Medicare Part B is one of the two parts of Original Medicare. Original Medicare is managed by the Federal Government and is considered a fee-for-service healthcare plan, where you pay a percentage of the costs for healthcare services you utilize.
Medicare Part B is frequently referred to as the “medical insurance” portion of Original Medicare. It can help cover doctors’ services, preventive care, medical devices, hospital outpatient care, home health care, and more.
The other part of Original Medicare is called Medicare Part A. Part A is frequently referred to as the “hospital insurance” portion of Original Medicare. It helps cover inpatient care costs when you are in a hospital or skilled nursing facility that accepts Medicare.
Note: Unlike Medicare Part A, it may make sense to delay your enrollment in Part B if you have additional health coverage through an employer. We’ll cover this in detail below.
Medicare Part B eligibility
Just like Medicare Part A, most people are automatically eligible for Medicare Part B when they turn 65. However, you must be a U.S. citizen or a legal resident who has been living continuously in the U.S. for at least 5 years.
If you are under 65, you may also be eligible for Medicare Part B if you have end-stage renal disease or amyotropic lateral sclerosis (Lou Gehrig’s disease).
Medicare Part B premiums
The standard Medicare Part B premium in 2020 is $144.60 per month. However, you may pay more or less than this amount depending on your income and other factors.
Medicare Part B deductibles and other costs
A deductible is the amount you must pay out of pocket before Medicare starts covering your medical bills. For 2020, the Part B deductible is $198 per year.
After you meet your deductible, Medicare will start paying 80% of the Medicare-approved amount for Part B covered health services. You will be responsible for the 20% that is not covered by Medicare.
This is why many people get a Medicare Advantage or Medicare Supplement (Medigap) plan. These supplemental plans can cover most or all of the 20% left over after Medicare pays.
What are Part B excess charges?
Part B excess charges are the difference between how much a doctor charges for a service and how much Medicare has agreed to pay for it.
It is pretty rare to pay excess charges since most doctors only charge the Medicare-approved amount. If you do have a doctor who charges more than the Medicare amount, you can find a Medigap policy that will pay for those excess charges.
How to enroll
If you started to receive Social Security or Railroad Retirement Board (RRB) benefits at least three months before your 65th birthday, you do not need to apply for Parts A or B (Original Medicare). You’ll be auto-enrolled in Original Medicare and should receive information in the mail explaining your benefits.
If you did not start your Social Security or RRB benefits at least three months before your 65th birthday, you’ll need to enroll on your own. You can do this during your Initial Enrollment Period (IEP), which spans the three months prior to your 65th birthday month, your birthday month, and the three months following your birthday month. For example, if your birthday is in April, you have from January 1 to July 31 to enroll.
Enrolling is a relatively quick process and there are three ways you can do it:
- Online: https://www.ssa.gov/retireonline/
- Over the phone: 800-772-1213
- In person at your local Social Security office. Look up your office here.
Your first enrollment period is crucial, as missing this window will almost certainly result in higher premiums for the rest of your life.
If you are receiving any other kind of Social Security benefits besides regular retirement benefits (such as spousal benefits), you should contact your local Social Security office to see if you will be auto-enrolled in Medicare.
What services are covered by Medicare Part B?
- Helps cover doctors’ services, hospital outpatient care, and home health care.
- Helps cover tests, shots and some preventive services to maintain your health and to keep certain illnesses from getting worse (flu shots, PAP tests).
What is not covered by Medicare Part B?
Generally, Part B won’t cover prescription drugs (with some exceptions), routine foot care, dental, vision, hearing care, hearing aids, dentures, and acupuncture.
Should I delay enrolling in Part B?
The monthly premiums for Medicare Part B can be quite expensive so it may make sense to delay your enrollment if you are still employed and have creditable coverage from your employer’s health plan.
If you decide to delay enrollment and don’t have creditable coverage from your employer-sponsored health plan, you may pay a late enrollment penalty once you do enroll in Part B. The penalty can be fairly large and will continue for the entire time that you are on Medicare.
After your employer-sponsored coverage ends, you will enter into a Special Enrollment Period (SEP) that lasts for 8 months. During this 8 month period you will be able to enroll in Medicare Part B without paying a late enrollment penalty.