Medicare Part B: What It Covers & How It Works

If you're approaching age 65 and have individual or no medical insurance, you're likely looking forward to becoming eligible for Medicare coverage. Medicare Part B, in particular, covers common services, such as doctor visits and outpatient treatments. But if you have healthcare insurance through an employer, you may wonder if it makes sense to pay for Medicare Part B.

If you want to know what Medicare Part B is and how it works, we’ve got you covered.

Medicare Part B is the medical insurance portion of Original Medicare that covers:

• Medically necessary services that diagnose or treat your medical condition
• Many preventive and screening services

It is the complement to Medicare Part A — another component of Original Medicare — which covers skilled nursing facility stays or inpatient hospital visits.

"Why would I want to enroll in Part B?" you might ask. You might have Medicare Part A — which would cover your room and board in the hospital — but if you don't have Medicare Part B, you could be exposed to major out-of-pocket expenses when you can least afford them during retirement.

If you no longer have any other healthcare insurance, Medicare Part B covers you for a significant event, such as a heart attack or a hip replacement. But with today's healthcare costs, the incident doesn't need to be major to cause financial distress if you have to pay 100% of the costs.

If you are a federal employee, you might use your Federal Employer Health Benefits (FEHB) instead of Medicare Part B. But if you qualify for Veterans Administration coverage, you may still decide to enroll in Medicare Part B to give yourself a civilian option.

You must also be enrolled in Medicare Part B if you want to access a Medicare supplement (Medigap) or a Medicare Advantage (Part C) plan.

Other healthcare coverage you have might require you to have Medicare Part B as your "primary" insurance, including when you:

• Are 65 or older with employer coverage at a company with less than 20 employees
• Have retiree coverage from a former employer
• Are 65 or older and enrolled in Medicaid
• Have been on COBRA insurance longer than seven months
• Are turning 65 with Department of Veterans Affairs Tricare for Life (TFL) or Civilian Health and Medical Program of the Department of Veteran's Affairs (CHAMPVA)

If you have questions about how Medicare Part B works with your other coverage, be sure to contact your program's benefits administrator.

Among the advantages of Medicare Part B, you'll find:

• Access to doctors and other providers nationwide who accept Medicare without needing authorization
• Most preventive services
• A yearly wellness check for free
• Availability of Medicaid or other government resources to help with costs
• The ability to integrate it with other insurances you might have

So, if the Medicare Part B benefits sound attractive, the next question becomes, "How does Medicare Part B work?"

You might wonder, "What does Medicare Part B pay for?" More specifically, "Does Medicare Part B cover doctor visits?" Yes, it does cover visits to the doctor, as well as those Medicare-approved expenses related to:

• Outpatient care, including medical and therapy services
• Telehealth
• Diagnostic tests
• Home health services
• Durable medical equipment — from wheelchairs to blood sugar monitors
• Mental health services (inpatient, outpatient, and through partial hospitalization)
• Preventive services, including flu shots and pneumococcal vaccines
• Screening services like mammograms, colonoscopies, and diabetes screenings
• Limited outpatient prescription drugs
• Ambulance services
• Clinical research

An exhaustive list of covered services is available on Medicare's website.

If a specific service is not on the list, you can determine if Medicare covers it by using the search tool on the Medicare website. Alternatively, you can also call OpenMedicare at (844) 910-2061 to speak to a licensed insurance agent who can explain what benefits are covered by each of the plans.

Medicare does not cover several things that you might think it would, such as:

• Long-term (custodial) care
• Most dental care
• Eye exams related to prescribing glasses
• Dentures
• Cosmetic surgery
• Acupuncture, except for chronic lower back pain
• Hearing aids and their fitting exams
• Routine foot care

How much is Medicare Part B? All enrollees pay a monthly Part B premium or have it paid for by the government as financial help if they qualify for Medicaid or one of three Medicare Savings Programs. In 2023, you will pay the standard premium of $164.90 per month if your income as an individual is $97,000 or less — or $194,000 or less if married and filing jointly.

Your Part B premium will be automatically deducted from your monthly benefit check if you are already receiving Social Security, Railroad Retirement Board benefits, or a Civil Service Retirement check. You will be billed if that's not the case.

If your individual annual income is higher than $97,000 (or $194,000 for joint filers), your Part B premium will be higher due to Medicare's Income-Related Monthly Adjustment Amount (IRMAA). What you pay in 2023 will be based on your 2021 tax return. Social Security will notify you of what you owe, ranging from $230.80 to $560.50 per month.

