthly adjustment amount is based on your modified adjusted gross
income.
(5) Medicare Part B standard monthly premium means the monthly
Medicare Part B premium amount which is set annually by CMS, according
to regulations in 42 CFR 408.20 through 408.27.
(6) Modified adjusted gross income is your adjusted gross income as
defined by the Internal Revenue Code, plus the following forms of tax-
exempt income:
(i) Tax-exempt interest income;
(ii) Income from United States savings bonds used to pay higher
education tuition and fees;
(iii) Foreign earned income;
(iv) Income derived from sources within Guam, American Samoa, or
the Northern Mariana Islands; and
(v) Income from sources within Puerto Rico.
(7) Modified adjusted gross income ranges are the four bands of
modified adjusted gross income above the threshold. The dollar amounts
of the modified adjusted gross income ranges are specified in Sec.
418.1110.
(8) Non-standard premium means a Medicare Part B premium that some
beneficiaries pay for Medicare Part B, rather than the standard
premium. The rules for applying a non-standard premium are in 42 CFR
408.20(e). The non-standard premium does not apply to beneficiaries who
must pay an income-related monthly adjustment amount.
(9) Premium is a payment that an enrolled beneficiary pays for
Medicare Part B coverage. The rules that CMS uses to annually establish
the premium amount are found in 42 CFR 408.20 through 408.27.
(10) Representative means an individual as defined in Sec.
404.1703 of this chapter.
(11) Tax filing status means the filing status shown on your
individual income tax return. It may be single, married filing jointly,
married filing separately, head of household, or qualifying widow(er)
with dependent child.
(12) Threshold means a modified adjusted gross income amount above
which the beneficiary will have to pay an income-related monthly
adjustment amount described in paragraph (b)(3) of this section. The
dollar amount of the threshold is specified in Sec. 418.1105.
(13) You or your means the person or representative of the person
who is subject to the income-related monthly adjustment amount.
Determination of the Income-Related Monthly Adjustment Amount
Sec. 418.1101 What is the income-related monthly adjustment amount?
(a) The income-related monthly adjustment amount is an amount that
you will pay in addition to the Medicare Part B standard monthly
premium plus any applicable increase in that premium as described in 42
CFR 408.22 for your Medicare Part B coverage when your modified
adjusted gross income is above the threshold described in Sec.
418.1105.
(b) Your income-related monthly adjustment amount is based on your
applicable modified adjusted gross income as described in Sec.
418.1110 and your tax filing status.
(c) We will determine your income-related monthly adjustment amount
using the method described in Sec. 418.1115 and Sec. 418.1130.
Sec. 418.1105 What is the threshold?
(a) The threshold is a level of modified adjusted gross income
above which the beneficiary will have to pay the income-related monthly
adjustment amount.
(b) In 2007, the modified adjusted gross income threshold is
$80,000 for individuals with a Federal income tax filing status of
single, married filing separately, head of household, and qualifying
widow(er) with dependent child. The threshold is $160,000 for
individuals with a Federal income tax filing status of married filing
jointly.
(c) Starting at the end of calendar year 2007 and each year
thereafter, the threshold amounts for the following year will be set by
CMS by increasing the preceding year's threshold amount by the
percentage increase in the Consumer Price Index rounded to the
[[Page 10934]]
nearest $1,000. CMS will publish the threshold amounts annually in
September in the Federal Register. Published threshold amounts will be
effective January 1 of the next calendar year, for the full calendar
year.
Sec. 418.1110 What are the modified adjusted gross income ranges?
(a) The 2007 modified adjusted gross income ranges for each Federal
tax filing category are listed in paragraphs (b), (c) and (d) of this
section. We will use your modified adjusted gross income amount
together with your tax filing status to determine the amount of your
income-related monthly adjustment.
(b) In 2007, the modified adjusted gross income ranges for
individuals with a Federal tax filing status of single, head of
household, qualifying widow(er) with dependent child, and married
filing separately when the individual has lived apart from his/her
spouse for the entire tax year for the year we use to make our income-
related monthly adjustment amount determination are as follows:
(1) Greater than $80,000 and less than or equal to $100,000;
(2) Greater than $100,000 and less than or equal to $150,000;
(3) Greater than $150,000 and less than or equal to $200,000; and
(4) Greater than $200,000.
