What is Medicare Part B & What Does It Cover? // [Full Guide]
Posted by Elliot Marks
Health insurance can be a confusing topic, especially when it comes to Medicare. Part A, Part B, Part D, and Medicare Advantage are just some of the terms that you have likely heard when it comes to getting coverage. You have probably seen commercials on TV referencing these terms as well, and it might all seem very overwhelming. So, what does it all mean and what is included in the coverage? If you are confused about Medicare Part B and need an explanation of what it is, how to get it, and what is covered, then keep reading! We will explain all of that and more in this guide to Medicare Part B.
What is Medicare Part B?
To better understand what Part B is, you need an understanding of Medicare in general. Medicare is essentially health insurance coverage that is managed by the Federal government. Medicare was started and signed into law in 1965 as a way to provide health coverage to older Americans. It is managed by the Centers for Medicare & Medicaid Services (CMS).
Since the health insurance market is made up largely of employer-based health plans, retired people were left without many good options for coverage. In addition, people unable to work due to disabilities often had trouble finding health coverage as well. This put these older people and people with disabilities without coverage of any kind and set them up for financial hardships should any health issues arise. This differs from the Medicaid program which is jointly funded by state and Federal governments to offer coverage to low-income families.
You may hear the term "Original Medicare," and this refers to both Medicare Part A and B. While you can enroll in these plans separately, most people are enrolled in both A and B. Medicare Part A serves as hospital insurance or inpatient coverage. This covers things like hospital stays, hospice care, and care in skilled nursing facilities. Part B covers doctor's visits, outpatient services, preventative services, and medical supplies. Things like home health care and physical therapy are typically covered, but the specifics of your situation determine whether that falls under Part A or B. If you are qualified, there is no monthly premium for Part A, but there is a set premium for Part B. We will discuss these costs later in this guide. Neither Part A nor Part B includes prescription drug plans. These plans are often referred to as Medicare Part D.
You may also hear about Medicare Advantage plans. You may hear these called Part C or MA Plans. These plans are maintained by private insurance carriers who contract with the Federal government (Medicare) to administer the plan. These plans typically include Part A, Part B, and optional prescription drug coverage. Think of the Advantage plans as an all-in-one alternative to Original Medicare. You should be aware, however, that these companies can charge different out of pocket expenses, and they have different rules regarding referrals to specialists and other items.
So, as a recap, Medicare B is health insurance administered by the Federal government with covered services that include doctor's visits, preventative care, outpatient services, and medical supplies. Part B does not include hospital stays or prescription drug coverage. In some cases, private insurance companies contract with Medicare to provide your coverage.
Social Security Benefit Eligibility
It's important to make sure that you're eligible for Social Security retirement benefits. The following guide will help you determine whether you qualify.Social Security Eligibility
What Does Medicare Part B Cover?
We've already briefly answered the question, "What does Medicare cover," but let's dive a little deeper into Medicare Part B coverage specifically. You have already learned that it covers doctor's visits, preventative care, outpatient services, and medical supplies. But just what all is included in those categories?
Part B coverage falls into two major categories - medically necessary services and preventive services. Preventive services include items that either prevent illness or detect it at an early stage so that future care can be most effective. This includes things like flu and other types of vaccines as well as regular screening and wellness exams. For example, mammograms or colonoscopies would be considered preventative because those tests help detect cancer at an early stage. Most screening exams have an age requirement where the test then becomes considered preventative.
Medically necessary services are those that are needed to treat a medical condition using generally accepted standards or practices. Remember that Part B only refers to doctor's visits and outpatient services - hospital stays and inpatient care is covered under Part A. Part B includes doctor's visits when you are sick, ambulance services, mental health treatment, dialysis, outpatient care, and durable medical equipment.
There are a wide range of items that may be covered under the equipment category. Oxygen tanks, walkers or wheelchairs, nebulizers, crutches, traction equipment, hospital beds, CPAP devices, patient lifts, commode chairs, and blood sugar monitors are just a few examples. If your doctor says that a certain piece of equipment is medically necessary for you to have at home, then it will likely be covered.
If you have a question about coverage, you can always talk to your doctor or call Medicare to ask. Coverage decisions are based on state and federal laws, national decisions made by Medicare, and local decisions made by companies that process Medicare claims. So, just because something is covered for your friend in Florida does not necessarily mean that exact same item will be covered for you in Nebraska. If you are uncertain, it's always a good idea to talk to your health care provider before purchasing the equipment or having the procedure.
Medicare Part B Eligibility
The Medicare eligibility rules can be a little complicated, but we will try to keep things as simple as possible. First, we'll cover the generic rules, and then we will get into special situations. If you are still unsure whether you qualify, you can always go online to the Medicare eligibility checker or give them a call to check.
A person is eligible for Part B if they qualify for the premium-free Part A coverage. All they need to do is pay the premium to receive Part B coverage. So, now the question becomes what do you have to do to qualify for Part A coverage? You qualify for Part A coverage if you are age 65 or older and you or your spouse has worked and paid Medicare taxes for at least 10 years. This same general rule will qualify you for Part B as well, although Part B does require the payment of premiums.
