Learning Center > What Is Medicare Part B: Complete Guide To Coverage, Costs, and Eligibility

What Is Medicare Part B: Complete Guide To Coverage, Costs, and Eligibility

Medicare Part B is the part of Original Medicare that covers outpatient medical care. Medicare Part B covers outpatient services from doctors and other health care providers, home health care, durable medical equipment, and some preventive services.

In other words, you can think of Medicare Part B as Medicare medical insurance that doesn’t require an inpatient hospital stay. (Hospital coverage falls under Medicare Part A.)

Part B is a part of Original Medicare (along with Part A), but you can also choose to receive your Medicare Part B benefits as part of a Medicare Advantage plan.

If you go this route, rest assured that Medicare Advantage plans are required to cover everything that Medicare Part B covers, so you won’t be missing out on any benefits if you choose to use this private health insurance option.

With thousands of Americans turning 65 every day, Medicare plans are in the news, on commercials, and on people’s minds more than ever before. To make the best choices for coverage, it’s important to have a solid understanding of the program, starting with Original Medicare.

In this guide to understanding Medicare Part B, we’ll cover some Medicare frequently asked questions and details about the medical services aspect of Original Medicare, including:

  • What Is Medicare Part B?What Does Medicare Part B Cover?
  • How Much Does Medicare Part B Cost?
  • Medicare Part B Eligibility
  • Medicare Part B Enrollment Period
  • Delaying Medicare Part B Enrollment
  • Medicare Part B Special Enrollment Period
  • How To Enroll In Medicare Part B
  • Who Automatically Gets Medicare Part B?
  • Do I Need To Get Medicare Part B If I Have Medicare Part A?
  • How Medicare Part B Works With Medigap Plans

What Does Medicare Part B Cover?

Medicare Part B offers comprehensive coverage that is broken down into 2 categories:

  • Medically necessary services, which are intended to diagnose or treat a medical condition.
  • Preventive services, which prevent or detect illnesses at an early stage.

You will be covered under Part B when you use these services:

  • Doctor’s visits, including specialists
  • Preventive screenings
  • Physical and occupational therapy
  • Mental health coverage
  • Durable medical devices (DME)
  • Infusion-based cancer treatments, like chemotherapy
  • Limited prescription drugs and certain vaccines
  • Outpatient hospital services, including same-day surgeries

Although most vaccines are covered by Medicare Part D, Medicare Part B will cover the COVID-19 vaccine. Medicare Part B also covers the flu, hepatitis B, and pneumococcal vaccines.

Medicare Part B generally only covers medications that you’d receive at a doctor’s office. Meanwhile, prescription drugs that you fill at a pharmacy are covered under Medicare Prescription Drug Plans (Medicare Part D).

Does Medicare Part B Cover Dental, Vision, and Hearing?

Medicare Part B offers minimal coverage for dental, vision and hearing services.

Part B covers medically-necessary procedures like glaucoma screening, but doesn’t cover routine vision, hearing, or dental services.

However, many Medicare Advantage plans do offer coverage for routine vision, hearing, and dental care.

How Much Does Medicare Part B Cost?

There are 2 different types of costs associated with Medicare Part B:

  • Premiums you pay to have coverage, and
  • Costs you pay out of pocket when you receive covered services and procedures.

What is the Cost of Medicare Part B for 2021?

When you enroll in Medicare Part B, you will have to pay a monthly premium. For 2021, the base premium is $148.50.

You will also have to pay out-of-pocket costs when you use your Medicare Part B benefits. You can expect to pay these costs out of pocket:

  • Medicare Part B deductible: $203 for 2021.
  • Medicare Part B coinsurance: 20% of the Medicare-approved charge for every covered service or procedure.
  • Medicare Part B excess charges: Up to 15% of the Medicare-approved charge for services and procedures administered by providers who don’t accept Medicare-approved prices.

It’s important to note that unlike private health insurance, your costs are not capped under Original Medicare Part B. For this reason, many people choose to add Medigap coverage, or switch from Original Medicare to a Medicare Advantage plan. And you must continue to pay the Part B premium even if you choose to enroll in a Medicare Advantage plan.

If you receive retirement income from Social Security or the Railroad Retirement Board, your Medicare Part B premium will be automatically deducted from your checks. If you do not receive income from those programs, you will be billed directly for your Part B premium.

