Beginning January 1, 2007, the premiums for the Medicare Part B Supplementary Medical Insurance program will be based on income, which will raise the premiums for approximately 1.65 million higher-income beneficiaries to as much as 80 percent of the full cost over the 3-year phase-in period. This change, which may be unknown to some beneficiaries, will affect single individuals with incomes over $80,000 and married couples who file jointly with incomes over $160,000. Medicare Part B is a voluntary program administered by the Centers for Medicare & Medicaid Services (CMS) that covers doctors' services, certain outpatient services, and other care. Currently, Medicare Part B beneficiaries generally pay a flat premium of 25 percent (the standard monthly premium) of the cost of the program, with the remaining 75 percent subsidized by the federal government. While CMS administers the program, the Social Security Administration (SSA) is responsible for determining and assessing Medicare Part B income-based premiums once CMS has set the standard premium amount for the year. To better understand how SSA is implementing such premiums, the Senate Committee on Finance requested that we review the process that SSA has established to determine and assess the new premiums.
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