What Is Medicare Part B? Understanding Your Coverage And The Medicare Part B Costs
Medicare Part B is the physician services portion of Medicare coverage that supports medically necessary treatment, services, and supplies in an outpatient or office setting.
Similar to private insurance, Medicare Part B covers medically necessary:
- Outpatient services
- Office visits
- Durable medical equipment
- Part time home health and rehabilitation
- Preventative services and screenings for routine physicals, cardiovascular, diabetes, and cancer
Medicare Part B Premiums
Since 1966, the cost of Medicare Part B premiums has increased an average of 7.7% per year. Premium payments are usually deducted from your Social Security or other federal benefits and can vary based on your financial situation. In the event you opt to be billed every 3 months for your coverage, you may incur a higher monthly premium versus having it automatically deducted from your Social Security or other federal benefits.
The below table is from Medicare.gov data for 2018 costs:
|If you file individual tax return…||If you file joint tax return…||If you file married & separate tax return…||You will pay this monthly (2018):|
|$85,000 or less||$170,000 or less||$85,000 or less||$134|
|above $85,000 up to $107,000||above $170,000 up to $214,000||Not applicable||$187.50|
|above $107,000 up to $133,500||above $214,000 up to $267,000||Not applicable||$267.90|
|above $133,500 up to $160,000||above $267,000 up to $320,000||Not applicable||$348.30|
|above $160,000||above $320,000||above $85,000||$428.60|
The above amounts my change every year and late enrollment into Medicare Part B may incur a penalty of a 10% increase in premium for every year you were eligible for Medicare Part B, but didn’t enroll.
Deductible and Coinsurance for Medicare Part B
As of 2018, the Medicare Part B deductible is $183 and is a $23 increase from 2016. Once the deductible is met, you are responsible for 20% of the Medicare-approved pricing (contracted rate) for the services you receive.
With Medicare Part B there is not a maximum out of pocket limit in order to get Medicare Part B to cover costs at 100%, unlike standard private insurance companies who offer plans that have a limit on what you will pay. Any and all services with Medicare Part B will be subject to the the 20% coinsurance with no cap for your responsibility.
Medicare Part B Eligibility and Enrollment
Some people may be still covered under employer based health plans during their initial enrollment period. Medicare Part B offers you the ability to delay enrollment which typically comes with a penalty for late enrollment for not signing up when you were first eligible.
If you or your spouse receives private insurance coverage through an employer, it is highly encouraged that you discuss your options with someone human resources that handles the health insurance benefits to see what the best plan is for you. In the event that your employer based coverage is terminated, you may be able to obtain Medicare Part B coverage without penalty through the Special Enrollment Period. It is also important to note that COBRA coverage doesn’t count toward the window for enrollment, as COBRA coverage is technically an individual policy, not a group policy, since the insured pays the entire premium out of pocket.
|General Enrollment||Special Enrollment|
|General Enrollment is from Jan 1- Mar 31 every year, with coverage beginning July 1st of the same year.|
Failure to enroll during your eligibility window may be subject to a late enrollment fee upon sign up.
|In the event you lose private health insurance coverage from an employer or during a volunteer position in a foreign country, you may qualify for a Medicare coverage outside the General Enrollment timeframe under the Special Enrollment Period. This helps prevent you from having a penalty for a late enrollment in the Medicare program.|
If approved, Medicare Part B will begin the first day of the following month after you enroll.
It is important to remember that once you turn 65 and are enrolled in Medicare Part B, you have a six-month window to in which to purchase Medigap coverage. Once the Medigap Open Enrollment opens, you are eligible for a “guaranteed issue” Medigap plan that doesn’t charge a higher premium or require any type of medical underwriting due to pre-existing conditions. It is vital to begin looking at your Medicare Supplemental insurance options during this time to minimize your coverage costs.
|Are you turning 65 AND receiving Social Security/ Railroad Retirement benefits?||Medicare Part B enrollment should be automatic on the first day of the month you turn 65. You will receive your Medicare card about 3 months prior.|
|Are you under 65 and on disability from Social Security/ Railroad Retirement?||After 24 months of disability coverage from Social Security/ Railroad Retirement, Medicare Part B enrollment is automatic starting the 25th month.|
|Have you been diagnosed with end-stage renal disease?||Medicare coverage will begin the first day of the fourth month of dialysis treatment. NOTE: you must manually enroll if under 65.|
|Have you been diagnosed with ALS (Lou Gehrig’s disease)?||Automatic coverage when you start receiving Social Security disability benefits.You should receive card about 30 days after Social Security begins.|
|Are you 65, but not taking retirement benefits?||Requires manual enrollment during the Initial Enrollment Period (starts 3 months before your 65th birthday for 7 months total). If enrollment is missed during this time, penalties will apply or you must wait until General Enrollment begins (Jan 1- Mar 31)|