Medicare Premiums: 

Rules For Higher-Income 

Beneficiaries

2015
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What’s Inside

Rules for higher-income beneficiaries . . . . . . . . 4

How does this affect me? . . . . . . . . . . . . . . . . . . . 4

How does Social Security determine 

if I must pay higher premiums? . . . . . . . . . . . . . 5

Which tax return does Social Security use? . . . . 6

What if my income has gone down? . . . . . . . . . . 7

Monthly Medicare premiums for 2015 . . . . . . . . 8

What if I disagree? . . . . . . . . . . . . . . . . . . . . . . . 10

How can I get more information? . . . . . . . . . . . 11
4

Rules for higher-income beneficiaries

If you have higher income, the law requires an 

adjustment to your monthly Medicare Part B (medical 

insurance) and Medicare prescription drug coverage 

premiums. Higher-income beneficiaries pay higher 

premiums for Part B and prescription drug coverage. This 

affects less than 5 percent of people with Medicare, so most 

people don’t pay a higher premium.

How does this affect me?

If you have higher income, you’ll pay an additional 

premium amount for Medicare Part B and Medicare 

prescription drug coverage. We call the additional amount, 

the income-related monthly adjustment amount. Here’s 

how it works:

• Part B helps pay for your doctors’ services and outpatient 

care. It also covers other medical services, such as 

physical and occupational therapy, and some home 

health care. For most beneficiaries, the government 

pays a substantial portion—about 75 percent—of the 

Part B premium, and the beneficiary pays the remaining 

25 percent.

If you’re a higher-income beneficiary, you’ll pay a larger 

percentage of the total cost of Part B based on the income 

you report to the Internal Revenue Service (IRS). You’ll 

pay monthly Part B premiums equal to 35, 50, 65, or 80 

percent of the total cost, depending on what you report to 

the IRS.

• Medicare prescription drug coverage helps pay for 

your prescription drugs. For most beneficiaries, the 

government pays a major portion of the total costs 

for this coverage, and the beneficiary pays the rest. 

Prescription drug plan costs vary depending on the plan, 

and whether you get Extra Help with your portion of the 

Medicare prescription drug coverage costs.
5

If you’re a higher-income beneficiary with Medicare 

prescription drug coverage, you’ll pay monthly premiums 

plus an additional amount, which is based on what you 

report to the IRS. Because individual plan premiums 

vary, the law specifies that the amount is determined 

using a base premium. We tie the additional amount 

you pay to the base beneficiary premium, not your own 

premium amount. If you’re a higher-income beneficiary, 

we deduct this amount from your monthly Social 

Security payments regardless of how you usually pay 

your monthly prescription plan premiums. If the amount 

is greater than your monthly payment from Social 

Security, or you don’t get monthly payments, you’ll 

get a separate bill from another federal agency, such as 

the Centers for Medicare & Medicaid Services or the 

Railroad Retirement Board.

How does Social Security determine if I must pay 

higher premiums?

To determine if you’ll pay higher premiums, Social 

Security uses the most recent federal tax return the IRS 

provides to us. If you must pay higher premiums, we use 

a sliding scale to make the adjustments, based on your 

modified adjusted gross income (MAGI). Your MAGI is your 

total adjusted gross income and tax-exempt interest income.

If you file your taxes as “married, filing jointly” and your 

MAGI is greater than $170,000, you’ll pay higher premiums 

for your Part B and Medicare prescription drug coverage. 

If you file your taxes using a different status, and your 

MAGI is greater than $85,000, you’ll pay higher premiums. 

(See the chart on pages 8-9 for an idea of what you can 

expect to pay.)

If you must pay higher premiums, we’ll send you a 

letter with your premium amount(s) and the reason for 

our determination. If you have both Medicare Part B and 

Medicare prescription drug coverage, you’ll pay higher 

premiums for each. If you have only one—Medicare Part 

B or Medicare prescription drug coverage—you’ll pay 
6

an income-related monthly adjustment amount only on 

the benefit you have. If you decide to enroll in the other 

program later in the same year, and you already are paying 

an income-related monthly adjustment amount, we’ll apply 

an adjustment automatically to the other program when 

you enroll. In this case, we won’t send you another letter 

explaining how we made this determination.

Remember, if your income isn’t greater than the limits 

described above, this law does not apply to you.

Which tax return does Social Security use?

To determine your 2015 income-related monthly 

adjustment amounts, we use your most recent federal tax 

return the IRS provides to us. Generally, this information 

is from a tax return filed in 2014 for tax year 2013. 

Sometimes, the IRS only provides information from a 

return filed in 2013 for tax year 2012. If we use the 2012 tax 

year data, and you filed a return for tax year 2013 or did not 

need to file a tax return for tax year 2013, call us or visit 

any local Social Security office. We’ll update our records.

If you amended your tax return, and it changes the 

income we count to determine the income-related monthly 

adjustment amounts, let us know. Social Security needs 

to see a copy of the amended tax return you filed and 

your acknowledgment receipt from IRS. We’ll update our 

records with the information you provide, and correct or 

remove your income-related monthly adjustment amounts, 

as appropriate.
7

What if my income has gone down?

