Are you nearing age 65? Or have you been on Social Security disability for 24 months? If you answered yes to either question, you would want to become familiar with Medicare before enrolling. Medicare is health insurance offered by the federal government. Although Medicare will send you a booklet explaining Medicare, there are still some important facts you will want to read more about. For example, Part B excess charges can be confusing to understand, so be sure to read more on excess charges here: boomerbenefits.com/part-b-excess-charges/
But keep reading as we discuss five important facts about Medicare Part B.
You may be able to delay Part B
There is a specific time you will need to enroll in Medicare, the Initial Enrollment Period (IEP). The IEP begins three months before your 65th birthday month and ends three months after. For example, if your 65th birthday is on May 12, your IEP would start on February 1 and end on August 31. During this time, you will apply for Medicare through the Social Security office.
However, let’s say you or your spouse are actively working for a large employer with 20+ employees, and their health insurance plan covers you. In this case, you can delay your Medicare enrollment until you or your spouse retire or lose active employer coverage. If your employer has less than 20 employees, you will want to enroll in Medicare through Social Security to avoid a late enrollment penalty!
Suppose you delay Medicare due to creditable coverage. In that case, you will want to ensure your HR department fills out the form CMS-L564, proving you were covered by creditable coverage while delaying Medicare. You will submit this form, along with form CMS-4B (Part B application), to the Social Security office when you apply for Medicare.
Medicare Part B covers outpatient services
Two parts make up Original Medicare: Medicare Part A and Medicare Part B. Medicare Part A covers inpatient care, and Medicare Part B covers outpatient care. Here are a few services that fall under Medicare Part B:
- Doctor’s visits
- Ambulance rides
- Durable medical equipment
- Outpatient surgeries
- Chemotherapy and radiation
- Emergency room visits
- A Welcome to Medicare visit and Annual Wellness Visits
Medicare covers medically necessary services to treat or diagnose an injury, illness, or disease. But, there are some outpatient services that Medicare Part B does not consider medically necessary, such as routine dental, vision, and hearing services. However, that does not mean that Part B will not cover outpatient cataract surgery. It just won’t cover these services if they are coded as routine.
What is a Part B excess charge?
Before you schedule a visit with your doctor, ask if they accept Medicare Assignment. If they don’t accept Assignment, you could be charged extra for your visit. Here’s what this means –
Medicare Assignment is when your doctor agrees to the Medicare-approved amount as the full payment for your medical services. If your doctor does not accept Medicare Assignment, they can charge you up to 15% extra than the Medicare allowable amount. The 15% charge is known as a Part B excess charge.
Be sure to ask your doctor if they accept Medicare Assignment, so you aren’t hit with a surprise bill that costs more than you expected.
Part B doesn’t cover all services in full
As mentioned above, Medicare Part B covers outpatient services. However, this does not mean that Part B covers all of these services 100%. Now, Part B does cover many services in full, such as the Welcome to Medicare visit, but for the most part, you will have out-of-pocket costs for most of your outpatient services.
Medicare Part B has an annual deductible of $233 in 2022 and will decrease to $226 in 2023. When you have a Medicare-approved outpatient service, you will first need to pay the deductible. After you meet the deductible, Part B will cover 80% of your Medicare-approved outpatient services. You will pay the remaining 20% coinsurance for your services for the rest of the year.
Due to these out-of-pocket costs, many beneficiaries purchase a Medigap or Medicare Advantage plan from a Medicare broker for cost-sharing help.
The more you make, the more you pay
Medicare Part B has a monthly premium that all beneficiaries must pay. The standard Part B premium in 2022 is $170.10 in 2022; in 2023, the premium will decrease to $164.90 per month. However, if you are in a high-income tax bracket, you will pay an income-related monthly adjustment amount (IRMAA) fee on top of your monthly Part B premiums. Here’s why –
The Social Security office will look at your modified adjusted gross income (MAGI) reported on your tax returns two years ago to determine your Part B premium. If they find that you are in a high tax bracket, you will pay the IRMAA fee. Depending on your income level, you could pay more than $500 monthly for Part B.
But don’t fear; you could appeal your higher Part B premium if you experienced a life-changing event like retirement or divorce. You will submit a reconsideration form to the Social Security office so they can re-evaluate your monthly premiums.
Medicare can feel daunting at times but know that there are many free online Medicare resources to help further your Medicare knowledge. Utilize your resources and work with a reputable Medicare broker, so you don’t have to navigate this maze alone!