Medicare Part B better known as “Medical insurance” is the second building block to your health coverage in retirement. It is paired up with Medicare Part A to comprise what is known as Original Medicare.

What does Part B cover?

• Doctors' services.

• Outpatient hospital care.

• Laboratory tests.

• Outpatient physical therapy.

• Certain home health care, ambulance services, medical equipment and supplies.

Other services that are covered by Part B are:

• “Welcome to Medicare” visit. An exam that is received within the first year of enrollment.

• “Annual Wellness” visits with Primary Care Physician. All costs are covered and provides: a medical history, a health risk assessment, an evaluation of your physical condition, screening for cognitive impairment, including depression and it also includes a personalized prevention
  
  Please note; both the Welcome to Medicare and the Annual Wellness visits are NOT routine physical exams, but they do both provide an opportunity to talk with a Primary Care Physician about any health concerns.
  
  

• Abdominal aortic aneurysm screening.

• Alcohol misuse screening and counseling.

• Behavioral therapy for cardiovascular disease.

• Bone mass measurement.

• Cardiovascular disease screenings.

• Colorectal cancer screenings.

• Depression screening.

• Diabetes screenings.

• Diabetes self-management training.

• Flu shots.

• Glaucoma tests.

• Hepatitis B shots.

• HIV screening.

• Mammograms (screening).

• Obesity screening and counseling.

• Pap test/pelvic exam/clinical breast exam.

• Pneumococcal pneumonia shot.

• Prostate cancer screening.

• Sexually transmitted infection screening (STIs) and high-intensity behavioral counseling to prevent STIs.

• Smoking cessation.

What does Part B not cover?

Original Medicare, or Parts A & B do not cover:

• Routine Physicals.

• Dental.

• Vision.

• Hearing.

• Exams and Glasses.

• Cosmetic Surgery.

• Acupuncture.

• Care outside of the United States unless it is an emergency.

Please note: that if a procedure is considered to be “medically necessary” Medicare will even cover items typically not covered.

An example:

Mary had surgery to replace a detached retina that her Physician prescribed as medically necessary. The procedure, in order to be complete, hinges on Mary being able to see correctly. In order for this to be accomplished a new pair of eyeglasses, as well as the exam, are covered as they are medically necessary.

How to enroll into Medicare Part B?

Enrollment is somewhat the same as it is for Part A. Once you are eligible and if you are collecting Social Security benefits enrollment into Medicare Part B is automatic.

Please note: there are premiums associated with Part B, unlike Part A, so if you are still working you may want to decline coverage until officially retired. Declining is simple as all that is needed to do is contacting the Medicare offices.

For those who are not collecting Social Security enrollment, are 65 years or older and are not covered by credible health insurance through an employer or spouse’s employer enrollment is:

Initial Enrollment Period (IEP): 7 months that include the 3 months before the 65th birthday, the month of the 65thbirthday and the 3 months after.

For those who are 65 years old or older and who have left their employer plan after their IEP there is a Special Enrollment Period (SEP):

You must enroll into Medicare within 8 months after your employment ends and, again, Medicare does NOT recognize COBRA as creditable health insurance.

Part B Late Enrollment Penalty:

Medicare Part B does include a late enrollment penalty for those who have not enrolled during their IEP and who do not have creditable health insurance.

The late enrollment penalty is 10% of the current year’s part B premium for every 12 months Part B coverage was delayed.

This penalty is compounding (it grows the larger a person waits) and is perpetual (if you are subject to a late enrollment penalty this penalty will be added to your Part B premium each year).

An example:

Mary retired at age 65 in March. She did not enroll into Medicare as she thought she had creditable coverage through her employer as she signed up for COBRA.

After the 18 months of coverage through COBRA Mary enrolled into Medicare where she realized that Medicare does NOT recognize COBRA as creditable health coverage.

Not only did Mary miss her guaranteed insurability with Medicare Supplemental Plans and Medicare Advantage Plans, but that she also incurred a 10% late enrollment penalty for delaying enrollment into Part B for a full 12 months.

This 10% penalty will not only be added to her Medicare Part B premium year after year, but it will also be automatically deducted from her Social Security benefit too.

What are the Costs of Medicare Part B in 2021 (broken into 4 parts):

1. Premium (note that this premium is automatically deducted from your Social Security benefit):

$148.50 a month. This premium is also based on Medicare’s Income Related Monthly Adjustment Amount (IRMAA). Medicare will assess a surcharge for those of you who have earned too much income in any given year.

2. Deductible:

$203.00 per year. Unlike Medicare Part A’s deductible which is assessed per incident, Part B once met in that given year will not reoccur.

3. Co-pay

20 percent per occurrence where specified. This coinsurance is usually part of any coverage that includes a Physician visit, Surgical Supply and or Services and Durable Medical Equipment.

4. Excess Charges:

Typically, 15 percent on top of charge from the healthcare provider.

Other Part B: Income Related Monthly Adjustment Amount

What is IRMAA?

Medicare Part B and Part D are subject to means testing through Medicare’s Income Related Monthly Adjustment Amount.

In laymen terms CMS will be contacted about the amount of your income annually while enrolled into Medicare by the Internal Revenue Service (IRS).

If your income exceeds certain thresholds you may be subject to an added surcharge on top of your Part B and Part D premium.

The income thresholds for Part B in 2021 are:

If your yearly income in 2019 (for what you pay in 2021) was			You pay each month (in 2021)
File individual tax return	File joint tax return	File married & separate tax return
$88,000 or less	$176,000 or less	$88,000 or less	$148.50
above $88,000 up to $111,000	above $176,000 up to $222,000	Not applicable	$207.90
above $111,000 up to $138,000	above $222,000 up to $276,000	Not applicable	$297.00
above $138,000 up to $165,000	above $276,000 up to $330,000	Not applicable	$386.10
above $165,000 and less than $500,000	above $330,000 and less than $750,000	above $88,000 and less than $412,000	$475.20
$500,000 or above	$750,000 and above	$412,000 and above	$504.90

The income that used to determine IRMAA is defined by the IRS as: adjusted gross income plus any tax-exempt income or everything on lines 2a and 11 of the IRS form 1040 in 2021.

Examples of the income used are:

Social Security benefits	Distributions from Traditional 401(k)’s
Wages	Distributions from Traditional IRA’s
Tips and Interest	Distributions from Traditional 403(b)’s
Capital Gains	Distributions from Traditional SEP IRA’s
Dividends	Distributions from Traditional Keogh Accts
Pension and Rental Income	Distribution from Qualified Tax-Deferred Annuities

If you have further questions on Medicare Part B or any other Part of Medicare please contact:

• The Centers for Medicare Services at 1-800-772-1213 (TTY: 1-800-325-0778).

• Your local Social Security office – locations can be found https://www.ssa.gov/locator

• MedicareWizard at https://MedicareWizard.biz