If your income has gone down due to any of the following 

situations, and the change makes a difference in the income 

level we consider, contact us to explain that you have 

new information and may need a new decision about your 

income-related monthly adjustment amount:

• You married, divorced, or became widowed;

• You or your spouse stopped working or reduced your 

work hours;

• You or your spouse lost income-producing property 

because of a disaster or other event beyond your control;

• You or your spouse experienced a scheduled cessation, 

termination, or reorganization of an employer’s pension 

plan; or

• You or your spouse received a settlement from an 

employer or former employer because of the employer’s 

closure, bankruptcy, or reorganization.

If any of the above applies to you, we need to see 

documentation verifying the event and the reduction in 

your income. The documentation you provide should relate 

to the event and may include a death certificate, a letter 

from your employer about your retirement, or something 

similar. If you filed a federal income tax return for the 

year in question, you need to show us your signed copy of 

the return.
8

Monthly Medicare premiums for 2015

The standard Part B premium for 2015 is $104.90. If you’re 

single and filed an individual tax return, or married and filed 

a joint tax return, the following chart applies to you:

Modified Adjusted 

Gross Income (MAGI)

Part B 

monthly 

premium 

amount

Prescription 

drug coverage monthly 

premium 

amount

Individuals with a MAGI 

of $85,000 or less

Married couples with a 

MAGI of $170,000 or less

2015 

standard 

premium= 

$104.90

Your plan 

premium

Individuals with a MAGI 

above $85,000 up to $107,000

Married couples with a MAGI 

above $170,000 up to $214,000

Standard 

premium 

+ $42.00

Your plan 

premium 

+ $12.30

Individuals with a MAGI above 

$107,000 up to $160,000

Married couples with a MAGI 

above $214,000 up to $320,000

Standard 

premium 

+ $104.90

Your plan 

premium 

+ $31.80

Individuals with a MAGI above 

$160,000 up to $214,000

Married couples with a MAGI 

above $320,000 up to $428,000

Standard 

premium 

+ $167.80

Your plan 

premium 

+ $51.30

Individuals with a MAGI 

above $214,000

Married couples with a 

MAGI above $428,000

Standard 

premium 

+ $230.80

Your plan 

premium 

+ $70.80
9

If you’re married and lived with your spouse at some 

time during the taxable year, but filed a separate tax return, 

the following chart applies to you:

Modified Adjusted 

Gross Income (MAGI)

Part B 

monthly 

premium 

amount

Prescription 

drug coverage 

monthly 

premium 

amount

Individuals with a MAGI 

of $85,000 or less

2015 

standard 

premium= 

$104.90

Your plan 

premium

Individuals with a MAGI above 

$85,000 up to $129,000

Standard 

premium 

+ $167.80

Your plan 

premium 

+ $51.30

Individuals with a MAGI 

above $129,000

Standard 

premium 

+ $230.80

Your plan 

premium 

+ $70.80
10

What if I disagree?

If you disagree with the decision about your incomerelated monthly adjustment amounts, you have the right to 

appeal. You may request an appeal in writing by completing 

a Request for Reconsideration (Form SSA-561-U2), or 

you may contact your local Social Security office to 

file your appeal. You can find the appeal form online 

at www.socialsecurity.gov/online or request a copy 

through our toll-free number at 1-800-772-1213 (TTY 

1-800-325-0778). You don’t need to file an appeal if you’re 

requesting a new decision because you experienced one 

of the events listed on page 7 and, it made your income 

go down, or if you’ve shown us the information we used 

is wrong.

If you disagree with the MAGI amount we received 

from the IRS, you must correct the information with the 

IRS. If we determine you must pay a higher amount for 

Medicare prescription drug coverage, and you don’t have 

this coverage, you must call the Centers for Medicare 

& Medicaid Services (CMS) at 1-800-MEDICARE

(1-800-633-4227; TTY 1-877-486-2048) to make a 

correction. Social Security receives the information about 

your prescription drug coverage from CMS.
11

How can I get more information?

For more information about the income-related monthly 

adjustment amounts or to apply for Medicare Part A or B, 

please visit www.socialsecurity.gov/mediinfo.htm, or call 

Social Security at 1-800-772-1213 (TTY 1-800-325-0778).

To enroll in Medicare prescription drug coverage, 

find more information about what Medicare covers, or 

request a copy of the Medicare & You handbook, please 

visit www.medicare.gov, or call 1-800-MEDICARE 

(1-800-633-4227; TTY 1-877-486-2048). Your State Health 

Insurance Counseling and Assistance Program (SHIP) also 

can help answer your Medicare questions. You can find 

your local SHIP contact information in the back of your 

Medicare handbook, online at www.medicare.gov, or you 

can request it when you call.

If you have limited resources and income, you may 

be able to get Extra Help with the costs—monthly 

premiums, annual deductibles, and prescription 

copayments—related to Medicare prescription drug 

coverage. For more information about getting Extra Help 

with your Medicare prescription drug coverage costs, visit 

www.socialsecurity.gov/extrahelp, or call Social Security 

at 1-800-772-1213 (TTY 1-800-325-0778). Social Security 

representatives are available to help you complete your 

application. The sooner you apply the sooner you’ll begin 

receiving benefits.
Printed on recycled paper

Social Security Administration

SSA Publication No. 05-10536

ICN 470149

Unit of Issue-Package of 25

January 2015 (Recycle prior editions)