Originally Posted by sailfish
Someone I know started collecting SS in 2010, but retired in 2009 with a high income due to severence & vacation pay. SS based his higher Medicare premium on 2009's income, even though he was way under the amount for a surcharge and is just turning 65 in March of 2011. They ignored 2010's lower income !
The rules are very clear, but from what you write I am not sure what your friend experienced, or exactly what your question is.
If your friend starts Medicare in 2011, his premium will be based on his Medicare adjusted AGI, from page 1 of form 1040 for tax year 2009. If it is not, they have made an error.
Normally his 2010 income could not have anything to do with his 2011 Medicare premiums, because he hasn't even filed his returns.
There are a few well defined special circumstances and exceptions, which are clearly explained on the Medicare website, as well as other websites discussing this issue.