Cost of Medicare Part B for Higher Earners

Higher earners may also have an additional charge added to their Part B premiums. The extra amount, known as IRMAA (Income Related Monthly Adjustment Amount), kicks in for single taxpayers with incomes over $88,000 in 2021 and joint filers with incomes in 2021 over $176,000.

There are six income levels of IRMAA. As an example, if you are a single filer with an income of $90,000, your total Medicare Part B premium for 2021 would be $207.90. Of this amount, the base premium is $148.50 and the IRMAA amount is $59.40.

Click here to see a full list of all IRMAA amounts for 2021.

How To Get Help With Medicare Part B Premiums

Medicare is designed to be as affordable as possible, but the premiums may be challenging to those on smaller, fixed incomes.

Medicare Savings Programs can help qualifying Medicare beneficiaries with the costs of their premiums. Beneficiaires may also qualify for assistance with Medicare Part B deductibles and coinsurance amounts.

To qualify for one of the Medicare Savings Programs, you must meet certain income and asset limits. Generally speaking, if you qualify for Medicaid, you will qualify for Medicare Savings Programs. Depending on your level of Medicaid benefits, you might not have to pay any part of the Medicare Part B premium.

You must apply for Medicaid and the Medicare Savings Programs through your home state.

Medicare Part B Eligibility

Anyone who qualifies for premium-free Part A is automatically eligible for Medicare Part B. If you must pay a premium for Medicare Part A, then your Medicare Part B eligibility depends on whether you’re a U.S. citizen, or a permanent legal resident for five or more continuous years.

How Do You Qualify for Medicare Part B

If you meet the citizenship or residency requirement, you will become eligible to enter Medicare Part B when one of these applies:

  • You turn 65 years old,
  • You receive Social Security Disability Income for 24 consecutive months, regardless of age, or
  • You’re diagnosed with either End-Stage Renal Disease (ESRD), or ALS (Lou Gehrig’s disease), regardless of age.

Can I Get Medicare Part B If I Have Kidney Failure (ESRD)?

Yes, you can qualify for Medicare Part B based on an ESRD diagnosis. However, your enrollment isn’t automatic, so you’ll need to apply for coverage.

The eligibility requirements for ESRD can be complicated and change based on whether or not you receive a kidney transplant.

However, most people will begin Medicare Part B coverage after receiving dialysis for 4 consecutive months at a dialysis treatment facility, or as early as the first month of starting dialysis at home.

When enrolling in Medicare Part B with ESRD, it’s important to keep in mind that you’ll get more complete coverage if you also enroll in Part A.

Note: Beginning January 1, 2021, Medicare beneficiaries with ESRD will be able to get coverage through Medicare Advantage plans as outlined in our 2021 changes to Medicare article.

Delaying Medicare Part B Enrollment

If you don’t need Medicare Part B coverage when you become eligible, you can delay enrollment. This way, you won’t pay a premium for coverage you don’t need.

You can consider delaying Medicare Part B when:

  • You are still working for an employer with more than 20 employees, and your drug and medical coverage meet certain Medicare requirements, or
  • You’re covered by a spouse’s employer or union plan that meets the same criteria.

It’s very important to enroll in Medicare Part B when you’re first eligible or make certain that your employer coverage meets Medicare’s requirements for coverage. If you enroll late, or if your employer coverage isn’t adequate, you may have to pay the Medicare Part B penalty.

Late enrollment penalties are added to your base Medicare Part B premium (more details below). And you will pay the penalty as long as you’re enrolled in Medicare Part B, which is probably for the rest of your life.

Note: The Medicare Part B late enrollment penalty is 10% for each 12-month period that you went without coverage. This amount can add up over the years, which is why it’s so important to enroll when you’re first eligible.

Medicare Part B Special Enrollment Period If You’re Still Working After Age 65

If you delay taking Medicare Part B because you’re still working or covered by your spouse’s employer or union plan, you’ll receive a Special Enrollment Period when your employer coverage ends.

Typically, you’ll be eligible for an 8-month enrollment window, which begins the earlier of:

  • Your last day of employment, or
  • The last day of your employer coverage.

During this 8-month window, you can enroll in Medicare Part B and a private plan like Medicare Advantage or Medicare Supplement insurance, if you choose to.

Do I Have to Apply for Medicare Part B?

Medicare Part B is a voluntary program, which requires paying a monthly premium. Generally speaking, you don’t need to apply for Part B if you have health insurance through your (or your spouse’s) current employer.

For example, if you or your spouse are still working past age 65 and have an employer or union health plan, you can delay Part B enrollment. We’ll talk more about this later.

