Medicare - How Does It Work? Part B
Medicare Part B helps pay for out-patient medical care such as: office visits to medical specialists, outpatient hospital services, ambulance transportation, certain home health services, durable medical equipment and other items. The specifics of what is covered and what is not covered under Part B are complex and change periodically in response to cost containment efforts. The following is a recent list of some of the items that are excluded from coverage:
- Routine physical check-ups
- Eye glasses or contact lenses
- Hearing Aids
- Orthopedic shoes, except for diabetes
- Cosmetic surgery
- Custodial Care
- Most dental services
- Routine foot care
Medicare Part B is optional while you are an active employee enrolled in a health care plan and requires a monthly premium. The premium is set by the federal Medicare program and can change each year. The standard Part B premium is $104.90 per month (per person) in 2013, which pays for about one quarter of Part B’s actual cost; the federal government pays for the other 75 percent through general tax revenues. Premiums are based on your modified adjusted gross income as reported on your IRS tax return for the previous 2 years. Higher income beneficiaries will pay higher Part B premium rates. Below is a chart of the 2013 rates based on yearly income level in 2011.
|Filed Individual Annual Income Tax Return||Married Couples File Joint Income Tax Return||Rate|
|$85,000 - $107,000||$170,000 - $214,000||$146.90|
|$107,000 - $160,000||$214,000 - $320,000||$209.80|
|$160,000 - $214,000||$320,000 - $428,000||$272.70|
|$214,000 +||$428,000 +||$335.70|
Most active employees with PU healthcare coverage forgo enrollment in Part B because of its cost. If you decide to forgo Part b when you are first eligible, confirm your eligibility to avoid late enrollment penalties with Social Security. Employees and their legal spouses are usually allowed to enroll in Part B at any time while continuously covered by medical insurance through active employment.
When to Apply for Medicare Part B
Similar to Medicare Part A, the same 7-month Initial Enrollment period applies. However, if an individual is covered under an employer sponsored plan as an active employee or is the spouse of an active employee, an individual can delay their enrollment in Part B until they are no longer covered as an active participant without incurring a late enrollment penalty. This is called a Special Enrollment Period*. Many times individuals who are covered by their employer’s plan or their spouse’s employer’s plan defer the enrollment into Part B since it is an additional premium.
*Under a Special Enrollment Period persons can sign up for Part A and/or Part B as follows:
- Anytime that you or your spouse is working and you are covered by a group health plan through the employer or union based on that work
- During the 8-month period that begins the month after the employment ends or the group health plan insurance based on current employment ends, whichever happens first.
Note: COBRA and retiree health plans are not considered coverage based on current employment. Individuals are not eligible for a Special Enrollment Period when that coverage ends. To avoid paying a higher premium, make sure you sign up for Medicare when you’re first eligible.
How to Sign Up for Part B
- Apply online at Social Security
- Visit your local Social Security Office
- Call Social Security at 1-800-772-1213
Note: Original Medicare (Parts A and B) does not provide coverage for services rendered outside of the United States. See Medicare Supplemental Insurance (Medigap) for additional coverage options.