This is a sample of the notice that will be sent to a Title 2 beneficiary when we
are currently using a beneficiary estimate or beneficiary supplied copy of a tax return
for PY-1 to determine IRMAA when we previously used PY-3 MAGI. During the verification
data exchange, IRS supplies PY-2 MAGI and PY-1 MAGI. The verified PY-1 MAGI exceeds
PY-2 MAGI. Since use of a more recent tax year, PY-1, does not result in a significant
reduction in IRMAA, we will use PY-2 to determine IRMAA for the Premium Year being
Social Security Administration
Part B Premium
Notice of Planned Action
October 31, 2007
This letter is about your Medicare Part B (Medical Insurance) premiums for 2007. We
received information about your income from the Internal Revenue Service (IRS) that
shows you must pay a higher premium.
Generally, we use two year old tax information from the IRS to determine if you must
pay an income-related premium amount which is added to the standard Medicare premium.
We ask IRS to verify your modified adjusted gross income (MAGI) if we used three year
old tax information instead of two year old tax information or tax information you
gave us to decide your Medicare Part B income-related premium amount. We compare your
MAGI with the income thresholds set by law to make any necessary corrections to your
income-related premium amount.
In this letter, we will tell you what information we received from IRS about your
income and how it will affect your Medicare Part B premium. We also will tell you
what you should do if you have other information about your income.
If you do not contact us within 10 days from the date of this letter, we will assume
the information in this letter is correct and use it to increase your Medicare Part
B premium. We will send another letter at that time. It will explain how much you
owe in Medicare Part B premiums and how to appeal our decision.
The Information We Have
When we matched computer records with the IRS, we learned that your 2006 MAGI was
Based on the information we have, your 2007 monthly Medicare Part B premium will be:
$ 93.50 for the standard Medicare premium, plus
$ 30.90 for the income-related premium amount.
We plan to make this change effective January through December 2007.
How We Decided Your Income-Related Premium Amount
According to the law, we set your 2007 premium based on your modified adjusted gross
income (MAGI) from 2005. The Internal Revenue Service (IRS) told us your MAGI in 2005
was $136,000.00. You had an adjusted gross income of $130,000.00 plus tax-exempt interest
income of $6,000.00 and you filed your taxes with a tax filing status of Single. We
charged you an income-related premium amount of $30.90. MAGI is the sum of your adjusted
gross income plus certain amounts of income that are not taxable. Your adjusted gross
income is from line 37 of the IRS Form-1040 and your tax exempt interest income is
from line 8b of your IRS Form-1040. MAGI may include one-time only income, such as
capital gains, the sale of property, withdrawals from an Individual Retirement Account
(IRA) or conversion from a traditional IRA to a Roth IRA. One-time income will affect
your Medicare Part B premium for only one year.
In February 2007, you reported a life changing event that reduced your 2006 MAGI.
In such circumstances, at your request, we can use a more recent tax year return if
it significantly lowers your MAGI. Therefore, we used the information you provided
for 2006 to change your 2007 income-related premium amount to $12.30 a month.
When we verified the information that you gave us about your 2006 MAGI with IRS, we
discovered that your 2006 MAGI is not significantly less than your 2005 MAGI. IRS
reported that your 2006 MAGI was $151,000.00. You had an adjusted gross income of
$150,000.00 plus tax-exempt interest income of $1,000.00 and you filed your taxes
with a tax filing status of Single. Therefore, we will not use your 2006 MAGI to determine
your 2007 income-related premium amount. We will use your 2005 MAGI information to
determine your 2007 income-related premium amount. Based on your 2005 MAGI, your 2007
income-related premium amount will be $30.90. We used the following table to decide
your 2007 income-related adjustment:
If your filing status was:
And your MAGI range was:
Then your income-related monthly
Single, Head of Household or Qualifying Widow(er)
$ 80,000.01 - $100,000.00
$100,000.01 - $150,000.00
$150,000.01 - $200,000.00
More than $200,000.00
$160,000.01 - $200,000.00
$200,000.01 - $300,000.00
$300,000.01 - $400,000.00
More than $400,000.00
Married, filing separately
$ 80,000.01 - $120,000.00
More than $120,000.00
What You Can Do
We will not use this information from IRS to change your Medicare Part B Premium until
we give you an opportunity to review it. Certain circumstances could change our plan
to increase your premium. Please let us know right away if:
you believe that the information IRS gave us is incorrect, or
you have an amended tax return for 2006 and your MAGI from your amended tax return
is lower than the MAGI information we received from IRS.
For proof of an IRS correction you need to provide either a letter from IRS acknowledging
the correction or a transcript from IRS with new information and a copy of the filed
tax return for the tax year the error occurred.
For proof of an amended tax return you need to provide a copy of the amended tax return
and a receipt letter from IRS or a transcript from IRS if they have not sent you a
receipt letter. If you cannot provide your copy of the amended tax return, you will
need to get a copy of the amended tax return from IRS.
If You Have Any Questions
If you have questions about your Medicare coverage, call 1-800-MEDICARE (1-800-633-4227,
If you have questions about your Medicare Part B premium, please visit www.medicare.gov
on the Internet. For general information, you can visit our website at www.socialsecurity.gov.
You also can call us at 1-800-772-1213 and speak to a representative from 7 a.m. to
7 p.m. on business days. If you have a touch-tone phone, recorded information and
services are available 24 hours a day. We can answer most questions over the phone.
If you are deaf or hard of hearing, you can call our TTY number, 1-800-325-0778. You
can call your local Social Security office at 1-515-576-5185. You can also write or
visit any Social Security office. The office that serves your area is located at:
2000, 20th Floor
If you call or visit an office, please have this letter with you. It will help us
to answer your questions. Also, if you plan to visit an office, you may call ahead
to make an appointment. This will help us serve you more quickly when you arrive at