If you don’t have health insurance that Medicare considers as creditable coverage, you should enroll in Part B when you’re first eligible to avoid a late enrollment penalty.

How To Enroll In Medicare Part B

Depending on your circumstances, you may be automatically enrolled into Medicare Part B, or you may need to sign up.

If you have to sign up manually, you can do so online on the Social Security Administration’s (SSA) website or in person at your local Social Security office. You can also apply for Social Security Medicare Part B benefits by phone, or fax an application to the SSA.

But if you sign up manually, you must be sure to enroll during a valid Medicare Part B enrollment period. There are 3 enrollment windows for Part B:

  • Medicare Part B Initial Enrollment Period (IEP): A 7-month period that begins 3 months before you turn age 65 (or meet the eligibility requirements) and ends 3 months after you meet the eligibility requirements.
  • Medicare Part B General Enrollment Period (GEP): An enrollment window that runs from January 1 to March 31 of each year. The GEP is for people who have missed their initial enrollment period and don’t qualify for a Special Election Period.
  • Medicare Special Election Periods (SEPs): Only available in special circumstances. The most common SEP is for those who work past age 65 and delay taking Medicare Part B. In this case, you would be eligible for a Medicare Part B Special Enrollment Period when your employer or union health insurance coverage ends.

Who Automatically Gets Medicare Part B?

If you’re turning 65 and aging into Medicare: You will automatically receive Part B coverage only if you’re already receiving benefits from Social Security or the Railroad Retirement Board at least four months before your 65th birthday.

If you qualify for Part B before age 65: You’ll be automatically enrolled if you receive Social Security or Railroad Retirement Board disability benefits for 24 consecutive months. Your Medicare Part B coverage will begin on the first day of the 25th month you receive disability payments.

If you’re automatically enrolled, you can expect to receive your Medicare Part B card up to three months before your 65th birthday or your 25th month of disability benefits.

Note: ALS patients of any age will enter Part B on the first day they receive Social Security Disability Income. But if you live in Puerto Rico, or if you have ESRD, your enrollment is not automatic. You will need to apply for Medicare Part B manually.

Do I Need To Get Medicare Part B If I Have Medicare Part A?

Although most people receive Part A coverage without paying a premium, you will have to pay a monthly premium when you begin Part B, so you’ll want to make sure you really need Part B coverage before you enroll.

As mentioned earlier, most people should enroll in Medicare Part B when they first become eligible. However, if you’re still working and have qualifying health insurance, you may choose to delay taking Part B.

Retired military members who have TRICARE coverage and Medicare Part A must also have Part B to remain eligible for TRICARE.

How Medicare Part B Works With Medigap Plans

Due to the out-of-pocket costs you’re responsible for under Medicare Part A and B, you may choose to purchase private insurance coverage that enhances your Original Medicare benefits.

Medicare Supplement insurance, also known as Medigap, covers some or all of the out-of-pocket expenses that you would normally have to pay.

You get a one-time Medigap Open Enrollment Period which lasts for 6 months and begins as soon as both of these are true:

  • You are at least 65 years old, and
  • You are enrolled in Medicare Part B.

Since your open enrollment window doesn’t start until you actually enroll in Medicare Part B, you’ll still have the right to buy Medicare Supplement insurance even if you delay taking Part B past age 65.

The benefit of enrolling in Medigap during your open enrollment period is that your application can’t be denied and you can’t be charged more because of a health condition.

If you want to get Medigap after your 6-month open enrollment period, you will probably have to go through medical underwriting. If this is the case, your coverage can be declined, or you might be charged a higher premium for pre-existing conditions.

When you have Medigap, Original Medicare is your primary coverage, and your Medigap policy supplements it. You will show both your Original Medicare card and your Medigap card when you receive Medicare-covered services.

Understanding Medicare Part B Conclusion

As you approach Medicare Part B eligibility, consider these 3 tips before your Medicare Part B enrollment:

  • Know if you’re going to work beyond age 65. If you’ll have qualifying coverage from your employer or union, then you’ll want to delay taking Part B to avoid paying premiums.
  • If you’re automatically enrolled in Part B and don’t yet need it, you’ll have to contact Social Security to cancel your Medicare coverage. You will be asked to return your Medicare card.
  • Since you can be subject to late enrollment penalties, don’t delay taking Part B just because of the cost.

