Reduction in premium subsidy based on income
(1) In general
(1)In general#
In the case of an individual whose modified adjusted gross income exceeds the threshold amount under paragraph (2), the monthly amount of the premium subsidy applicable to the premium under this section for a month after December 2006 shall be reduced (and the monthly premium shall be increased) by the monthly adjustment amount specified in paragraph (3).
(2)Threshold amount#
For purposes of this subsection, subject to paragraph (6), the threshold amount is—
(A) except as provided in subparagraph (B), $80,000 (or, beginning with 2018, $85,000), and
(B) in the case of a joint return, twice the amount applicable under subparagraph (A) for the calendar year.
(2)(A)#
except as provided in subparagraph (B), $80,000 (or, beginning with 2018, $85,000), and
(2)(B)#
in the case of a joint return, twice the amount applicable under subparagraph (A) for the calendar year.
(3)Monthly adjustment amount#
(A) In general Subject to subparagraph (B), the monthly adjustment amount specified in this paragraph for an individual for a month in a year is equal to the product of the following: (i) Sliding scale percentage Subject to paragraph (6), the applicable percentage specified in the applicable table in subparagraph (C) for the individual minus 25 percentage points. (ii) Unsubsidized part B premium amount (I) 200 percent of the monthly actuarial rate for enrollees age 65 and over (as determined under subsection (a)(1) for the year); plus (II) 4 times the amount of the increase in the monthly premium under subsection (a)(6) for a month in the year (or, with respect to an individual enrolled under section 1395 o (b) of this title and not otherwise enrolled under this part, 0 times the amount of such increase).
(B) 3-year phase in The monthly adjustment amount specified in this paragraph for an individual for a month in a year before 2009 is equal to the following percentage of the monthly adjustment amount specified in subparagraph (A): (i) For 2007, 33 percent. (ii) For 2008, 67 percent.
(C) Applicable percentage (i) In general (I) Subject to paragraphs (5) and (6), for years before 2018:
| If the modified adjusted gross income is: | The applicable percentage is: |
|---|---|
| More than $80,000 but not more than $100,000 | 35 percent |
| More than $100,000 but not more than $150,000 | 50 percent |
| More than $150,000 but not more than $200,000 | 65 percent |
| More than $200,000 | 80 percent. |
(II) Subject to paragraph (5), for 2018:
| If the modified adjusted gross income is: | The applicable percentage is: |
|---|---|
| More than $85,000 but not more than $107,000 | 35 percent |
| More than $107,000 but not more than $133,500 | 50 percent |
| More than $133,500 but not more than $160,000 | 65 percent |
| More than $160,000 | 80 percent. |
(III) Subject to paragraph (5), for years beginning with 2019:
| If the modified adjusted gross income is: | The applicable percentage is: |
|---|---|
| More than $85,000 but not more than $107,000 | 35 percent |
| More than $107,000 but not more than $133,500 | 50 percent |
| More than $133,500 but not more than $160,000 | 65 percent |
| More than $160,000 but less than $500,000 | 80 percent |
| At least $500,000 | 85 percent. |
(ii) Joint returns In the case of a joint return, clause (i) shall be applied by substituting dollar amounts which are twice the dollar amounts otherwise applicable under clause (i) for the calendar year except, with respect to the dollar amounts applied in the last row of the table under subclause (III) of such clause (and the second dollar amount specified in the second to last row of such table), clause (i) shall be applied by substituting dollar amounts which are 150 percent of such dollar amounts for the calendar year. (iii) Married individuals filing separate returns In the case of an individual who— (I) is married as of the close of the taxable year (within the meaning of section 7703 of the Internal Revenue Code of 1986) but does not file a joint return for such year, and (II) does not live apart from such individual’s spouse at all times during the taxable year, clause (i) shall be applied by reducing each of the dollar amounts otherwise applicable under such clause for the calendar year by the threshold amount for such year applicable to an unmarried individual.
(4)Modified adjusted gross income#
(A) In general For purposes of this subsection, the term “modified adjusted gross income” means adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1986)— (i) determined without regard to sections 135, 911, 931, and 933 of such Code; and (ii) increased by the amount of interest received or accrued during the taxable year which is exempt from tax under such Code. In the case of an individual filing a joint return, any reference in this subsection to the modified adjusted gross income of such individual shall be to such return’s modified adjusted gross income.
