Medicare Part B
Medicare Part B will be listed on your Medicare Card as Medical. Part B is designed primarily to cover two types of services which includes Medically Necessary Services and Preventive Services. Most notably this includes care received from doctors and other health care providers as well as many preventive services such as screenings, shots or vaccines, and yearly Wellness visits. As you receive services, you will pay a deductible at the beginning of each year, afterwards you typically pay 20% of the cost of any Medicare approved service which is known as a coinsurance.
What does Medicare Part B cover?
- Provider services: Care received in a doctors office or outpatient setting which are deemed medically necessary will be covered under Part B.
- Durable medical equipment: Equipment that serves a medical purpose, able to withstand repeated use, and appropriate for home use, is covered.
- Home health services: If you are homebound and need skilled nursing or therapy care, you’re covered under Part B.
- Ambulance services: Emergency transportation by ambulance. Limited coverage for non-emergency transportation is available in which there is no safe alternative as long as it is medically necessary.
- Preventative services: Outpatient physical, speech, and occupational therapy services are covered as long as they are administered by a Medicare-certified therapist.
- X-rays and lab tests: All doctor ordered x-rays and lab tests are covered.
- Chiropractic care: Only when medically necessary to fix subluxation of the spine.
- Certain prescription drugs: Certain drugs such as immunosuppressants, select anti-cancer, select antiemetic, select dialysis, and other typical drugs administered by a physician in a doctors office or hospital setting.
How much does Medicare Part B cost?
There is a monthly premium. The monthly premium is decided by the government and determined by your income level. You will pay a monthly premium for Part B. Most people fall in the bracket of paying the standard premium amount. In 2021, the standard Medicare Part B premium amount is $148.50. However, if your modified adjusted gross income is higher than a certain amount, you will pay a Income Related Monthly Adjustment Amount, or “IRMAA”. Medicare will use the modified adjusted gross income from your IRS tax return 2 years ago to determine your IRMAA. In contrast, if you fall into a lower income bracket you may qualify for the Medicare Savings Program (MSP), which may help pay your Part B premium.
The Part B premium will be automatically deducted from your payments if you receive benefits from Social Security, Railroad Retirement Board, or Office of Personnel Management. If you do not receive any of these types of benefit payments then you will receive a quarterly bill.
Do I have to apply for Medicare Part B?
Most people usually sign up for both Part A and Part B at the same time when they are first eligible as soon as they turn 65. However, in some situations it might make sense to wait and sign up for Medicare Part B later. There are risks to delaying your enrollment and signing up later such as a gap in coverage or having to pay a late enrollment penalty.
If you are already receiving Social Security benefits you will automatically be enrolled in Medicare Part B. Your card will arrive in the mail about 3 months before your birth month. It some cases, it may arrive later but at the latest a month before your birthday. If you are approaching your birth month and have not received your Medicare Card then you need to contact Social Security.
If you do not receive Social Security benefits, you will have to enroll yourself. You can do it online, on the phone, or in person at your local Social Security office. Your card will come within three weeks after you apply.
Medicare Part B Deductible
Medicare has an annual deductible that is set by the Centers for Medicare and Medicaid Service or “CMS”. The current Medicare Part B deductible for 2021 is $203. You must meet the deductible every year before Medicare starts to pay their 80% coinsurance. The deductible will reset every January 1st.
Medicare Part B Coinsurance
Medicare Part B will start to cover 80% of all Medicare Approved services after the Part B Deductible has been met. Once you meet the deductible you will be responsible for the remaining 20% coinsurance with no limit or cap. With Medicare not having a stop loss point to your 20% coinsurance it would be in your best interests to consider adding another health plan such as a Medicare Supplement (Medigap) or Part C (Medicare Advantage) plan.
Medicare Part B Excess Charges
Beyond your standardized deductible and 20% coinsurance you may also pay for any excess charges a provider or facility may charge beyond what Medicare reimburses. Doctors or health care providers are legally allowed to charge higher than the Medicare Approved amount. The difference in the amounts are referred to as Excess Charges which you are responsible for.
If this sounds out of your budget, don’t worry. There are Medicare Supplement plans such as Medicare Supplement Plan G that are designed to cover the excess charges.