The Ins And Outs Of Medicare Part B

Medicare Part B is the workhorse of your Medicare coverage. You’re much more likely to use Part B than Part A. In this article, I’ll review all the basics of Part B, like what it covers, and how to get it, as well as a few more advanced topics, like delaying enrollment and some of the lesser-known services covered.

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What Is Medicare Part B Coverage?

If Medicare Part A is for those “just in case” moments, Part B is much more day-to-day and routine. Medicare Part B covers you for outpatient services. These are the types of procedures or treatments that help you stay healthy.

Part B covers you for most things that fall under the general heading of “doctor’s appointments.” You’ll use Medicare Part B when you use medically necessary services like:

Doctor’s appointments
Therapy – physical or occupational therapy
Lab work or other diagnostics like x-ray or MRI
Durable Medicare Equipment (DME)
Ambulance services
Mental health (inpatient, outpatient, or partial hospitalization)
Some cancer treatments

You’ll also use Part B for preventative services or procedures like:

Flu shots
Cancer screenings
Alcohol and tobacco counselling

Although there are a multitude of things Part B covers, there are also some services that are not covered:

• Cosmetic procedures

• Fertility treatments

• Dental care (although Part A covers few procedures in exceptional cases)

• Prescription drugs (very few exceptions apply)

This is not a comprehensive list. If you have any doubts, it’s a great idea to ask your provider if a service or procedure is Medicare-covered. You can also look it up on the Medicare website.

Let’s take a closer look at some of the lesser-known services and procedures covered by Medicare Part B.

Medicare Part B And Mental Health Coverage

Medicare Part B covers you for a variety of mental health services. This can take place in any of three settings:

Outpatient
Inpatient
Partial hospitalization

The key here is that if you receive mental health services as an inpatient, or as a partial hospitalization, you’ll be responsible for paying the Part A deductible, and any other hospital stay co-insurance. These payments cover your Part A costs like your hospital bed.

You’ll also pay for the actual medical services with Part B. In this case, Medicare Part B will pay 80% of the Medicare-approved amount, and you will pay the remaining 20%.

Medicare Part B And Durable Medical Equipment

You’ll also use Part B to help pay for Durable Medical Equipment (DME). DME includes a vast array of devices, including:

Braces needed after surgery
Walkers
Wheelchairs
CPAP breathing machines
Blood sugar Monitors
Bottled oxygen
Many, many others

When these items are determined to be medically necessary by your physician, you’ll pay your standard 20% and Medicare Part B will cover the other 80%.

Medicare Part B And Cancer Treatments

If you should need treatment for cancer, chances are that this will fall under Part B services. In general, Part B will cover infusion-type cancer treatments including chemotherapy. Part B will also cover some chemotherapy drugs. Be careful here, though, because other oral cancer medications are only covered by Part D drug plans.

Part B also covers radiation treatments received in an outpatient setting. Once again, since these procedures are covered by Part B, you’ll pay 20% of the cost, with Medicare covering the rest.

Cancer treatments are expensive, and your 20% share of cost can really add up. For this very reason, most of the people I help want to add either a Medicare Supplement Plan, or choose Medicare Advantage. We’ll review these options later, but for now, understand that with Original Medicare, you could be on the hook for tens of thousands of dollars if you ever need cancer treatment.

Medicare Part B And Preventative Services

Part B also covers certain preventative services. This includes things like a host of cancer screenings and flu shots. Note that not all vaccinations are covered by Part B. The flu vaccine is, but the Shingles vaccine is covered by Medicare Part D drug plans. If you don’t have drug coverage, you’ll pay the full cost for this vaccine.

Many of the cancer screenings are available for no out of pocket cost. Others do require you to pay the Part B co-insurance.

How Much Do You Pay For Medicare Part B Services?

We’ve already mentioned that you’ll pay 20% of the cost for Part B services. This is the most common expense. However, you will also be subject to:

Part B deductible ($203 for 2021)
Part B excess-charges (up to 15% of the Medicare-approved cost of Part B services or procedures)

You’ll have to pay the deductible before Medicare will cover any of your Part B expenses. This means that for 2021, you pay the first $203 for services. After this, Medicare will pay 80% for the rest of the year.

You may also have to pay excess charges. These amounts are changed by providers who see Medicare patients, but don’t accept Medicare’s pricing. These providers may charge an additional 15% of the Medicare-standard pricing.

In this case, you’d pay the Part B co-insurance of 20% plus the excess charge of 15%. You can avoid excess charges by seeing providers who accept Medicare’s pricing (most do).

