What Is Medicare Part B?

Last week, we started unraveling the jumble of alphabet letters that make up Medicare. We talked about Medicare Part A, what it covers, and what it costs. Now that we understand what the first half of Original Medicare is for, it’s time to uncover the other half: Medicare Part B.

What Does Medicare Part B Cover?

Medicare Part B, often referred to as medical insurance or outpatient insurance, covers a wide array of essential healthcare services and supplies. Understanding what Part B covers will help you make informed decisions about your healthcare needs.

Medical Services: Medicare Part B covers a range of medically necessary services provided by doctors and other healthcare professionals. This includes but is not limited to doctor visits, outpatient care, preventive services such as screenings for cancer and cardiovascular diseases, lab tests, and x-rays.

Ambulance Services: Part B also covers ambulance services in cases where transportation is necessary to obtain medically necessary services. This could include transportation to a hospital or skilled nursing facility in emergencies.

Durable Medical Equipment (DME): Part B covers durable medical equipment, which refers to devices and equipment prescribed by a doctor for medical reasons. This may include items such as wheelchairs, walkers, oxygen equipment, and certain prosthetic devices.

Mental Health Services: Part B provides coverage for mental health services, including outpatient therapy and visits to psychiatrists or other mental health professionals.

How Much Does Part B Cost?

Understanding the cost associated with Medicare Part B is crucial for beneficiaries to budget effectively and plan for their healthcare expenses. Part B expenses typically consist of premiums, deductibles, copayments, and coinsurance. Let's break down these costs for 2024.

Beneficiaries enrolled in Medicare Part B are required to pay a monthly premium. The standard premium amount for 2024 is $174.70 per month. However, the actual premium may vary based on factors such as income. Individuals with higher incomes may be subject to income-related monthly adjustment amounts (IRMAA), which can increase their premiums. (More on IRMAA in just a bit.)

Medicare Part B also has an annual deductible, which is the amount you must pay out of pocket before Part B coverage kicks in. For 2024, the Part B deductible is $240. Once the deductible is met, you’ll typically pay 20% of the Medicare-approved amount for covered services.

After meeting the deductible, you are responsible for paying a portion of the cost for covered services. This includes copayments and coinsurance. Copayments are fixed amounts that you pay for certain services, such as doctor visits or outpatient therapy sessions. Coinsurance, on the other hand, is a percentage of the Medicare-approved amount for a service that you are responsible for paying. In most cases, Part B covers 80% of the Medicare-approved amount, leaving you with the remaining 20%.

As mentioned earlier, beneficiaries with higher incomes may be subject to IRMAA, which is an additional amount added to your monthly premium. IRMAA is determined based on your modified adjusted gross income from two years prior. The Social Security Administration notifies individuals if they are subject to IRMAA and provides information about the additional amount they must pay. In 2024, that amount could range anywhere from an additional $69.90 to $419.30. Yikes!

Beneficiaries should consider these costs when evaluating their healthcare needs and budgeting for medical expenses. Additionally, those who may have difficulty affording Medicare premiums and out-of-pocket costs may be eligible for assistance programs such as Medicare Savings Programs or Extra Help.

When to Enroll in Medicare Part B

Enrolling in Medicare Part B at the right time is important so that you have uninterrupted coverage and avoid late-enrollment penalties. Here's what you need to know about when to enroll in Part B.

Most people become eligible for Medicare Part B when they turn 65 years old, and their Initial Enrollment Period (IEP) begins three months before their 65th birthday month and ends three months after. It's highly recommended to enroll during this seven-month period to avoid any gaps in coverage. If you're already receiving Social Security or Railroad Retirement Board benefits, you'll be automatically enrolled in Medicare Parts A and B.

If you miss your Initial Enrollment Period (IEP) for Part B because you're covered under a group health plan based on current employment (or your spouse's current employment), you can sign up for Part B during a Special Enrollment Period (SEP). This SEP lasts for eight months after the employment ends or the group health coverage ends, whichever comes first.

If you miss your Initial Enrollment Period and do not qualify for a Special Enrollment Period, you can enroll in Medicare Part B during the General Enrollment Period (GEP), which runs from January 1 to March 31 each year. However, if you’re using the GEP to enroll in Medicare, it’s likely you’ll be facing late enrollment penalties.

If you plan to enroll in a Medicare Supplement (Medigap) insurance plan to help cover costs not covered by Original Medicare, such as copayments, coinsurance, and deductibles, it's generally best to enroll during your Medigap Open Enrollment Period, which starts on your Part B effective date. During this period, you have guaranteed issue rights, meaning insurance companies cannot deny you coverage or charge you higher premiums based on pre-existing conditions.

Enroll in Medicare with Local Medicare Specialists

You’re well on your way to becoming a Medicare expert! We encourage you to learn as much as you can about Medicare on your own, but we’re also here to lend a helping hand. The team of advisors at Local Medicare Specialists helps thousands of people choose the right Medicare plan for them every year.

Working with an independent insurance agent ensures you get tailored, unbiased advice when choosing your Medicare plans. Reach out to a Medicare advisor near you today!