Medicare Part B is sometimes called medical insurance. Part B is designed to cover medical costs that are not handled by Part A. Generally, Part B covers those medical costs that are incurred on an outpatient basis (outside the hospital), which are not covered by Part A. However, Part B also helps to pay doctor bills, whether incurred inside or outside the hospital.
Part B covers Medicare-eligible physician services (whether received inside a hospital or in a doctor’s office), outpatient hospital services, certain home health services, and durable medical equipment. It also covers many services, tests and preventive treatments. It covers medically necessary tests, labs, and screenings, preventive services such as exams, X-rays, MRIs, CAT scans, EKGs, lab tests, or screening inoculations, glaucoma tests, bone mass measurements, blood tests, mammograms, cervical and vaginal cancer screenings, prostate cancer screenings, colorectal cancer screenings, and cardiovascular screenings. Medicare Part B will also cover diabetes screenings, diabetes self-management training, as well as diabetes testing supplies. Some home health services are covered, plus ambulance services. Emergency room services are also covered. Part B will also cover treatment for some mental health conditions such as depression, anxiety, or substance abuse. Part B would also cover medical equipment like canes, walkers, wheelchairs, and mobility scooters. If you have to pay for the blood that you receive during surgery, Part B will pay the cost of the blood you receive beyond the first three pints. Medicare Part B also covers one flu shot per season, as well as glaucoma tests, hearing and balance exams ordered by a doctor, hepatitis B shorts, HIV screening, as well as kidney dialysis services and supplies.
Medicare will cover a one-time screening abdominal aortic aneurysm ultrasound screening for people at risk, but you must get a referral from your doctor or other practitioner. You pay nothing for the screening if the provider accepts assignment.
Medicare Part B has an annual deductible of $183 per year in 2018, up from $166 in 2016. After you have met the deductible, you generally pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you're a hospital inpatient), outpatient therapy, and durable medical equipment. However, there is a catch here--the expenses incurred that count against meeting the deductible are based on a “reasonable charge” established by Medicare, not on the provider’s actual charge. Unfortunately, the “reasonable charge” as established by Medicare is often substantially less than the actual charge, which means that the patient is sometimes left with substantial out-of-pocket expenses.
The deductible, copays, and the coinsurance under Part B can add up to a lot of money, and many people purchase Medicare Supplement insurance policies (known as Medigap) to help handle some of the deductibles and co-pays that Part B does not cover. Alternatively, some Medicare recipients enroll in a Medicare Advantage plan which can also help to defray some of these costs.
Medicare Part B does not cover everything. It does not cover dental work, acupuncture, cosmetic surgery, hearing aids or hearing tests not ordered by a doctor, custodial care at home or in a nursing home, routine eye care, or eyeglasses (but it will cover eyeglasses after cataract surgery). It also does not cover items and services that are deemed to be not reasonable or medically necessary. But you may have other coverage (including Medicaid) that will cover these costs, or you may have a Medicare Advantage health plan that will cover some of these services.
Medicare Part B does not cover prescription drugs purchased from a pharmacy, but it will cover those prescription drugs that require administration by a physician, such as the injections you get in a doctor’s office. Other types of drugs given in a hospital outpatient setting (sometimes called “self-administered drugs” or drugs that you would take on your own) are not covered by Part B. In order to have these drugs covered, the patient would need to have Medicare Part D or some other prescription drug plan.
Initially, Part B did not cover routine physical exams, but it would cover a “Welcome to Medicare” physical if you got it within the first 12 months after you had signed up for Part B. However, under the provisions of the 2010 healthcare reform act, Medicare Part B was revised so that one can get an annual physical exam (sometimes known as a “wellness” visit) and many preventive services without having to pay a deductible or coinsurance.
Initially, outpatient psychological services covered under Part B were subject to 50 percent coinsurance. The 2008 Medicare Improvements for Patients and Providers Act (MIPPA) has changed all that, and the coinsurance for outpatient psychological services under Part B will be reduced in stages by 2014 to only 20 percent coinsurance, which brings it in line with the coinsurance for other covered services under Part B.
There is a growing awareness of the importance of preventive services in the early detection of health problems and in the identification of risk factors that could lead to future health problems. MIPPA allows Medicare to cover such services if they are recommended by the US Preventive Services Task Force. MIPPA also waives the deductible for the “Welcome to Medicare” initial preventive exam and it extends the eligibility period from six months to one year after enrollment in Part B.
There is no cap on the amount of money Medicare Part B will pay for covered hospital services in any given year. However, there are annual caps on the amount of money that Medicare Part B will pay for certain things like outpatient therapy services. For example, there are caps on Medicare payments for physical therapy and speech-language pathology combined, as well as on occupational therapy. A beneficiary must first cover the deductible and then pay 20 percent coinsurance. Medicare will then cover the remaining 80 percent up to the annual cap, which was $1900 in 2013. Once the beneficiary has reached the $1900 cap, they are responsible for 100 percent of the charge, unless they have other insurance coverage. However, there is no cap if the patient goes to a hospital outpatient therapy department. CMS can grant some exceptions to the caps when the therapy is deemed “medically necessary”.
If you have limited income and resources, there may be state programs to help pay your Medicare costs if you meet certain conditions. These programs are generally known as Medicare Savings Programs, and they may help to pay for Part A and/or Part B premiums, deductibles, coinsurance and copays. The names of these programs and how they work may vary from state to state. In order to qualify, there are rather severe means tests applied to your income and resources, but these vary from state to state.
Unlike Part A, there is a monthly premium for Part B. The standard monthly Part B premium for most people in 2018 is $134. However, even though basic eligibility for Medicare is not based on income or financial resources, some more wealthy people have to pay higher premiums for Medicare Part B, based on their modified adjusted gross income that was reported on their IRS Form 1040. Social Security will use the income reported two years ago on the income tax return to determine the premium—if one had filed an individual tax return with an annual income of more than $85,000 (or a married joint return more than $170,000), then the higher premium will apply. This affects less than 5 percent of people with Medicare, so most people do not need to pay a higher premium. Each year, Social Security will notify you if you are required to pay more than the standard premium.