Health insurance is never a simple matter and understanding how your coverage operates is usually a very confusing issue. This is as true of your Medicare coverage as traditional insurance and can even be a bit more so due to the many “Parts” it involves. As a simple illustration, consider Medicare Part B.
What is Medicare Part B? It would be ideal if it were a simple matter, but it can be somewhat complex. In this article, we are going to look at just what it is, what it covers (and does not cover), and more.
When discussing Medicare, begin with “Original Medicare.” This is actually BOTH Medicare Part A and Part B. You can go beyond the basics, however, and add Part D (drug coverage) and the Medicare Supplement Insurance also known as Medigap. Medigap often confuses things because it too uses alphabetical descriptors, and they run from letters A-N. Upgrading to an expanded plan moves you outside of Original Medicare.
Medicare Supplement Insurance plans are often chosen because the Medicare Part B coverage comes with a premium that must be paid, in addition to copays and coinsurance amounts. Yet, Part B does not pay in full, and there can be gaps in coverage which a Medicare Supplement Insurance plan can address. It is also why Part C options exist, also called Medicare Advantage Plans. They include a wider array of covered services not usually included in Part B, as well as drug coverage (Part D).
This may be confusing to some, and so we’ll return to the matter of “what is Medicare Part B?” specifically.
If you go right to the source – Medicare – you find a lengthy definition that gives a fairly concise answer to the question of “What is Medicare B?” The site says that it “covers 2 types of services
You pay nothing for most preventive services if you get the services from a health care provider who accepts Medicare assignment.
Part B covers things like:
It also covers some limited outpatient drugs.
To make it easier to better understand coverage, it is useful to know just what Medicare B is NOT.
The items that Medicare will not cover (including Medicare B) include:
It also does not include any of your medication or prescription drug costs. This is something that is addressed via Medicare Part D coverage.
And with a list of what it covers and does not cover, many want to know just what the total Medicare Part B cost is. Again, Medicare is very clear about it, and explains: “Some people automatically get Medicare Part B (Medical Insurance), and some people need to sign up for Part B… If you don’t sign up for Part B when you’re first eligible, you may have to pay a late enrollment penalty.”
Most will pay a monthly premium for Part B coverage, and this monthly sum can be automatically taken from a Social Security, Railroad Retirement or Office of Personnel Management benefits check. If unable to have automatic deductions, recipients are invoiced.
The amount required is typically a “standard premium” and “Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago. This is the most recent tax return information provided to Social Security by the IRS.
The standard Part B premium amount in 2019 is $135.50 ($144.60 in 2020). Most people will pay the standard Part B premium amount. If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you’ll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.” Rates run from that $135.50 up to $460.50 ($144.60 to $491.60 in 2020).
Then comes the deductible and coinsurance amounts, which are usually a confusing matter for many.
The Total Costs of Medicare Part B – Are There Deductibles, Copays and Coinsurance?
Most Medicare insurance plans have an out of pocket requirement or cap. That phrase describes the sums you, as the person insured, will pay before some of the benefits begin. With “Original Medicare,” there is no cap and your out of pocket expenses could go unchecked. (Shortly, we are going to take a quick look at ways to offset or control such factors)
If asking “what is the Medicare Part B limit,” you start with that basic fact. And unfortunately, the out of pocket limit could be unlimited! However, there are also copays and coinsurance amounts to consider.
As the Medicare website (Medicare.gov) tells us, the “standard monthly premium for Medicare Part B enrollees will be $135.50 ($144.60 in 2020) or higher depending on your income,” and you’ll pay that on a monthly basis. The deductible for Medicare Part B is $185 ($198 in 2020) and once that amount is met, you typically pay 20% of the Medicare-approved amount for most doctor services, including services while hospitalized. You will also pay 20% of all outpatient therapies (if Medicare-approved), and Durable Medical Equipment (DME).
And what about the copayments and coinsurance? Medicare Part B covers most of your copayments, with the exception of outpatient hospital visits and mental health services. Coinsurance is often used interchangeably with the deductible when speaking about Medicare Part B costs and is a fixed percentage. After meeting the $185 deductible for the year ($198 in 2020), you pay that 20% as outlined above.
And this often makes many wonder if there are any Medicare plan options that pay the deductibles or coinsurances. That is when Medicare Supplement Insurance (Medigap) mentioned earlier are used. It is also when you may want to consider the use of a Medicare Advantage Plan (Part C).
What is Medicare Part B When Included in a Part C Plan?
A Medicare plan that combines the benefits of Medicare Part A and Part B in one plan is described by many as Medicare Part C or a Medical Advantage Plan. These plans usually include Medicare Part D (also known as a Medicare Advantage Prescription Drug plan). It is one of the three ways that experts outline Medicare planning.
For example, when choosing your Medicare benefits, there are usually three clear routes:
While it is necessary to sign up for Medicare Part B as soon as possible, it can be done in the context of a Medicare Advantage Plan. It is a “type of Medicare health plan offered by a private company that contracts with Medicare. Medicare Advantage Plans provide all of your Part A and Part B benefits. Types of Medicare Advantage Plans include:
If you’re enrolled in a Medicare Advantage Plan:
Most Medicare Advantage Plans also have prescription drug coverage.
This makes many wonder what is Medicare Part B in the context of a Medicare Part C configuration? The answer is actually simple. It offers all of the same benefits as Original Medicare and usually extra benefits including prescription drug coverage all bundled into a single plan. The specifications vary by plan. They must adhere to the Medicare guidelines, and the three most specific in terms of qualifications are:
The Part C option, however, is often chosen because it may include certain treatment options and extra benefits that traditional Medicare doesn’t offer, including hearing, vision, and dental. Medicare will typically pay only a fixed amount for medical care to the insurance providers making the Medicare Advantage Plans available. They can charge different out of pocket costs.
And it is always important to keep the enrollment period for your Medicare Part B coverage in mind because hesitating could mean paying a late enrollment penalty for as long as you have Medicare. For example, some defer signing up because they may still have insurance through their job or they may retain coverage through a spouse’s health insurance plan. However, those who don’t have other insurance and fail to enroll at the right time face that higher monthly premium for however long they are in the program. For example, if you do not enroll as soon as you become eligible, you are going to face a 10% increase in the price of your monthly premiums for every 12 months you fail to enroll. This builds over each 12 month period, so holding off on enrollment for two years boosts the premiums by 20%
When can you enroll? That varies based on a specific set of factors.
There are different times that you can enroll yourself in Medicare, and they include the:
You will always have to pay a Medicare Part B monthly premium, and this is true even if you elect to get coverage through a Medicare Advantage Plan. It is the medical part of your federal health insurance, and something you paid for over the years of paying into both Social Security and Medicare via your payroll deductions. It is important to remember that you do not have to enroll in Original Medicare but if you do, you may want to consider adding Medicare Supplement Insurance and/or a Medicare Prescription Drug Plan (Part D). The good news is that you can configure and reconfigure your coverages, but you must adhere to the enrollment periods in order to make the most of your options. It is wise to do a comparison of the plan options available, and even use some “what if” scenarios to determine which option fits your needs. We all need healthcare. The point is to figure out which treatments or services you feel are the most significant or relevant to your situation and use what you have learned here to make the choices that are right for you.
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