(B) Taxable year to be used in determining modified adjusted gross income (i) In general In applying this subsection for an individual’s premiums in a month in a year, subject to clause (ii) and subparagraph (C), the individual’s modified adjusted gross income shall be such income determined for the individual’s last taxable year beginning in the second calendar year preceding the year involved. (ii) Temporary use of other data If, as of October 15 before a calendar year, the Secretary of the Treasury does not have adequate data for an individual in appropriate electronic form for the taxable year referred to in clause (i), the individual’s modified adjusted gross income shall be determined using the data in such form from the previous taxable year. Except as provided in regulations prescribed by the Commissioner of Social Security in consultation with the Secretary, the preceding sentence shall cease to apply when adequate data in appropriate electronic form are available for the individual for the taxable year referred to in clause (i), and proper adjustments shall be made to the extent that the premium adjustments determined under the preceding sentence were inconsistent with those determined using such taxable year. (iii) Non-filers In the case of individuals with respect to whom the Secretary of the Treasury does not have adequate data in appropriate electronic form for either taxable year referred to in clause (i) or clause (ii), the Commissioner of Social Security, in consultation with the Secretary, shall prescribe regulations which provide for the treatment of the premium adjustment with respect to such individual under this subsection, including regulations which provide for— (I) the application of the highest applicable percentage under paragraph (3)(C) to such individual if the Commissioner has information which indicates that such individual’s modified adjusted gross income might exceed the threshold amount for the taxable year referred to in clause (i), and (II) proper adjustments in the case of the application of an applicable percentage under subclause (I) to such individual which is inconsistent with such individual’s modified adjusted gross income for such taxable year.
(C) Use of more recent taxable year (i) In general The Commissioner of Social Security in consultation with the Secretary of the Treasury shall establish a procedures under which an individual’s modified adjusted gross income shall, at the request of such individual, be determined under this subsection— (I) for a more recent taxable year than the taxable year otherwise used under subparagraph (B), or (II) by such methodology as the Commissioner, in consultation with such Secretary, determines to be appropriate, which may include a methodology for aggregating or disaggregating information from tax returns in the case of marriage or divorce. (ii) Standard for granting requests A request under clause (i)(I) to use a more recent taxable year may be granted only if— (I) the individual furnishes to such Commissioner with respect to such year such documentation, such as a copy of a filed Federal income tax return or an equivalent document, as the Commissioner specifies for purposes of determining the premium adjustment (if any) under this subsection; and (II) the individual’s modified adjusted gross income for such year is significantly less than such income for the taxable year determined under subparagraph (B) by reason of the death of such individual’s spouse, the marriage or divorce of such individual, or other major life changing events specified in regulations prescribed by the Commissioner in consultation with the Secretary.
(5)Inflation adjustment#
(A) In general Subject to subparagraph (C), in the case of any calendar year beginning after 2007 (other than 2018 and 2019), each dollar amount in paragraph (2) or (3) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period ending with August 2006 (or, in the case of a calendar year beginning with 2020, August 2018).
(B) Rounding If any dollar amount after being increased under subparagraph (A) or (C) is not a multiple of $1,000, such dollar amount shall be rounded to the nearest multiple of $1,000.
(C) Treatment of adjustments for certain higher income individuals (i) In general Subparagraph (A) shall not apply with respect to each dollar amount in paragraph (3) of $500,000. (ii) Adjustment beginning 2028 In the case of any calendar year beginning after 2027, each dollar amount in paragraph (3) of $500,000 shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period ending with August 2026.
(5)(A)In general#
Subject to subparagraph (C), in the case of any calendar year beginning after 2007 (other than 2018 and 2019), each dollar amount in paragraph (2) or (3) shall be increased by an amount equal to—
(i) such dollar amount, multiplied by
(ii) the percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period ending with August 2006 (or, in the case of a calendar year beginning with 2020, August 2018).
(6)Temporary adjustment to income thresholds#
Notwithstanding any other provision of this subsection, during the period beginning on January 1, 2011 , and ending on December 31, 2017 —
(A) the threshold amount otherwise applicable under paragraph (2) shall be equal to such amount for 2010; and
(B) the dollar amounts otherwise applicable under paragraph (3)(C)(i) shall be equal to such dollar amounts for 2010.
(6)(A)#
the threshold amount otherwise applicable under paragraph (2) shall be equal to such amount for 2010; and
(6)(B)#
the dollar amounts otherwise applicable under paragraph (3)(C)(i) shall be equal to such dollar amounts for 2010.
(7)Joint return defined#
For purposes of this subsection, the term “joint return” has the meaning given to such term by section 7701(a)(38) of the Internal Revenue Code of 1986.