What Is Medicare Part B Good For

Medicare Part B Isn’t Free And It Doesn’t Cover Everything

David J. Rubin is a fact checker for The Balance with more than 30 years in editing and publishing. The majority of his experience lies within the legal and financial spaces. At legal publisher Matthew Bender & Co./LexisNexis, he was a manager of R& D, programmer analyst, and senior copy editor.

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Medicare is a federal health insurance program for Americans who are at least 65 years old, disabled, or have end-stage renal disease or ALS . Its split into four parts: A, B, C, and D. Part B is referred to as medical insurance, and it’s the portion of Medicare that more closely resembles traditional health insurance.

What Are Covered Services Under Part B

Generally speaking medically necessary physician and specialist service and the equipment they need to care for you. Other benefits include outpatient care and durable medical equipment, preventative services and screenings, physical therapy, and physician-administered medicine.

Also known as Part B drugs, this drug plan includes some chemotherapy drugs, cortisone shots for arthritis, and other medicine of that nature. Part B will not cover optional or elective services, such as hearing aids, glasses, alternative health care, routine chiropractic or massage therapies, prescription drug coverages, or custodial care.

However, Medicare will recognize eye diseases, such as cataracts disease, and will cover costs associated with those treatments.

What Is Creditable Coverage For Medicare Part D

Prescription drug plans are the most common type of creditable coverage. A plan is creditable for Medicare Part D if it meets four qualifications.

• Pays at least 60% of the prescription cost
• Covers both brand-name and generic medications
• Offers a variety of pharmacies
• Does not have an annual benefit cap amount or has a low deductible

If you are eligible for Medicare Part D but delay enrollment, you accrue a penalty for each month you are eligible but do not enroll. This penalty will be assessed when you enroll in the future and you will need to pay it, in addition to your premium, each month you have Medicare Part D.

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You Need Part B If Medicare Is Primary

What is Medicare Part B? It is your outpatient coverage.

Once you retire and have no access to other health coverage, Medicare becomes your primary insurance. Part A pays for your room and board in the hospital. Part B covers most of the rest.

The Medicare definition for Part B is outpatient coverage. However, Part B covers many things that happen both in and out of the hospital. Part B provides 80% coverage for doctor visits, lab work, physical therapy, medical equipment, diabetes supplies, surgeries, chemotherapy, radiation, dialysis, and much more.

Is Medicare Part B optional? Yes, because some people who are still working may wish to delay it until they retire.

However, it is a critical component of your overall health package when Medicare is primary.

Some common scenarios where Medicare is primary are:

• When you are 65 or older and have employer coverage at a company with less than 20 employees
• When you are under 65 on Medicare due to disability and work for an employer with less than 100 employees
• If you have retiree coverage from a former employer
• With COBRA insurance, you must enroll in Part B by the 8th month of COBRA
• When you are turning 65 with Tricare for Life or CHAMPVA
• When you are 65 or older and enrolled in Medicaid

Medicare Part D Donut Hole Coverage Gap Costs

Medicare Part D prescription drug plans and some Medicare Advantage plans have what is known as a donut hole or coverage gap, which is a temporary limit on how much a Prescription Drug Plan will pay for prescription drug costs.

After you and your plan combine to spend at least $4,660 on covered drugs in 2023, you enter the Part D coverage gap.

In 2023, Part D beneficiaries pay 25 percent of the cost of brand name and generic drugs during the coverage gap until reaching catastrophic coverage spending limit, which is $7,400, on covered drugs.

Once you enter the catastrophic coverage phase, you pay only a limited copay for covered drugs for the rest of the year.

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Are You Eligible For Medicare Part B

Eligibility for Part B includes being 65 or older, collecting disability benefits, and/or having end-stage renal disease . If you are eligible for premium-free Medicare Part A, you are eligible for Part B.

If you need to pay a premium for Part A, you are eligible for Part B if you are 65 or older, are a U.S. resident, and are either a U.S. citizen or alien who has been lawfully admitted and has been residing in the United States for at least 5 continuous years before applying.

What Are The Coinsurance And Copayments For Medicare Part B

With Medicare Part B, you usually have to pay a 20% coinsurance â meaning a percentage of the cost. For example, if a service costs $100, you would pay $20, while Medicare would pay $80.

Hereâs the catch, though: Medicare will only pay a certain price for a doctorâs visit or health service. If your provider accepts that amount â i.e., the âMedicare-approved amountâ â then the fee will be covered. If your doctor doesnât accept Medicare, in some instances you may have to pay the full price for the service.

Also important to know: Original Medicare has no yearly limit on how much you have to pay for out-of-pocket services. You could be on the hook for thousands if you have a long hospital stay or recovery and donât have supplemental insurance to help offset the costs.

