Medicare Part B
What does Medicare Part B cover?
Subject to the annual deductible and 20% co-payment, Medicare Part B covers the cost of medically necessary doctor visits and other outpatient services
including the following:
- Doctors’ medically-necessary services (Both inpatient and outpatient)
- Outpatient care at hospitals and clinics
- Organ transplants and immunosuppressive drugs
- Lab tests, X-rays, MRIs, CT scans, EKGs
- Some diagnostic screenings
- Physical, occupational, and speech therapy
- Dental work (Only as required due to accident or disease)
- Durable medical equipment
- Ambulance services considered medically necessary
- Some preventive services (Pap smears, mammography, flu shots, certain vaccines, and antigens)
- One pair of eyeglasses following cataract surgery
- Initial welcome visit within six months of first enrolling in Medicare Part B
- Screening tests for detection of diabetes, heart disease, or prostate cancer
- Smoking cessation programs
- Blood – after the first three pints
The following services do not require that the deductible be met or a 20% co-payment:
- A Medicare-required second opinion for surgery
- Home health services (A 20% copayment does apply to the use of certain durable medical equipment.)
- Pneumonia Vaccine or Flu Shots
- Clinical diagnostic lab tests performed on an outpatient basis by doctors who accept assignment or by Medicare-certified facilities
If a provider has agreed to accept Medicare assignment as payment in full, Medicare will remit the payment to them directly. If a patient chooses a provider who does not accept Medicare assignment, the payment will be made to the patient. In this case, the provider may bill the patient for charges in excess of the amount paid by Medicare up to the limiting charge of 15% of the Medicare-approved charge. Due to the Medicare Overcharge Measure, the following states (known as MOM states) do not allow this excess billing:
- New York
- Rhode Island
What is not covered by Medicare Part B
- Long-term care, also called custodial care
- Most prescription drugs
- Private duty nursing
- Any medical services deemed by Medicare to be unnecessary to services performed by a relative for which the patient is not obligated to pay
- Medical care outside the US (except for emergency care)
- Routine dental care
- Routine eye exams for prescribing glasses
- Routine ear exams for hearing aids or exams for fitting them
- Routine foot care
- Cosmetic surgery
Who is eligible for Medicare Part B
While the rules for Medicare Part A coverage are somewhat complex, those for Medicare Part B are not. If you are either a citizen of the U.S. or a lawful permanent resident of the U.S. for five consecutive years and are age 65 or older, you are eligible to enroll in Medicare Part B. If you are automatically enrolled in Part A, you are eligible for Part B; the only difference is that enrollment is not always automatic. Part B coverage is voluntary and requires the payment of a monthly premium.
How to enroll for Medicare Part B
If you are already receiving retirement benefits from the Social Security Administration (SSA) or the Railroad Retirement Board (RRB), in most cases you’ll automatically be enrolled in both Part A and Part B on the first day of the month you turn 65. If your birthday falls on the first day of the month, you will be enrolled on the first day of the month prior to your birthday month.
For example, if your birthday is May 10, your benefits will begin on May 1. If your birthday is May 1, your benefits will begin April 1.
If you are automatically enrolled, you will receive your Medicare card in the mail 3 months before the month you turn 65 or, if you are receiving disability payments, 3 months before your 25th month of disability.
If your enrollment into Medicare Parts A and B isn’t automatic by virtue of already receiving retirement benefits, you can sign up for benefits by:
- Applying online at the Social Security Administration.
- Applying at your local social security office
- Phoning Social Security at 1-800-772-1213 (TTY: 1-800-325-0078) or, if you worked for the Railroad Retirement Board, 1-877-772-5772
- Submittting the paper Application for Enrollment in Part B (CMS-40B) if you are already enrolled in Medicare Part A.
When to enroll in Medicare Part and Medicare Part B
If you are not automatically enrolled in Medicare Parts A and B, you have an Initial Enrollment Period IEP that begins three months prior to the month of your birthday, includes your birthday month, and ends three months after the month of your birthday.
The earlier you sign up the better. If you sign up during the three months prior to your birthday, your coverage will begin on the first day of your birthday month. If you sign up during your birthday month, your coverage will begin the following month. If you sign up the month after you turn 65, your coverage will begin 2 months later. Sign up two or three months after you turn 65 and your coverage will begin 3 months after you enroll.