Lifetime access to immunosuppressive drugs is available to kidney transplant patients under Part B starting at $97.10 per month under these conditions:

• You qualify for Part B coverage because of End-Stage Renal Disease
• You have undergone a kidney transplant
• You have not reached age 65

Once you turn 65, you can transition to full Medicare coverage.

Besides your monthly premium, Medicare Part B has an annual deductible of $226 in 2023 before your Original Medicare starts to pay. Once you meet that deductible, Medicare will pay 80% of approved Medicare charges for Part B services.

You will be responsible for the Medicare Part B copay: the remaining 20% of the charges, which have no upper limit. Many people consider buying an optional Medicare supplement insurance (Medigap) plan to limit or cover their exposure to the 20% balance.

You may also be responsible for paying a late-enrollment penalty if you fail to enroll in Part B when you are first eligible and cannot justify the delay. The penalty increases your premium by 10% for every 12 months you didn't enroll in Part B, and it will be applied for as long as you have Part B, which is usually for the rest of your life.

If you are eligible for Medicare, you are eligible for Part B. That includes anyone who is 65 or older — or who might be younger but has been receiving Social Security Disability Insurance (SSDI) benefits for at least 24 months (one month for Amyotrophic Lateral Sclerosis or Lou Gehrig's disease). You are also eligible if you have End-Stage Renal Disease.

You can check your eligibility using Medicare's eligibility tool or speak to a licensed insurance agent at OpenMedicare by calling (844) 910-2061.

If your resources and income are limited, you may qualify for financial assistance from your state to pay the cost of Medicare Part B. Any of three Medicare Savings Programs with different limits might pay your Medicare Part B premiums, deductibles, coinsurance, and copayments. These include:

• Qualified Medicare Beneficiary (QMB)
• Specified Low-Income Medicare Beneficiary (SLMB)
• Qualifying Individual (QI)

These programs are federally funded but administered by individual state Medicaid agencies. When you apply through your state, you will be advised what programs you qualify for.

In 2022, monthly income limits for single beneficiaries ranged from $1,153 to $1,549; for couples, from $1,546 to $2,080. You're encouraged to apply even if you're not sure you qualify because your state may not count certain types or amounts of income or resources.

You can also get help with Part B costs from Medicaid, a joint federal and state program whose eligibility rules vary from state to state. Your state will pay your entire Medicare Part B monthly premium plus other costs if you have Medicare and qualify for full Medicaid coverage.

If you need further assistance, you can contact the OpenMedicare team at (844) 910-2061 or contact your state to determine your eligibility or apply for coverage.

Medicare Part B enrollment typically becomes available when you turn 65, during your seven-month Initial Enrollment Period that begins three months before your birth month and extends for three months after it. For example, if your 65th birthday is in July, that period will run from April through October.

If you miss that initial period, you may be able to enroll during a Special Enrollment Period (SEP) if you qualify because of an approved reason, such as losing your employer-based healthcare insurance. Otherwise, you will have to wait to enroll during the General Enrollment Period each year between January 1 and March 31 and may pay the penalty for missing the initial period.

Medicare Part B is a voluntary program. You don't have to enroll when you turn 65, and you can avoid penalties if you have health insurance through your job or your spouse's job. The insurance must be deemed creditable, meaning it meets Medicare's minimum standards. If so, you can wait until you retire or lose your employer coverage to enroll in Part B. You will have eight months from losing access to that insurance to sign up for Part B without penalty, regardless of whether you purchase interim insurance such as Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage. COBRA is temporary insurance your employer may be legally required to make available where you pay 100% of the premiums plus a small administrative fee.

You will be enrolled automatically in Medicare Part B within a month of turning 65 if you have received retirement benefits from Social Security or the Railroad Retirement Board for four or more months before turning 65. The same will happen if you receive disability benefits from Social Security or the Railroad Retirement Board for 24 months, but you will not have to wait until you turn 65. Because Part B includes a paid premium, you can keep it or refuse it.

Once you enroll in Medicare Part B, you do not have to renew it annually. However, you can decide to drop it at any time by notifying Social Security. If you change your mind and want to reenroll, you may have to wait until the next General Enrollment Period — between January 1 and March 31 each year — and may face a penalty for the uncovered period.

If you have not been signed up automatically because of benefits received from Social Security or the Railroad Retirement Board, you can apply online through Social Security. You will first have to create your mySocialSecurity account if you don't already have one.

You can also call Social Security at (800) 772-1213 for more information or to make an appointment to visit your local office. If you prefer individual assistance in how to get Medicare Part B, you can call OpenMedicare at (844) 910-2061 to be connected with a licensed insurance agent.

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