Medicare Advantage plans, however, do have an out-of-pocket maximum. Once you spend that amount, the rest of your care for the plan year is covered at 100%.

Ready to get started? Find a plan that fits your budget and covers your doctor and prescription medications now.

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When Can I Enroll In Medicare Part B

Some people will be enrolled automatically, but others will have to sign up on their own. You will be enrolled automatically in Part A and Part B if:

• Youâre already receiving benefits from Social Security or the Railroad Retirement Board
• You have a disability and receive Social Security disability benefits.
• You have Lou Gehrigâs disease

If youâre not automatically enrolled, youâll need to sign up during one of these three enrollment periods:

• Initial Enrollment Period, the seven-month period that begins three months before you turn 65 and ends three months after you turn 65.
• Special Enrollment Period, which occurs when your coverage from an employer ends.
• General Enrollment Period, which takes place from January 1 to March 31 of each year.

What Does Medicare Part C Cover

Part C is also known as Medicare Advantage. Private health insurance companies offer these plans. When you join a Medicare Advantage plan, you still have Medicare. The difference is the plan covers and pays for your services instead of Original Medicare. These plans must provide the same coverage as Original Medicare . They can also offer extra benefits.

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How Does Medicare Advantage Coverage Compare To My Employer

Medicare Advantage plans are often relatively inexpensive some have no premium at all other than the cost of Medicare Part B. And Medicare Advantage plans come with built-in caps on out-of-pocket exposure, limited to $7,550 for in-network care in 2021 although that does not include the cost of prescription drugs.

Medicare Advantage plans can also include dental and vision coverage, which isnt covered under Original Medicare. But Medicare Advantage plans have the same sort of provider network restrictions as other commercial health plans.

When you switch to Medicare, Part A is usually free. Part B costs $148.50 per month for most enrollees in 2021 Original Medicare is comprised of Part A and Part B together, although if you continue to work after age 65, you may want to consider delaying your enrollment in Part B and using your employer-sponsored coverage instead.

If you want to add supplemental coverage, the average Part D Prescription Drug Plan costs about $41 per month in 2021. And the average Medigap premium for Plan F in 2018 was $143 per month .

The average Medicare Advantage premium in 2021 is about $21 per month , in addition to the cost of Part B. Most Medicare Advantage plans include deductibles, and their out-of-pocket maximum can be as high as $7,550 in 2021.

Other Medically Necessary Services

Additionally, Medicare Part B helps to cover other services or supplies that are necessary to treat or diagnose a medical condition, including services from doctors or health care providers, outpatient care, home health care, and durable medical equipment.

Here are some examples:

• A portion of outpatient chemotherapy
• Implanted defibrillator
• Certain types of medically necessary home health services
• Kidney dialysis and supplies
• Physical therapy
• Second surgical opinions
• Tests such as MRIs, CT scans, EKG/ECGs, and a CPAP trial for up to three months if you’ve been diagnosed with obstructive sleep apnea
• Lab services, such as blood tests, urinalysis, and tests on tissue samples

This isnt an exhaustive list. Additional services may also be covered.

Unlike preventive services, these often come with a deductible and a copay of 20% of the Medicare-approved cost. There’s no yearly limit on how much you may have to pay out-of-pocket for health care services with Part B.

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Does Medicare Part B Only Cover Doctor Services

No Medicare Part B offers a wide range of benefits aside from doctor services. If you have Part B, Medicare can help cover some vaccines, preventive treatments and services, and even equipment you may need. A Medicare-approved physician will need to determine theyre medically necessary. If not, you may end up paying full price.

Here are a few examples of the different services covered by Medicare Part B:

Medical services

• COVID-19 vaccine

Many of the services above may be administered during a hospitalization. In this case, your service may be classified as inpatient. This can affect how Medicare covers and pays for these treatments. For example, chemotherapy that requires you to stay in a hospital or other facility may be covered by Part A. If so, youll have a different deductible and coinsurance rates to know about. To see how your service is covered, ask your doctor.

More Coverage For Kidney Transplant Recipients

Currently, Medicare recipients with End Stage Renal Disease only receive coverage for immunosuppressive drugs for 36 months following a successful kidney transplant. But beginning next year, these drugs are covered beyond 36 months if you have no other healthcare coverage.

You’ll still have to pay your Part B premium and a monthly premium of $97.10 for this coverage. And if you want it to begin right away on Jan. 1, 2023, you must sign up by Dec. 31, 2022. You can do this by contacting the Social Security Administration.

