If you are about to turn 65 and need information regarding the various portions of Medicare, then you’ve come to the right place. We know how overwhelming all of the information regarding Medicare can be. And we want to help you choose a plan that meets your individual needs. Also referred to as the medical insurance portion of Medicare, Medicare Part B covers different aspects of your healthcare than Medicare Part A. In the following outline, we’ll give you some detailed information on Medicare Part B, so that you can decide if this portion of Medicare is right for you.
Understanding what Medicare Part B offers
First, let’s take a look at what Medicare Part B actually covers. Medicare Part B covers medical treatments and services under two classifications: “medically necessary services” and preventive services. What qualifies something as medically necessary? In general, medically necessary services must be medical treatments that are required to treat a recognized medical condition or illness. Necessary services and items might include the following:
- Diagnostic equipment
- Doctor visits
- Lab tests
- Supplies, such as walkers or wheelchairs
For example, diabetics need regular doctor visits to ensure appropriate blood levels, as well as appropriate diagnostic coverage to ensure accurate readings.
Medicare Part B beneficiaries also gain access to preventive services, like yearly screenings for the flu or certain cancers. In addition, Part B may cover other medical procedures and treatments that fall within the necessary or preventive range. Ambulance services, clinical research, mental health counseling and some prescription drugs for outpatient treatment may all be covered under Medicare Part B.
As of the 2019 plan year, the Centers for Medicare and Medicaid Services has lifted coverage caps on critical services covered under Medicare Part B. These include physical therapy, speech language pathology and occupational therapy.
But original Medicare doesn’t cover everything. You may need to obtain supplemental insurance, such as Medigap, if you need coverage for the following:
- Cosmetic procedures
- Custodial or long-term care
- Dental care and dentures
- Eye examinations needed for prescriptions
- Hearing aids, along with their fitting exams
- Routine care for foot treatments
Medicare is not a one-size-fits-all program, because people have different medical needs as they age. When applying for Medicare, you have options about the portions of the program in which you want to enroll. While some people get enrolled in Medicare Parts A and B automatically if they meet certain criteria, you have the choice to opt out of Medicare Part B. Choosing a policy can be daunting, but conducting your own research ahead of time will help you make a more informed decision about your healthcare.
Eligibility requirements for Medicare Part B
How do you enroll in Medicare when the time comes? Eligibility requirements for Medicare Part B are essentially the same as those for Medicare Part A. In this section, we’ll highlight some important distinctions for Part B for enrollment purposes. For some people, enrollment in Medicare is automatic based on certain criteria. If you meet one of the following conditions below, then you will be enrolled in Medicare Parts A and B and sent a Medicare card automatically.
- You’re younger than 65 and have a disability.
- You already receive retirement benefits from the Railroad Retirement Board (RRB) or Social Security.
- You have amyotrophic lateral sclerosis (ALS), which is also called Lou Gehrig’s disease.
- You live in Puerto Rico and receive benefits from Social Security or the RRB.
If you are enrolled automatically into Medicare Part B, but don’t want the coverage, then you will need to opt out of Part B as soon as you receive your Medicare card. Otherwise, you’ll be liable for the monthly premium that comes with it. Outside of these parameters, you qualify for Medicare Part B if you’re 65 or older or have end-stage renal disease (ESRD). If you live in Puerto Rico, you will need to sign up for Part B coverage, because you’re only enrolled automatically into Medicare Part A.
You can sign up for Medicare Part B three months prior to your 65th birthday by visiting the Social Security Administration (SSA) website. Or, you can call your local Social Security office or take a trip to your local SS office to fill out an in-person application.
Medicare Part B enrollment options and penalties
Medicare Part B is optional, but in some ways, it can feel mandatory, because there are penalties associated with delayed enrollment. As discussed later, you don’t have to enroll in Part B, particularly if you’re still working when you reach age 65.
However, if you don’t qualify for a Special Enrollment Period (SEP), then you may incur penalty charges. These penalty charges are indefinite for as long as you keep Medicare Part B. When should you enroll in Medicare Part B? If you’re not automatically enrolled because of the aforementioned conditions, then here are your enrollment options:
- You have a seven-month initial period to enroll in Medicare Part B. The seven months include the three months prior to your 65th birthday, the month containing your 65th birthday and the three months that follow your birthday month. If you turn 65 on March 8, then you have from December 1 to June 30 to enroll in Medicare Part B.
