How does Medicare work?
What is Medicare Part B?
- Sean Senseman
- October 3, 2018
How does Medicare work?
Your Medicare information guide
These are the two most common questions everybody has when it comes to their Part B benefits. A few others that always get asked and will be covered below are:
"How can I enroll in Medicare Part B?"
"How much will I have to pay for Medicare Part B?"
"What is the Medicare Part B deductible?"
If you haven’t already, refer to my Medicare 101 guide, for a quick easy to read description of all of the different parts of Medicare.
Below is a guide that is not all inclusive. Should you have a question about whether or not something is covered, contact your health care provider to be certain.
Your Medicare Part B coverage can be thought of as medical coverage.
It will cover reasonable outpatient expenses such as:
- Services and supplies needed to diagnose and/or treat your medical condition
- Emergency transportation services (Ambulance, air lift, etc…)
- Clinical research studies
- Preventative measures such as the flu shot, or screening for HIV, Cancer, substance abuse, cardiovascular disease, and much more
- Medically necessary durable medical equipment (DME)
- Mental health care services not covered under Part A hospitalization (think partial hospitalization, or outpatient services like a counselor, psychologist, psychiatrist, etc…)
- Surgery
- Dialysis treatments
- Chemotherapy
The list goes on! If it’s an outpatient service that your Doctor recommends as medically necessary, it’s usually covered.
Again, this is not all inclusive and whether something will be covered or is often times determined by whether or not the service was deemed medically necessary. If you are in question about whether or not something is covered it is best to contact your health care provider.
You may also check whether or not something is covered by using the Medicare Coverage Search feature
Unlike Part A, you’re going to have to pay for part B. Good news is that it’s still likely much less than you’re used to paying for an employer sponsored health plan. Most people will pay a standardized premium for Part B, but in the event that your gross income exceeds a certain amount you will be required to pay more. The government calls this an Income Related Monthly Adjustment Amount (IRMAA). Medicare will use the adjusted gross income (AGI) reported on your IRS tax return from 2 years ago.
As of 2018 the premium for Part B is $134.
If you’re dual eligible (Medicare and Medicaid) Medicaid will often times cover the monthly premium.
Here is a helpful table that highlights part B premium by income:
And an in-depth guide about Medicare Premiums: Rules For Higher-Income Beneficiaries.
Some people will pay less, but not by much. The good news is, you don’t have to spend a lot of time researching, or studying to figure out how much you have to pay. The Social Security Administration will have that information for you.
During the initial enrollment period (IEP) you will have an opportunity to enroll in Medicare Part B.
In some situations you’ll automatically be enrolled in Original Medicare Part B:
- If you’re getting benefits from Social Security or the Rail Road Board at least 4 months prior to turning 65 you’ll automatically be enrolled in Medicare the first day of the month that you turn 65, unless you were born on the 1st of the month in which case you’ll receive it on the first day of the month prior to your 65th birthday.
- If you have ALS (amyotrophic Lateral Sclerosis) also called Lou Gerhig’s disease you will be automatically enrolled the month your disability benefits begin.
- If you’re receiving Social Security Disability or certain disability benefits from the Rail Road Board (RRB) you’ll automatically be enrolled as of the 25th month that you’ve been receiving those benefits
For everyone else:
Apply online at the Social Security Administration’s website
Visit the nearest Social Security Office
Dial 1-800-772-1213 to enroll by phone
Apply by mail
If you miss your opportunity to enroll during your Initial Enrollment Period (IEP) you’ll have to wait until the Medicare General Enrollment Period (GEP) which happens from January 1st– March 31st of each year, unless you are eligible for a Special Enrollment Period (SEP). If you enroll during the General Enrollment Period (GEP) coverage will not begin until July 1st of the same year, so it’s best not to delay.
For more detailed information on how to enroll, when you can or should enroll, and the other nuances of enrolling in Original Medicare check out the article I wrote: “The Ultimate Guide to Medicare Enrollment” I cover topics such as avoiding late enrollment fees, the Annual Election Period (AEP), qualifying for a Special Enrollment Period (SEP), and so much more. It’s an extremely detailed article on everything enrollment related.
Once your Initial Enrollment Period (IEP) ends you may be subject to a late enrollment penalty unless you qualify for a Special Enrollment Period (SEP). Unlike Part A, you will pay this penalty for as long as you have Part B. For every 12 month period that you don’t have Part B coverage you may be subject to an increase of 10%. So if you go 3 years, or 36 months without Part B coverage after your Initial Enrollment Period, your cost could go up by 30% .
Here’s an example:
Your cost for Medicare Part B is $134 and you went 3 years without coverage after your Initial Enrollment Period (IEP) ended.
To calculate your late penalty:
(Years without coverage x 10%)
3 x .10 (10%) = 30%
To calculate your late fee:
(Medicare Part B premium x late penalty)
$134 x .30 (30%) = $40.20
To calculate your total premium:
(Medicare Part B premium + late fee)
$134+ $40.20 = $174.20
Your total cost for your Medicare Part B coverage is $174
- $183 annual deductible
- 20% coinsurance for the Medicare approved amount for:
- Most outpatient and Doctors’ services
- Durable Medical Equipment (DME)
- Long-term Care
- Most Dental expenses
- Most routine Eye, Vision, and Hearing exams
- Routine foot care
- Acupuncture
- Cosmetic Surgeries/procedures
- Prescription drugs picked up at your local pharmacy
- Services not deemed medically necessary by your doctor or health care provider
As you may have read earlier I can make no guarantee as to what will or will not be covered. To be sure, check with your health care provider. You may also check whether or not something is covered by using the Medicare Coverage Search feature.
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