The Basics of Medicare Part B
As of 2018, nearly 18% of the American population was enrolled in the federal Medicare program. Original Medicare, established in 1965, is provided by the federal government and came in two parts, Medicare Part A and Part B.
Part C was later introduced in 1995 as Medicare Advantage and is offered by private insurance companies under the Medicare guidelines. Medical Advantage provides all the benefits of the original plan and some additional coverage benefits for its members.
According to the sages at MoneyWizard.co, understanding the basics of Medicare is of the utmost importance if you’re looking to sign up for Medicare Part B.
Learn what you need to know about what Medicare (Part B) covers, including outpatient services and those provided by a doctor.
In this article, therefore, we will help you understand the basics of Medicare Part B coverage. Read on to determine if you’re eligible, what is covered, and what it will cost you.
What is Medicare Part B?
Medicare Part A and B make up Original Medicare. They cover inpatient and outpatient services, respectively. When you are checked into a hospital, depending on the severity of your condition, chances are you will need either inpatient or outpatient care. The difference lies in how long you remain in the facility before the doctor deems you fit to return home. Inpatient care is for patients who stay under hospital care for at least one night. On the other hand, outpatients are treated for minor medical conditions that don’t require them to spend a night in the hospital.
Medicare Part B funds up to 80% of the total Medicare-approved amount for outpatient services. The extra 20% accounts for the cost of coinsurance. Medicare Part B only covers medically necessary outpatient services; the cost of durable medical equipment, such as wheelchairs and oxygen concentrators; and home health care. This means that services like massages, cosmetic surgeries, acupuncture, and other outpatient procedures that are not clinically necessary will have to be paid for out-of-pocket.
When Can You Enroll in Medicare Part B?
To sign up for Medicare Part B, you need to be eligible for Medicare. This means that you must be at least three months shy of your 65th birthday or older, except in the case of individuals under the age of 65 with a disability. Not everyone signs up for Medicare when they turn 65; some special groups are automatically enrolled in the program.
The Social Security Administration (SSA) and the Railroad Retirement Board (RRB) sign up individuals who are turning 65 and are already pocketing their retirement. The SSA and RRB also enroll people under the age of 65 with a disability, provided they have been getting their disability benefits for at least 24 months. This also extends to individuals with amyotrophic lateral sclerosis (ALS) receiving disability benefits.
Do you fall under any of the aforementioned groups? If not, you’ll need to sign up for Medicare when you turn 65. Even so, people with end-stage renal disease (ESRD)—a life-threatening medical condition where the kidneys permanently cease functioning, leading to lifetime dialysis or requiring a kidney transplant to preserve life—can enroll for Medicare anytime regardless of their age.
Knowing exactly when to sign up for Medicare is crucial because registrations outside the enrollment periods attract penalties or delay your health insurance coverage. There are five main enrollment periods that you need to mark on your calendar to avoid the frustration of late registration. These periods are as follows:
1. The Initial Enrollment Window
This is a seven-month period that starts three months before your 65th birthday and ends three months after your 65thbirthday month. During this period, one can enroll in the Original Medicare (Part A and B), get a Part D (Medicare Prescription Drug Plan), or enroll in a Part C (Medicare Advantage Plan).
2. Medicare Supplement Open Enrollment Window
Individuals looking to supplement their Medicare Plan with additional coverage to take care of extra medical costs have a six-month window starting from the first day of the month they turn 65. This is only applicable when you have already enrolled for Medicare Part B. You may not be able to supplement your Medicare Plan if you miss this enrollment period.
3. General Enrollment Period
If you missed the initial enrollment period and you don’t qualify for a Special Enrollment Period, you can wait for the General Enrollment Period between January 1 and March 31. The only downside to this opening is that your coverage will delay until July 1, and you may incur a late enrollment penalty that will be rolled into your monthly Medicare Part B premium.
NOTE: January 1 to March 31 doubles as the Medicare Advantage Open Enrollment Period. During this window, individuals enrolled in the Medicare Advantage Plan can make a one-time switch to either Original Medicare or another Medicare Advantage provider. If you elect to revert to Original Medicare, you can also acquire a Medicare Supplement Plan during the same window.
