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How Social Security Determines
You Have a Higher Premium

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 calculate 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 $176,000, 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 $88,000, you’ll pay higher premiums (see the part B table, Modified Adjusted Gross Income (MAGI), 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 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.