TN 3 (11-10)

Citations:

1839(i) and Sections of the Social Security Act 1860D(i)

CMS regulations,42 CFR 408.20 – 408.27 and 42 CFR Subpart F;

SSA regulations, 20 CFR Part 418 , Subparts B and C

A. Description of Income-Related Monthly Adjustment Amount

1. Beneficiaries enrolled in:

   • Medicare Part B,

   • Medicare Part B and a Medicare Advantage Plan with prescription drug coverage (MA-PD),

   • Medicare Part B and a Medicare prescription drug plan (PDP), or

   • A Medicare prescription drug plan (PD), and

     have modified adjusted gross income (MAGI), (see HI 01101.010) above the threshold for their tax filing status pay an IRMAA in addition to the monthly premium. IRMAA may also be referred to as the Medicare subsidy reduction.

2. The Internal Revenue Service (IRS) electronically provides the Social Security Administration (SSA) with tax information to determine which enrollees must pay an IRMAA. If the data received from IRS does not indicate that a beneficiary must pay an IRMAA, SSA cannot impose an IRMAA. HI 01101.030 explains which tax year we use when calculating IRMAA.

3. Based on the beneficiary’s tax filing status, there are either two or four levels of IRMAA amounts, which are tied to the beneficiary’s MAGI. The four “sliding scale” levels are described in HI 01101.020.

4. By statute, the income thresholds and income ranges used to determine whether IRMAA applies, were fixed through 2017. The amount of IRMAA due for each level of income changes each year.

   NOTE: The Medicare Access and CHIP Reauthorization Act of 2015 authorized a change in the fixed income thresholds beginning in 2018.

5. Under certain circumstances, beneficiaries can request that we use a more recent taxable year or alternate income information. See HI 01120.001 through HI 01120.065 for information on new initial determinations using beneficiary information.

B. Description of Income-Related Monthly Adjustment Amount for Medicare Part B (IRMAA-B)

1. The Federal government subsidizes the Medicare Part B program. Most Part B enrollees pay a monthly premium representing about 25 percent of the estimated actual cost. See an explanation in HI 00805.001, Supplementary Medical Insurance (Part B).

2. Since January 2007, 4 to 5 % of Medicare Part B enrollees have paid more for their monthly Part B premiums because their income is over a certain level (called an income “threshold”). See HI 01101.010 for an explanation of the MAGI income thresholds.

3. IRMAA is only one part of the cost of a beneficiary’s Part B premium. The amount an IRMAA beneficiary pays for Part B each month consists of:

   1. The Standard premium, plus

   2. Surcharges for late enrollment or reenrollment (if applicable), plus

   3. IRMAA, minus

   4. Medicare Advantage reduction in premium credited (if applicable, see SM 03040.335, Medicare Advantage (MA) Part B Premium Reduction).

4. SSA withholds Medicare Part B premiums from a beneficiary’s benefit payment. If the benefit amount is not enough to cover the Part B deduction, SSA withholds as much as possible and bills the beneficiary for the remaining balance due. If a Medicare enrollee does not receive Title II benefits and:

   • is a Railroad Board(RRB) annuitant, RRB bills for Part B.

   • is a federal retiree,the Office of Personnel Management (OPM) bills for Part B.

   • does not receive benefits from SSA, RRB, or OPM, the Centers for Medicare & Medicaid Services (CMS) bills for Part B.

5. Medicare Part B beneficiaries who pay IRMAA lose any variable Supplemental Medical Insurance (VSMI) premium protection they may have. If a beneficiary loses VSMI protection due to IRMAA, VSMI protection may be reestablished if IRMAA is later removed for that same premium year. To regain the VSMI protection, the conditions for VSMI must be met and the VSMI calculation remains the same.
   See Details:

   • HI 01001.004, The Variable Supplementary Medical Insurance (VSMI) Premium

   • SM 00712.000, SMI Premium Determinations

C. Description of Income-Related Monthly Adjustment Amount for Medicare Prescription Drug Coverage (IRMAA-D)

1. Participation in the Medicare prescription drug coverage program is voluntary. See HI 03001.001, Description of the Medicare Part D Prescription Drug Program.

2. Starting January 2011, enrollees in Medicare prescription drug plans will pay more for their monthly prescription drug coverage premiums if their income is over a certain level (called an income “threshold”). See HI 01101.010 for an explanation of the income thresholds.

3. Regardless of how a beneficiary pays his PDP or MA-PD premium and any late enrollment or reenrollment surcharges, the IRMAA-D will be withheld from the Social Security or OPM benefit payment (RRB bills separately). If the benefit payment is not enough to cover the entire monthly IRMAA-D, CMS bills the beneficiary monthly for the IRMAA-D.

4. Enrollment for Medicare prescription drug coverage is not done with SSA. The beneficiary enrolls or disenrolls with the PDP or MA-PD, who notifies CMS. CMS then notifies SSA of a beneficiary’s enrollment or disenrollment in a Medicare-approved PDP or MA-PD.

5. CMS tells the PDP or MA-PD to cancel coverage if a beneficiary does not pay the IRMAA-D.

D. Acronyms and Terms

1. Acronyms

2. Terms