4. Annual Enrollment Period
The Annual Enrollment Period runs from October 15 to December 7. During this window, you can switch from your current plan to another that addresses all your medical needs. If your current plan meets all your needs, then you don’t have to switch. Quite often, your plan will be renewed automatically. However, if you make changes to your plan, your new coverage will take effect on January 1.
5. Special Enrollment Period (SEP)
This is a period outside the previously discussed open enrollment periods where you are given a chance to make changes to your Medicare Plan. Several circumstances can qualify you for the SEP, including moving to a different physical location where your current plan is not available, losing your current coverage, or having your plan’s terms change with Medicare. Rules about when you can make changes and the type of changes you can make are different for each SEP.
What Does Medicare Part B Cover?
Medicare Part B generally covers medically necessary outpatient care and some preventive care, with certain exceptions. These exceptions are medical services that don’t require a patient to be admitted in the hospital, including emergency room care;
kidney dialysis; chemotherapy; ambulance transportation; durable medical equipment, such as oxygen concentrators, wheelchairs, walkers, etc.; laboratory tests; same-day organ transplants; and physical therapy among others.
Part B also covers preventive care, including most disease screenings, such as cancer and cardiovascular screening; bone density measurements; and vaccinations, such as Flu shots, hepatitis B, and Pneumonia. There are certain outpatient services that aren’t covered by Medicare Part B. These services include routine physical examination, dental care, most prescription drugs, cosmetic surgery, long-term medical care, hearing aids, vision care, acupuncture, and massage among others. As such, you’ll be forced to pay for these services out-of-pocket or acquire additional special insurance coverage.
What is the Eligibility for Medicare Part B?
If you are eligible for Medicare Part A, then you automatically qualify for Part B. To qualify for Medicare Part B, you must be a U.S. citizen or a documented permanent resident who has lived in the U.S. for at least five continuous years.
As previously mentioned, the plan is only available to individuals who are at least 65 years old, or those below 65 years living with disability. You can also enroll for Medicare Part B anytime if you have ESRD or ALS.
How Much Is Medicare Part B?
Several factors influence the cost of Medicare Part B. For starters, the Social Security Act provides for an annual adjustment of monthly Medicare premiums, deductibles, and coinsurance rates. Your income also affects how much you will pay for Medicare. The cost is calculated based on your tax returns from the two years before signing up for Medicare. Listed below are the three main costs associated with Medicare Part B that will help you understand the cost of the plan.
1. Medicare Part B Premium 2021
The monthly premium is the amount you are required to pay monthly for your Medicare Part B plan. This amount is subject to annual adjustments by the Social Security Authority based on your tax returns from the previous two years. Besides the influence of the SSA, your monthly premium is also affected by your income. Individuals earning above a certain amount pay more. The standard monthly premium for 2021 is $148.50. However, a late enrollment penalty can increase your monthly premiums.
2. Deductibles
Before Medicare kicks in to cover your medical costs, you are required to pay a predetermined sum out-of-pocket. The standard deductible for 2021 is set at $203.
3. Coinsurance
After meeting your deductibles, you are still required to pay up to 20% of the Medicare-approved amount out-of-pocket. That amount is referred to as coinsurance.
Conclusion and Recommendation
Medicare Part B is an essential component of Original Medicare. It covers the cost of outpatient treatments, procedures, and some preventive care. Considering the coverage dynamics of the plan, it is crucial that you clearly understand if you’re eligible for the plan and the medical services covered to determine whether you will need additional health coverage to avoid incurring exorbitant out-of-pocket fees. Late enrollment penalties can hike up your monthly premiums; therefore, it is important to observe enrollment period deadlines. You should take advantage of Special Enrollment Periods when you are eligible as they’ll help you acquire coverage without having to wait for official enrollment windows. Most importantly, consult the SSA or the experts at MoneyWizard.co when you need clarification on Medicare Part B.
