Medicare Part B is the part of Medicare that provides medical insurance. You can use it to cover various outpatient services. Continue reading to learn more details about Part B, including what it covers, how much it costs, and when to enroll.
Part B covers a wide variety of medically necessary outpatient services. A service is determined medically necessary if it’s needed to effectively diagnose or treat a health condition.
Some examples of services covered by Part B are:
- durable medical equipment like wheelchairs, walkers, and oxygen equipment
- emergency room services
- kidney dialysis
- laboratory testing, such as blood tests and urinalysis
- occupational therapy
- other testing, such as imaging tests and electrocardiograms
- outpatient hospital and mental health care
- physical therapy
Part B also covers some preventative services as well. Examples include:
- bone density measurements
- cancer screenings like those for breast, colorectal, and prostate cancers
- cardiovascular disease screenings
- diabetes screenings
- screenings for hepatitis B, hepatitis C, and HIV
- sexually transmitted infection (STI) screening
- vaccinations for flu, hepatitis B, and pneumococcal disease
Generally speaking, these groups are eligible for Part B:
- those aged 65 and older
- people with disabilities
- individuals with end stage renal disease (ESRD)
An individual must qualify for premium-free Part A in order to also be eligible for Part B when they’re first able to enroll in Medicare. Because people often pay Medicare taxes while they’re working, most people are eligible for premium-free Part A and can also enroll in Part B when they’re first eligible for Medicare.
If you need to buy Part A, you can still enroll in Part B. However, you must meet the following requirements:
- be aged 65 or older
- be a resident of the United States, either a citizen OR a legal permanent resident for at least five continuous years
Now let’s look at each of the costs associated with Part B in 2020.
Your monthly premium is what you pay each month for Part B coverage. For 2020, the standard Part B monthly premium is $144.60.
People with higher yearly incomes may have to pay higher monthly premiums. Your yearly income is determined based off of your tax return from two years ago. So for 2020, this would be your 2018 tax return.
There’s also a late enrollment penalty that can affect your Part B monthly premium. You’ll pay this if you didn’t enroll in Part B when you were first eligible.
When you need to pay the late enrollment penalty, your monthly premium can increase up to 10 percent of the standard premium for each 12-month period that you were eligible for Part B but didn’t enroll. You’ll pay this as long as you’re enrolled in Part B.
A deductible is what you need to pay out-of-pocket before Part B starts to cover services. For 2020, the deductible for Part B is $198.
Coinsurance is the percentage of the cost of a service that you pay out-of-pocket after meeting your deductible. This is typically 20 percent for Part B.
A copay is a set amount that you pay for a service. Copays aren’t typically associated with Part B. However, there are some cases where you may need to pay one. An example is if you use hospital outpatient services.
An out-of-pocket maximum is a limit on how much you’ll have to pay out-of-pocket for covered services during the year. Original Medicare doesn’t have an out-of-pocket maximum.
There are some services that aren’t covered by Part B. If you need these services, you’ll need to pay for them out-of-pocket. Some examples of these include:
- routine physical examinations
- most prescription drugs
- dental care, including dentures
- most vision care, including eyeglasses
- hearing aids
- long-term care
- cosmetic surgery
- alternative health services like acupuncture and massage
If you’d like prescription drug coverage, you can purchase a Medicare Part D plan. Part D plans are offered by private insurance companies and include most prescription drugs.
Additionally, Medicare Part C (Advantage) plans include all services covered under original Medicare as well as some additional services like dental, vision, and even fitness programs. If you know you’ll need these services frequently, consider a Part C plan.
Some people are automatically enrolled in original Medicare while others will need to sign up. Let’s explore this further.
Who is automatically enrolled?
Groups that are automatically enrolled in original Medicare are:
- those who are turning 65 and already getting retirement benefits from the Social Security Administration (SSA) or the Railroad Retirement Board (RRB)
- people under 65 with a disability who have been receiving disability benefits from the SSA or RRB for 24 months
- individuals with amyotrophic lateral sclerosis (ALS) who are getting disability benefits
It’s important to note that even though you’ll be automatically enrolled, Part B is voluntary. You can choose to delay Part B if you wish. One situation where this may occur is if you’re already covered by another plan through work or a spouse.
Who must sign up?
Remember that not everyone who is eligible for original Medicare will be automatically enrolled. Some will need to sign up through the SSA office:
- Those who are turning 65 and are NOT currently getting retirement benefits from the SSA or RRB can sign up beginning three months before they turn 65.
- People with ESRD can sign up at any time, though when your coverage will begin may vary.
Here are important deadlines for enrolling in original Medicare:
Your 65th birthday
Initial enrollment is a 7-month period that centers on your 65th birthday.
During this time, you can enroll in original Medicare if you won’t be automatically enrolled. Initial enrollment includes the month of your birthday as well the 3 months before and after it.
If you enroll in the 3 months prior to your 65th birthday, coverage will begin the month of your 65th birthday. If you enroll during the month of your 65th birthday or in the 3 months after it, the start of your coverage may be delayed.
January 1st through March 31st
This is the general enrollment period. You can enroll in original Medicare if you didn’t do so during your initial enrollment period.
A late enrollment penalty may be applied. Coverage will begin on July 1st.
April 1st to June 30th
You may add a Part D plan during this time if you enrolled in original Medicare during the general enrollment period. Coverage will begin on July 1st.
October 15th to December 7th
This is Medicare’s open enrollment period. You can do a few things here:
- switch from original Medicare to a Part C plan or vice versa
- switch Part C plans
- add, remove, or switch a Part D plan
Your new coverage will begin on January 1st.
Some people may have coverage in an employer-provided group health plan. If this applies to you, you may decide to delay your enrollment in original Medicare.
If you’ve chosen to delay enrollment, you can enroll in original Medicare later without a late enrollment penalty. You can do this:
- at any time while covered by the group health plan
- for eight months after leaving the group health plan or ending employment with the company that provided it
Medicare Part B is the part of Medicare that covers medically necessary outpatient services. It also covers some preventative services. It’s part of original Medicare
People who are 65 or older, have a disability, or ESRD are eligible for Part B. The costs of part B include monthly premiums, a deductible, and coinsurance or copay. Some services aren’t covered by Part B and will need to be paid out-of-pocket.
Many people are automatically enrolled in original Medicare. Some will have to sign up through the SSA. For these individuals, it’s important to pay attention to enrollment deadlines.
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