- If you delay enrollment, then you have to wait until the next general enrollment period begins. For Medicare Part B, you have from January 1 through March 31 to enroll. Coverage doesn’t begin until July.
What happens if you miss your initial enrollment window? If you delay Medicare Part B enrollment, then you’ll have to wait to enroll when the general enrollment period starts. In this example, your birthday is March 8. Because you missed your initial window, you’ll have to wait until January of the following year to enroll and July of the following year to start receiving coverage.
Essentially, you’ve missed almost a year and a half’s worth of coverage. Also, you’ll have to pay a penalty of as much as 10 percent above the standard premium for every 12-month period that you didn’t have coverage when you could have. In this case, you would have to pay 10 percent, because you only missed one full year. The longer you wait, the higher the percentage goes.
The cost of Medicare Part B
Unlike Medicare Part A, Medicare Part B requires a premium from everyone. The standard premium for Medicare Part B in 2020 is $144.60 a month, which applies to most people, including new enrollees. That premium changes each year, usually increasing. In 2021, the Part B premium is $148.50 a month.
You’ll also have an annual deductible of $203 in 2021 (an increase from the $198 deductible in 2020).
There are penalty fees for not signing up during your Initial Enrollment Period (IEP), but we’ll discuss those in a separate section.
While most people pay the standard amounts for premiums and deductibles, some people will pay more, depending on their income. The more you make, the higher your likelihood will be for paying more than the standard amount. The extra fee per month is called the Income Related Monthly Adjustment Amount (IRMAA). How much more can you expect to pay if you fall outside of the standard range? The Medicare website offers a handy chart on the rates for those with higher incomes, which is updated each year. These are the rates for 2020, based on the income reported on your 2018 tax return:
- Individuals who make more than $87,000 per year up to $109,000 per year will pay $202.40 per month for Medicare Part B premiums.
- If you earn more than $109,000 and up to $136,000 per year as an individual, then you’ll pay $289.20 per month for Part B premiums.
- If you earn more than $136,000 and up to $163,000 for the year as a single person, you’ll pay $376.00 per month for Part B premiums.
- Individuals who earn more than $163,000 but less than $500,000 per year will pay $462.70 in Medicare Part B premiums per month.
- If you earn $500,000 per year or more, your Medicare Part B premium will be $491.60 per month.
These amounts reflect individual incomes only. Married couples will pay the same rates, but for different, higher thresholds. For example, a couple that earns over $174,000 per year and files a joint tax return will pay $202.40 per month for Medicare Part B premiums.
The above IRMAA rates are for 2020. Rates have been released for 2021, and you can learn more about those and how they might affect you personally by talking to Medicare (or Social Security) directly.
Note that many preventive services are covered for free under Medicare Part B, as long as your provider accepts assignment. More on the assignment concept can be found in the following section.
If you do have to pay more for Medicare Part B premiums, then you should receive notification by Social Security. Your income may vary year to year. The tax record you submit when enrolling in Medicare dates back two years. For 2020, these rates apply to income that you earned in 2018. Contact the Social Security Administration (SSA) if your income changes to the point where you may be eligible to pay a lower premium.
Medicare Part B financial assistance
Because Medicare Part B requires a monthly payment (known as a premium) for its services, some people may find it difficult to pay for the monthly costs associated with this portion of Medicare. Those with limited incomes, in particular, may wonder if there are cost assistance programs in place to help mitigate the financial burden.
In fact, there are a few ways that you can reduce your monthly premiums, or at least make your healthcare more affordable using different programs. One such way is to enroll in a Medicare Savings Program. Run by individual states in conjunction with Medicare, Medicare Savings Plans help you pay for medical costs associated with deductibles, coinsurance and copayments, in some cases. There are four Medicare Savings Programs available, but only three of them relate to Medicare Part B. They are:
The Qualified Medicare Beneficiary Program (QMB)
- The Qualifying Individual Program (QI)
- The Specified Low-Income Medicare Beneficiary Program (SLMB)
Each program has its own eligibility requirements. For example, members of the QI Program must apply every year for assistance. Acceptance is based on a first-come, first-served basis, with priority given to past recipients. You also won’t qualify for the QI Program if you receive Medicaid benefits. If you think that you qualify for one of these programs or need financial assistance, then you should contact the Medicaid program in your state to find out more information.