For example, Fred turns 65 on April 15. If he signs up during January, February, or March his coverage will begin April 1. If he signs up in April, his coverage will begin in May. Should he wait until May to sign up, his coverage will not begin until July. And if he signs up in June or July, his coverage will begin in August or September respectively.
Some people need to sign up for Medicare Part A and Medicare Part B
If you are still employed and have not begun receiving retirement benefits through either Social Security or the Railroad Retirement Board, contact your employer’s benefits administrator to see how your insurance works with Medicare.
Generally, those who continue to work should enroll in Medicare Part A as it is free for most people. Ask your employer, though, if your current coverage will change if you enroll in Medicare, even part A.
The number of employees covered under your employer’s health care coverage determines whether or not you will absolutely have to enroll in Medicare Part B. If more than 20 employees are covered, your employer’s health plan will be your primary insurer so you won’t need to sign up for Medicare Part B unless required by your employer’s group plan. If fewer than 20 employees are covered, however, your primary coverage would be through Medicare so you should enroll in Part B when you first become eligible. If you don’t, your employer’s plan will not cover you for services that Medicare would have paid and you will be responsible for those charges.
And finally, confirm with your employer that the health insurance plan offered qualifies as creditable coverage for your drug coverage. If the coverage offered by your employer isn’t creditable coverage, you may have to pay a penalty if you wait to sign up for Medicare Medicare Part D.
Signing up for Medicare after a delayed retirement
Employees who continue to work after reaching age 65 and who have had their employer’s medical plan as their primary payer will have an eight-month enrollment period following their retirement. They will be able to enroll in Medicare at any time during the eight-month period after their employer-provided health plan has ended.
If a person does not enroll in Medicare during his Initial Enrollment Period or during the eight months following a delayed retirement, he will only be able to enroll in the annual General Enrollment Period which runs from January 1 to March 31. If he waits to enroll during this period, his coverage will not begin until July 1 of that same year and he may be faced with a late-enrollment penalty of 10% for every year he delayed enrollment. This penalty will be added to his Part B premium for the remainder of his life.
For example, Richard chose not to enroll in Medicare Part B in November of 2008 when he retired at the age of 65. In February of 2017, he enrolled during the General Enrollment Period. While he had delayed his enrollment for 100 months, this included only 8 full years, so for the rest of his life, Richard will pay an 80% penalty for as long as he has Medicare Part B.
How Much Does Medicare Part B Cost?
While Medicare Part A is premium-free if you have worked for 10 years or 40 quarters, Medicare Part B comes at a monthly premium. If you receive Social Security or Railroad Retirement Board benefits, this charge will be deducted from your monthly benefit payment. If you are not yet receiving benefits, you will receive a bill which you will need to pay on a quarterly basis.
Most people who are currently receiving benefits will pay $109 per month for Medicare Part B in 2017. Those new to Social Security or Railroad Retirement Board benefits in 2017 will pay $134. This is because seniors who are already receiving benefits are protected by the Hold Harmless Rule which requires that the Part B premium not go up more than the annual Social Security cost-of-living adjustment. Because 25% of Medicare Part B is funded by beneficiary premiums, those seniors not covered by the Hold Harmless Rule are left to make up the shortfall created by the small COLA for 2017, thus the higher rate of $134.
You will be required to pay the higher rate if you meet any of the following conditions:
- You enroll in Medicare Part B in 2017 for the first time
- You do not receive Social Security Benefits and are directly billed for your Medicare Part B premium
- Medicaid pays your premiums
- Your Modified Adjusted Gross Income (MAGI) is above a determined amount. (For this calculation, Medicare uses your income as reported to the IRS from two years ago) If this is the case, you’ll pay not only the standard premium but also an Income Related Monthly Adjustment Amount. (IRMAA)
2017 Medicare Part B Deductible and Coinsurance
The 2017 Part B deductible is $183.00; this deductible generally changes every year. Since 2006, the deductible has increased by the same percentage as the Part B premium increases. Unlike the Part A deductible, which applies to each benefit period, the Part B deductible is an annual deductible and needs to be met only once each year.
After the annual deductible is met, the coinsurance is usually 20% of the Medicare-approved amount for most doctor services.
After the provider (or patient) has submitted a claim to Medicare, an Explanation of Medicare Benefits (EOMB) will be sent to the patient explaining how the claim was paid. The EOMB will detail the billed charge, the Medicare allowable charge, and the application of any portion of the patient’s deductible.
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