So, what if you do not meet the standard eligibility requirement? Are there other ways to qualify for coverage? The answer is yes! You may still qualify for Part B if you are age 65 or older and a U.S. citizen even if you do not meet the 10 year working requirement. You would not be eligible to receive premium-free Part A coverage, but you could still pay a premium to receive Part B.
What about younger individuals? You can qualify for automatic Part B Medicare if you are under the age of 65 and receiving Social Security disability payments or disability payments through the Railroad Retirement Board. If you are receiving these disability payments, you will be automatically enrolled in Medicare after 24 months. Your Part B monthly premiums will be automatically deducted from your disability benefits.
Lastly, you are eligible for Part B benefits if you are under the age of 65 and have been diagnosed with End Stage Renal Disease (ESRD) or ALS (Lou Gehrig's Disease). If you qualify for disability payments due to ALS, the 24 month waiting period for Medicare is waived, and you can enroll in Part B immediately upon being approved for disability.
How Much is Medicare Part B?
Unlike Part A, there are monthly premiums required for Part B. In 2021, the standard monthly premium for Part B is $148.50. This is the amount you will pay if you earned less than $88,000 on your tax return, or $176,000 for a married couple filing jointly. The majority of Medicare recipients fall into this category.
If you make above the amounts listed above, then you are required to pay additional premium amounts each month. For example, if you made above $88,000 but below $111,000 ($176,000 - $222,000 married, filing jointly), then your premium will be $207.90 per month. You can find additional information about premium costs on Medicare's website which has a complete table showing the income related monthly adjusted amount (IRMAA).
In addition to the premiums you pay each month, there are also costs associated with health care services. There is no cost for preventive services like vaccines and preventive screening as long as you receive the service from an approved health care provider.
For all other services, you will pay 20% of the Medicare approved amount for the service. This is considered a copayment or coinsurance. Part B plans also include a deductible that must be met before the 80% coverage begins. In 2021, the Part B deductible is $203.
Preventive care is covered by Part B and includes whatever will land you in a hospital for which Part A would have to pay. Some of these include:
- Drug and alcohol screening and counseling
- Diet counseling
- Diabetes counseling
- STD screening and counseling
- Smoking cessation screening and counseling
- Cholesterol and blood pressure screening
- Anxiety and depression counseling
- Aspirin for prevention of heart attack
- Colorectal cancer screening
Preventive care exclusively for women include:
- Anemia, Rh incompatibility and other blood conditions screening
- Anything to do with pregnancy screenings
- Breast and cervical cancer screenings and mammograms
- Osteoporosis screening
- Domestic violence screening and counseling
When Should You Enroll in Medicare Part B?
If you are already receiving Social Security retirement benefits, Medicare enrollment usually happens automatically on your 65th birthday. Since there is a premium associated with Part B, many people choose to receive Part A coverage and delay the start of their Part B. This is especially true for those who are 65 and still working, hence they are still covered by their employer's health insurance plan.
Your initial enrollment period lasts for 7 months. It begins 3 months before you turn 65, and lasts for three months after - it includes the month of your birthday as well. If you miss your initial period, then you may choose to utilize a special enrollment period to sign up for benefits. If you stop working after age 65 and lose your employer health benefits, then you would be eligible to sign up for Medicare coverage within 8 months of losing that coverage without a penalty.
In addition to the special enrollment period, Medicare also has an open enrollment period each year from January to March. You can sign up during this period to start coverage on July 1, but you may be required to pay a late enrollment penalty if you are past your original enrollment period.
You should also know that once you begin Part B coverage, your Medigap enrollment period begins. You have 6 months to sign up for coverage with a guarantee issue and buy Medigap coverage without medical underwriting or a higher premium for pre-existing conditions. If you miss this period, you may end up paying much higher premiums for that coverage or be unable to qualify for Medigap at all. As info - Medigap is supplemental medical insurance that you buy from a private company to help cover costs not paid by Medicare like deductibles, co-payments, or services outside the United States. Enrolling in Medigap is not mandatory, but it can help some people offset their out of pocket expenses.
Thankfully, Medicare makes it quite easy to sign up for coverage. You can check your eligibility and sign up for Medicare online. The process only takes about 10 minutes.
Medicare Part B Premiums for 2021
Most people enrolled in Part B will pay the standard premium for 2021 of $148.50. However, the higher your income, the higher your premium will be. Medicare uses what they call an Income Related Monthly Adjustment Amount, or IRMAA, to determine premiums for high earners.
Here is a table showing the adjusted premium amounts based on income for 2021:
Medicare Part B Deductibles for 2021
A deductible is the amount of money that you must pay before Medicare begins to pay for any of your medical services. For 2021, the deductible amount is $203. So, that means that you must pay for the first $203 worth of services out of your pocket. Once you reach this amount, then any additional services you receive would be covered per the terms of your policy. This generally means that you would then pay 20% of the cost of the service, while Medicare would pay the remaining 80% of the bill.
Medicare can be a confusing topic, but with a little time and research, things can become much clearer. Part B acts like normal medical insurance coverage and applies to doctor's visits, outpatient services, medical devices, and a few other items. It does not cover hospital stays, inpatient service, or a prescription drug plan. Once you are eligible for Part B, make sure you enroll promptly to avoid paying the late fee later down the road.