Medicare Part B is Medical Insurance or doctor insurance. Part A covers us for services when we are in a facility and stay overnight. It is easiest to think that Part B will cover when you receive services and you come home the same day. Its coverage for outpatient services. A list of examples but certainly not limited to this list is it covers doctor exams, preventative services like cancer screenings, laboratory tests, x-rays, MRI’s, Cat Scans, Physical Therapy, Occupational Therapy, Durable Medicare Equipment like wheelchairs and oxygen and also ambulance services. Like Part A, Part B has deductibles and coinsurance the Medicare Beneficiary is responsible for.
The coverage of Part B is pretty easy. Before we get into what it covers I first want to explain the premium, how to pay your premium, how to enroll, if you need to enroll, the penalty if you enroll late, what the penalty is and how to avoid the penalty if you have group coverage. This portion of Medicare Part B is the most confusing.
Part B Premium
If we remember Medicare Part A is hospital insurance or inpatient care and Medicare Part B is medical insurance. Unlike Part A of Medicare for most people, Part B is going to have a premium of $135.50 for most people. $135.50 is called the standard premium. If the beneficiary makes less than $85,000 as an individual or less than $170,000 as a couple they will pay the standard premium of $135 per month If they make more than 85,000 for the individual and 170,000 as a couple the premium goes up from there and we will provide a chart of this. It is important to know Medicare considers your income from 2 years ago when determining your Part B Premium.
Enroll in Part B
There are several different ways to enroll in Part B. First, enrollment will happen automatically for some people. This will happen because the beneficiary qualified for Medicare and is currently receiving a social security benefit. Because the beneficiary is already receiving a social security benefit, Medicare will automatically enroll them into Part A and B of Medicare and start deducting their Part B premium directly from their social security benefit.
Generally, they can expect to see their Medicare card 3 months before they turn 65. All Medicare Parts begin on the 1st of the month. For example, if you turn 65 on September 15th, your Medicare will become effective September 1st. If your birthday happens to be on the 1st of the month then your Medicare can be effective on the 1st of the month before you turn 65. For example, if you turn 65 September 1st, your Medicare will become effective August 1. If your enrollment in Part B is automatic and you do not wish to be enrolled, then you need to contact social security to decline Part B.
Part B is Optional | Employer Coverage
Enrolling into Part B is totally optional. However, if you want to enroll in Part B later there will be a penalty. If you have creditable coverage you can avoid the penalty. Creditable coverage simply means coverage that is at least as good as Medicare. This usually comes in the form of employer group coverage. If you have group employer coverage and it is still offered when you become Medicare eligible you absolutely can keep it. You will need to check with your benefits administrator at your work to see if you need to enroll into Part B.
If you belong to a group of fewer than 20 employees Medicare will be primary and if the group is over 20 employees then the group insurance will be primary. Generally speaking, if you are in a group of 20 or more and the group is primary you may not wish to enroll in Part B and if you are in a group of less than 20 you may want to elect Part B. YOU WILL NEED TO CHECK WITH YOUR COMPANIES GROUP ADMINISTRATOR.
Be on the lookout for your Medicare card 3 months before it goes into effect. It is easy to throw away with all of the mail you are getting if you are turning 65. It comes in a plain white envelope from Health and Human Services. In the upper left of the envelope, it has what I describe as a line logo of an eagle.
How to Pay Your Premium
Also, if you are not drawing a social security benefit there are several ways to pay your premium. You can have the premium deducted automatically from your checking account. If you do not want to have your premium automatically deducted, you can elect to have a bill sent to you every quarter or three months. With this bill, you can mail in a check or you can also mail in your credit/debit card info to pay the Part B premium.
Part B Late Enrollment Penalty
Now let’s talk about the late enrollment penalty. This penalty applies if you enroll in Medicare Part B after you first become eligible. The penalty is an extra 10% for each full 12 month period you do not have Part B. For example if you don’t have Part B for 27 months from when you become first eligible and then choose to put it in place. The penalty will be 20% extra of the standard Part B premium. Also if you don’t enroll when you are first eligible then you will likely need to wait for what is called the general enrollment period for Medicare. You can enroll between January 1st and March 31st, but Part B will not become effective until July 1st.
What Part B Covers
Part B Deductible
First, we’ll talk about the Part B deductible. The deductible is $185 in 2019. Unlike the Part A deductible (SEE OUR PART A VIDEO) that could be due each time you enter the hospital as an inpatient, the Part B deductible is only due once per calendar year. I get asked a lot to clarify this. Many times people think they have to pay the $185 deductible for each service they receive. The answer is “no”. The deductible is only due once per calendar year.
Most people satisfy this deductible by their first doctor visit or their first and second doctor visit. The deductible of $185 is certainly very manageable by most people. It is a lot less than the traditional deductible for most health plans offered at work or plans you can buy as an individual. Those deductible are usually 1,000, 2,000 5,000 or we’ve seen them upwards of $10,000. Relatively speaking the $185 is very low.
Part B Coinsurance 20%
The big potential cost is the coinsurance for Part B of Medicare. The coinsurance for Part B is 20% and has no maximum for what the beneficiary is responsible for. The 20% is based on the Medicare-approved amount. The beneficiary is responsible for 20% of the approved Medicare amount for the service rendered. If the Medicare-approved amount is $5,000 the beneficiary is responsible for $1,000. Certainly not an overwhelming amount for most.
Part B Coinsurance Has No Maximum
Remember there is no maximum for what the beneficiaries portion could be. Who knows how many Part B claims a person can incur in a lifetime. In an extreme example of $1,000,000 in Part B claims, the beneficiary is responsible for $200,000. This amount of money can be devastating for many seniors that are on fixed incomes. It is the possibility of the unknown why many people are looking into Medicare Supplements also called Medigap to limit their exposure to unpredictable medical costs. A Medicare Supplement can pick up all of Part B costs Medicare doesn’t pay for.
This covers the basics and a little more for Medicare Part B. I tried to present this in an easy to understand way. Like I mentioned in the beginning, I am a licensed independent insurance broker and I help people with their Medicare choices because Medicare doesn’t pay 100% of the bills. The Part B deductible and coinsurance can be paid for by a Medicare Supplement also called a Medigap Policy extremely lowering exposure to high unpredictable costs. Helping Medicare beneficiaries understand Medicare and what the extra costs to them can be is how I make my living. I hope you allow me to help choose your Medicare Supplement. We can provide you with a quote for your Medicare Supplement free of charge. All of my services are absolutely free to use whether you buy a Med Supp through us or not.
If you would like help shopping for your Medicare Supplement we can help with that free of charge as always. We are independent and that means we don’t work for the insurance companies and can provide quotes for all of the companies. You can contact us at 800.910.3382 and again my name is Chris Duncan.