The biggest thing to remember is that there is no cap on your out of pocket spending with Part B (or Part A). This means that your out of pocket costs are theoretically unlimited. As we mentioned before, the Part B cost of cancer treatments is immense. If you stick with Original Medicare, you’ll pay 20% of the total cost.

When Are You Eligible For Medicare Part B?

I advise people to think about accessing their Medicare coverage in two steps:

Being eligible for the program
Entering and using benefits

The basic eligibility requirement is that you must be a United States citizen or permanent legal resident. If you’re a permanent legal resident, you must have resided in the U.S. for five consecutive years. If you meet one of these requirements, you know you’ll be eligible to enter Medicare Part B at some point in your life.

You actually enter Part B when you satisfy certain life events. These events include:

Turning 65 years old
Receiving certain disability payments for 24 consecutive months (more below)
Diagnosis of A.L.S. (Lou Gehrig’s disease)
Diagnosis of End Stage Renal Disease (ESRD)

Most people enter Medicare Part B by turning 65. This is known as ageing into Medicare.

You can enter Medicare earlier if you receive disability payments for 24 consecutive months from:

Social Security, or
Railroad Retirement Board

You can also enter Medicare earlier than age 65 if you receive a diagnosis of ALS or ESRD.

With disability, you’ll automatically enter Medicare Part A and B on the first day of the 25th month that you receive disability payments.

When it comes to ESRD and ALS, there are short waiting periods before you actually enter Medicare. With ALS, you enter Medicare Part A and B on the first day of fifth month after you’ve applied for Social Security Disability.

For ESRD, you generally enter Medicare after you’ve received dialysis treatments for four months.

Aging Into Medicare

When you enter Medicare at age 65, you have what’s called your Initial Election Period (ICEP). Your IEP lasts a total of seven months:

Three months before your 65th birth month
The month you turn 65
Three months after your 65th birth month

You can enroll in Original Medicare Parts A and B at any time during this window. When you coverage begins will depend on when you actually enrolled. If you sign up during the three months before your 65th birthday, you coverage will begin on the first day of the month you turn 65.

If you enroll after you turn 65, your coverage will begin on the first day of the month after you sign up. For example, if you turn 65 in June and you enroll in April, your coverage will start June 1st. If you enroll in July, your coverage starts August 1st.

Do You Have To Enroll In Medicare Part B At 65?

You are not required to sign up for Part B the moment you turn 65, especially if you have coverage through an employer or spouse’s employer. However, if you don’t have employer coverage, you could end up paying a penalty if you don’t sign up for Medicare Part B during your IEP.

What Is The Medicare Part B Premium?

Unlike Part A, you are required to pay a monthly premium for Part B. Each year, a standard monthly premium is set. For 2021, the premium is $148.50.

This is known as the base premium. High wage earners may have to pay a higher premium. Medicare Part B premiums are adjusted based on a metric called IRMAA (Income Related Monthly Adjustment Amount). Part B premiums begin to rise at these income levels:

Above $88,000 for single filers
Above $176,000 for married filing jointly
Above $88,000 for married filing separately

What’s important to note about these income limits is that they’re calculated using your taxes from two years before you enter Medicare. If you receive large severance or retirement bonuses, you can be pushed into a higher Part B premium. Try to keep your Part B premium in mind as you plan your retirement income.

Medicare Part B And Private Insurance

Original Medicare is a valuable program, and it can save you money on health care. However, we’ve seen that it doesn’t cover all of your costs. In fact, you can still face ruinous medical bills with Original Medicare. For this reason, people often choose to use private health insurance coverage to protect themselves.

The three main options for private Medicare coverage are:

Medicare Supplement Insurance (Medigap)
Medicare Advantage Plans (Part C)
Standalone Prescription Drug Plans (Part D)

Most people who choose Medigap also enroll in a Part D plan to get help with prescription drug costs. Many Medicare Advantage Plans also cover prescription drugs.

When looking into private Medicare health plans, it’s important to make sure the plan you want is available in your area. You also want to be sure that your doctors and current medications will be covered by the plan.

If you want help reviewing your options, schedule a free no-obligation consultation today. Together, we’ll review your needs and the plans available in your area. Once you’ve found a plan, we can enroll you online, over the phone, or by email. If you want to get started faster, give me a call or text today.

Please share your thoughts! If you have a question about Medicare Part B, or a suggestion for a future article, please let me know by leaving a comment below.