You might also reduce your out-of-pocket medical expenses by choosing doctors and providers who accept “assignment.” Providers who participate in Medicare usually sign an agreement to provide services at an acceptable rate, according to Medicare standards. This is called “assignment.” If you choose a provider who accepts assignment, then you’ll be guaranteed to pay a certain amount, without the risk of incurring additional charges. Assignment helps to:
- Lower your out-of-pocket medical expenses
- Prevent providers from charging you to file claims
- Prevent you from overpaying on standard service.
Not every provider accepts assignment. Those who don’t are considered “nonparticipating” providers; this means they have not signed an agreement with Medicare to provide service at a standardized rate or agreed-upon amount. You may incur extra costs by seeing these providers for Medicare-covered services. In addition, you may also face other consequences for seeing nonparticipating providers. The downside to nonparticipation is as follows:
- You may have to submit your insurance claim on your own.
- You may have to pay for the full cost of your treatment at the time of service, rather than paying your copay or meeting a deductible.
- Nonparticipating providers are allowed to charge you more for Medicare-covered services than a participating provider would. However, they do have to meet the “limiting charge” guidelines of 15 percent above cost for Medicare-covered service.
While you may have to face some consequences by choosing a nonparticipating provider, you do still have rights under Medicare. For example, a provider cannot charge you a fee for submitting a claim on your behalf. If they do charge you, then you can call (800) MEDICARE (633-4227) to report the misconduct.
Most doctors and providers who accept Medicare also accept assignment. So, you may not need to worry about the consequences of using nonparticipating providers. However, you should check with your current doctor before signing up for Medicare to ensure that you’re covered, just in case. You can check the status of nonparticipating providers through the Medicare website. However, the easiest way to check is to ask your provider in person. By choosing a provider who accepts assignment, you may be able to reduce your long-term medical costs.
Medicare Part B special circumstances and updates
Some people don’t need Medicare Part B coverage right away, because they have medical insurance through their employers or meet other special conditions. And some people choose not to enroll in Medicare Part B, because they don’t want to pay for medical coverage they feel they don’t need. There are a variety of reasons why you might hesitate to pay for medical insurance. Likewise, you may be concerned about how the new healthcare laws affect Medicare Part B coverage. In this section, we’ll discuss a few reasons to hold off on Medicare Part B, as well as how Obamacare affects Medicare Part B coverage.
For starters, people who are still working when they qualify for Medicare may not need to get Part B coverage right away. If you have insurance through your employer, then you most likely already have medical coverage. However, you should still meet with your plan administrator to find out how your current insurance works with Medicare, because some policies change once you’re eligible for Medicare. Other special situations include the following:
Once you stop working or lose your work-based coverage, you have an eight-month period to enroll in Medicare Part B. If you don’t enroll during this time, you may have to pay the late enrollment penalty every month that you have Part B coverage – sometimes indefinitely. Also, you may face a serious coverage gap if you wait to enroll.
- If you’re an active duty military member, then you can delay Medicare Part B coverage, as long as you remain active duty.
- Before you retire from the military, you’ll need to enroll in Part B during your SEP in order to avoid penalty fees later.
- TRICARE, health insurance for active and retired military people and their families, beneficiaries need both Medicare Part A and Part B to maintain TRICARE coverage.
- For veterans, Medicare Part B offers additional coverage for medical treatments and services that veterans insurance doesn’t cover; it may be helpful to enroll in Part B if you’re a veteran.
- Signed into law in 2010, the Affordable Care Act (ACA) affects health insurance across the United States, including Medicare to some extent. In a lot of ways, your coverage stays the same. You don’t even need to worry about the Marketplace or open enrollment guidelines under the ACA. That’s because Medicare operates much the same as it always has on an individual level. In fact, you may even see some improvements to your Medicare coverage as a result of Obamacare.
- For instance, you now gain access to free wellness checks and select preventive services, such as mammograms and colonoscopies, without the need to pay for coinsurance or deductibles under Medicare Part B. Are you’re interested in learning more about Obamacare and its effect on Medicare? If so, check out one of our more detailed pages on that topic or the Medicare website.
Benefits of Medicare Part B
Medicare Part B covers a variety of routine healthcare visits and treatments. If you can afford the premiums, then you may want to take advantage of this program, as it could help offset the cost of ongoing medical care. Depending on your eligibility, you may not have a choice when it comes to Medicare Part B.
However, financial need could help you pay for a portion or all of your monthly premiums. Don’t hesitate to contact a representative from your local Social Security office to find out more about your unique situation. Just remember to conduct your own research well ahead of time, so that you don’t incur unnecessary late fees in the future.