If you decide to keep Medicare Part B or apply if you’re not automatically enrolled, consider if you want to supplement your coverage. Most people choose to add one or more of these options to their Original Medicare coverage:

Other people choose to get their Original Medicare (Parts A and B) through Medicare Advantage (Medicare Part C). These plans combine Medicare Parts A and B, and most include prescription drug coverage. If you enroll in Medicare Advantage, you can’t have a Medigap policy at the same time.

To make a sound decision, be sure to consider your budget and healthcare needs while making sure your doctor accepts any potential plan. You’ll also want to ensure that your medications are covered by the plan.

For more help with understanding Medicare Part B or finding private Medicare plan options in your area, call 800-620-4519 to speak to a licensed insurance agent. You can also find Medicare Advantage plans or compare Medicare Part D plans online through our plan comparison tool.

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 a donut with a bite as a visual metaphor for the Medicare Donut Hole

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Medicare enrollment periods

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Medicare Part D offers important prescription drug coverage and is part of both Original Medicare and Medicare Advantage. As a result, it’s important to understand the Medicare Part D phases that occur each year. There are four Medicare Part D stages. Depending on your drug costs, you may not reach all four in a given year. However, it’s still vital to know what to expect in case your prescription drug needs increase over time. Here’s what you need to know. What are the 4 Stages of Medicare Part D? What are the Medicare Part D stages of coverage? As we mentioned, there are four of them. They start with the deductible period, then initial coverage, followed by the donut hole, and then catastrophic coverage. We’ll go in-depth into each stage so that you can fully understand how they work for you. Deductible Period During the deductible period, you pay the full price of your prescription drugs until you meet your Medicare Part D deductible. The deductible may vary from one plan to another, but Medicare does set a maximum limit. Medicare Part D Deductible 2021 In 2021 the deductible limit for Medicare Part D is $445. Some plans have a $0 deductible, meaning that you skip the first of the Medicare Part D payment stages and move straight into initial coverage. Other plans have a deductible that only applies to certain tiers of medications, while other medications are covered right away. For instance, generic medications may be covered immediately while name-brand medications have a deductible. Make sure you review the Medicare Part D deductible when you compare plans each year so you can choose the plan that’s best for your needs. Initial Coverage Once your deductible is met, you move into initial coverage. This is where your Medicare Part D plan covers your medication, and you only pay a copayment or coinsurance each time. Each plan will have a different list of covered medications and different out-of-pocket costs, so be sure to carefully review the details of your plan. The initial coverage period lasts until you hit $4,130 in total drug costs, which includes both the amount you have paid during the year and the amount your plan paid. Depending on your medical needs, you may not hit the limit, but if you do, you enter the coverage gap known as the Medicare donut hole. Medicare Part D Donut Hole Once you hit the Medicare Part D initial coverage limit, you enter a gap in coverage known as the donut hole. In the past, you had to pay a significant amount of your drug costs during this gap. The coverage gap for all drugs essentially closed in 2020, meaning your share of costs in the “donut hole” is limited to 25% of the drug cost (both brand-name and generic). This percentage will replace the copayment or coinsurance you were paying during the initial coverage period. S For a generic drug that costs $100, you would pay $25 for that drug during the donut hole. For brand-name drugs, even though you only pay 25% of the cost, around 95% of the cost will count toward your out-of-pocket total to move you out of the coverage gap. Once you have paid $6,550 in out-of-pocket costs for prescription drugs, you’ll exit the donut hole and enter catastrophic coverage. Medicare Part D Catastrophic Coverage The final stage of Medicare Part D is catastrophic coverage. What is catastrophic coverage in Medicare Part D? It’s a phase designed to help those who have especially high prescription drug costs. During catastrophic coverage, you’ll pay significantly lower copayments or coinsurance for your remaining prescriptions for the year. For Medicare Part D catastrophic coverage in 2021, you’ll pay 5% of the cost of drugs, and the plan pays for the remainder. Does Medicare Part D Have an Out-of-Pocket Maximum? There is no out-of-pocket maximum for Medicare Part D, but once you hit catastrophic coverage, your out-of-pocket costs drop significantly. Generally, you’ll pay a a minimum of $9.20 for brand-name medication and $3.70 for generic drugs, or 5% of retail costs, whichever is higher. Learn More About Medicare Part D Coverage Stages Medicare Part D is important coverage for many Medicare beneficiaries. That’s why it’s vital to understand the various Part D phases and whether you will enter them in a specific year. Comparing plans is easier with a licensed insurance agent by your side. Contact us to learn more or use our plan comparison tool to learn about plans in your area.
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