Understanding Original Medicare
Laying a Solid Foundation | Lesson 4

Medicare Part B

The second part of Original Medicare is Part B.

This is medical insurance, which provides coverage for outpatient care such as doctor visits, health care provider outpatient services, durable medical equipment, home health services, and some preventive services.

Like Part A, Medicare Part B also has a premium and out-of-pocket costs associated with coverage.

However, there are some important differences.

Unlike Part A, the premium for Part B is not waived for paying taxes pre-retirement.

Additionally, the Part B premium changes from year to year.

The majority of beneficiaries pay the same low amount, but the premium could increase depending on income.

Part B premium prices are broken down into tiers based on the beneficiaries’ yearly income bracket two years prior to the coverage year.

After the premium, there are still out-of-pocket costs on most Part B covered services.

We’ll start with the annual deductible.

A deductible is the amount you pay for health care services before your insurance plan begins to cover a claim.

The deductible resets back to zero at the beginning of each new coverage year.

After the deductible is met, a beneficiary typically pays 20% of the Medicare-approved amount for most doctor services.

When we say most, we’re referring to doctor services received, like hospital inpatient, outpatient therapy, and durable medical equipment costs.

Part B also includes many preventive services at no costs, like the annual wellness doctor visit and yearly depression screening.

Also, like Part A, there is a penalty for beneficiaries who do not sign up for Medicare Part B when first eligible if they do not have other creditable coverage.

The Medicare Part B penalty is 10% for each 12-month period that your client could have had Part B, but unlike Part A, there is no countdown on the Part B penalty.

The Medicare Part B penalty lasts for the rest of the time your client is on Medicare.

And that’s Part B of Original Medicare. But there is more to know, including what’s not covered, in our next lesson.

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