(c) In 2007, the modified adjusted gross income ranges for
individuals who are married and filed a joint tax return for the tax
year we use to make the income-related monthly adjustment amount
determination are as follows:
(1) Greater than $160,000 and less than or equal to $200,000;
(2) Greater than $200,000 and less than or equal to $300,000;
(3) Greater than $300,000 and less than or equal to $400,000; and
(4) Greater than $400,000.
(d) In 2007, the modified adjusted gross income ranges for married
individuals who file a separate return and have lived with their spouse
at any time during the tax year we use to make the income-related
monthly adjustment amount determination are as follows:
(1) Greater than $80,000 and less than or equal to $120,000; and
(2) Greater than $120,000.
(e) CMS will annually revise the modified adjusted gross income
ranges and publish them in the Federal Register starting in September
of 2007 for 2008. Each year thereafter, all modified adjusted gross
income range amounts will be set by CMS by increasing the preceding
year's modified adjusted gross income range amounts by any percentage
increase in the Consumer Price Index rounded to the nearest $1,000, and
CMS will publish the amounts for the following year in September of
each year.
Sec. 418.1115 How do we determine your income-related monthly
adjustment amount?
(a) We will determine your income-related monthly adjustment amount
using your tax filing status and modified adjusted gross income.
(b) Tables of applicable percentage. The tables in paragraphs
(b)(1) through (b)(3) of this section contain the modified adjusted
gross income ranges for 2007 in the column on the left in each table.
The middle column in each table shows the percentage of the
unsubsidized Medicare Part B premium that will be paid by individuals
with modified adjusted gross income that falls within each of the
ranges. The column on the right in each table shows the percentage of
the unsubsidized Medicare Part B premium that will be subsidized by the
Federal Supplementary Medical Insurance Trust Fund. Based on your tax
filing status for the tax year we use to make a determination about
your income-related monthly adjustment amount, we will determine which
table is applicable to you. We will use your modified adjusted gross
income to determine which income-related monthly adjustment amount to
apply to you. The dollar amount of income-related monthly adjustment
for each range will be set annually as described in paragraph (c) of
this section. The modified adjusted gross income ranges will be
adjusted annually as described in Sec. 418.1110(e).
(1) General table of applicable percentages. If your filing status
for your Federal income taxes for the tax year we use is single; head
of household; qualifying widow(er) with dependent child; or married
filing separately and you lived apart from your spouse for the entire
tax year, we will use the general table of applicable percentages. When
your modified adjusted gross income for the year we use is in the range
listed in the left column in the following table, then the Federal
Supplementary Medical Insurance Trust Fund premium subsidy of 75
percent is reduced to the percentage listed in the right column. You
will pay an amount based on the percentage listed in the center column.
------------------------------------------------------------------------
Federal
Modified adjusted gross income Beneficiary premium
effective in 2007 premium subsidy
(percent) (percent)
-----------------------------------------------------------------------
More than $80,000 but less than or 35 65
equal to $100,000....................
More than $100,000 but less than or 50 50
equal to $150,000....................
More than $150,000 but less than or 65 35
equal to $200,000....................
More than $200,000.................... 80 20
------------------------------------------------------------------------
(2) Table of applicable percentages for joint returns. If your
Federal tax filing status is married filing jointly for the tax year we
use and your modified adjusted gross income for that tax year is in the
range listed in the left column in the following table, then the
Federal Supplementary Medical Insurance Trust Fund premium subsidy of
75 percent is reduced to the percentage listed in the right column. You
will pay an amount based on the percentage listed in the center column.
------------------------------------------------------------------------
Federal
Modified adjusted gross income Beneficiary premium
effective in 2007 premium subsidy
(percent) (percent)
-----------------------------------------------------------------------
More than $160,000 but less than or 35 65
equal to $200,000....................
More than $200,000 but less than or 50 50
equal to $300,000....................
More than $300,000 but less than or 65 35
equal to $400,000....................
[[Page 10935]]
More than $400,000.................... 80 20
------------------------------------------------------------------------
(3) Table of applicable percentages for married individuals filing
separate returns. If your Federal tax filing status for the tax year we
use is married filing separately and you lived with your spouse at some
time during that tax year, and your modified adjusted gross income is
in the range listed in the left column in the following table, then the
Federal Supplementary Medical Insurance Trust Fund premium subsidy of
75 percent is reduced to the percentage listed in the right column. You
will pay an amount based on the percentage listed in the center column.
------------------------------------------------------------------------
Federal
Modified adjusted gross income Beneficiary premium
effective in 2007 premium subsidy
(percent) (percent)
-------------------------