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Can I Delay Enrolling In Medicare Part B

Since you have to pay a premium for Medicare Part B, you can delay your coverage. âSome people opt out of Part B if theyâre still working and have coverage through an employer ,â says Donovan.

If you decide to keep your current health insurance, you can sign up for Part B up to eight months after your coverage or employment ends without incurring a late enrollment penalty. This is called your Special Enrollment Period.

Miss this window and your monthly Part B premium may go up 10% for each 12-month period that you couldâve had Part B but didnât. For example, if you put off signing up for Medicare for two years, youâll pay a 20% premium penalty for as long as you have Part B, says Donovan.

You may also have to pay this extra fee if you miss your initial enrollment period and donât have an employer-sponsored plan at the time.

Who Pays More For Medicare Part B

Each year the government crunches the numbers to determine total costs for providing Medicare Part B coverage. For most enrollees, the government agrees to cover 75% of the cost and charges enrollees the Medicare Part B premium to cover the other 25%.

In 2021, a single taxpayer whose 2019 return reported MAGI of no more than $88,000 and married couples with MAGI up to $176,000 paid the lowest base Medicare Part B monthly premium of $148.50 per person.

If your income is above those levels, the government shifts more of the premium cost to your personal balance sheet. Instead of covering 75% of the premium cost, the government pays anywhere from 65% to as little as 15% of the premium, based on your IRMAA.

The annual Medicare report estimates that about 5 million beneficiaries currently pay a higher premium, and by 2029 more than 10 million enrollees will pay an IRMAA surcharge.

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When Can You Enroll In Medicare Part B

You can sign up for Medicare Part B during the 7-month period that begins 3 months before your 65th birthday and 3 three months after that birthday.

If you have ALS, you may enroll in Medicare as soon as your Social Security disability insurance goes into effect.

If you have ESRD, you can enroll for Medicare starting on the first day of your fourth month of dialysis. If you do home dialysis, you dont have to wait 4 months and can apply immediately.

You may also apply immediately for Medicare if youre hospitalized for a kidney transplant.

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Is Medicare Part A Free

Typically, most people dont pay for Part A if they have paid Medicare taxes for a certain amount of time while working. However, if you dont qualify for premium-free Part A, it can be purchased for a monthly premium. This amount may vary each year and is based on how long you or your spouse worked and paid Medicare taxes.

We Had Hoped To Achieve This Sooner But Cms Explains That The Options To Accomplish This Would Not Be Feasible Cms And Hhs Are Committed To Lowering Health Care Costs So We Look Forward To Seeing This Medicare Premium Adjustment Across The Finish Line To Ensure Seniors Get Their Cost

Initially, the company producing Aduhelm had put a sticker price of $56,000 per patient on the drug, and based on the number of Medicare members the CMM had assumed would take the drug, this drove up Medicare Part B premiums in 2022. However, when the company came under scrutiny by Congress and the FDA after the troubling issues with the way clinical trials were carried out, the price was quickly cut in half, which prompted interest in lowering premium costs for Medicare members.

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When Do I Enroll In Medicare Part B

The standard answer is during the year you turn 65. If this is your first chance to enroll in Medicare Part B, you need to sign up during your Initial Enrollment Period . For most people, your IEP starts three calendar months before the month you turn 65 and closes three calendar months after. However, if you were born on the first of the month, then your IEP starts four calendar months before the month you turn 65 and closes two calendar months after. Not enrolling during your IEP means youll be stuck paying an enrollment penalty on your Part B premium for as long as you have your policy.

What Is Original Medicare

Many people choose to add a Medicare Supplement plan to their Original Medicare coverage. To understand why, lets take a look at Original Medicare. Medicare Part A covers medical services that are often associated with a stay in the hospital. It also covers some types of care that often occur following a hospital stay. This can include things like:

• Inpatient care in a hospital
• Inpatient care in a skilled nursing facility
• Home health care

Medicare Part B covers the type of care that often takes place outside a hospital or on an outpatient basis. This includes things like:

• Medically necessary doctor services
• Preventive care services, like health screenings, flu vaccines and annual wellness visits to your doctor
• Durable medical equipment, like wheelchairs or portable oxygen tanks you may need to buy to support your health

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Who Is Automatically Enrolled

Groups that are automatically enrolled in original Medicare are:

• those who are turning age 65 and already getting retirement benefits from the Social Security Administration or the Railroad Retirement Board
• people under age 65 with a disability who have been receiving disability benefits from the SSA or RRB for 24 months
• individuals with amyotrophic lateral sclerosis who are getting disability benefits

Its important to note that even though youll be automatically enrolled, Part B is voluntary. You can choose to delay Part B if you wish. One situation where this may occur is if youre already covered by another plan through work or a spouse.