In Module 3, we discussed the coverage and associated costs for Hospital Insurance under Medicare Part A. We will now go on to an examination of the essentials of Part B, Medical Insurance. Under both Original Medicare and Medicare Advantage Plans (Part C), Part B covers many Medical Insurance costs for enrolled patients. In general, these cover medically necessary physicians’ services, outpatient care, home health services, durable medical equipment, mental health services, and other medical services. Part B also covers many preventive services.
After confirming that she has Medicare Part B, a patient will want to know what types of services are covered and the amount of the costs of those services for which she is going to be responsible. The list of covered services and payment requirements for patients is quite lengthy. It is itemized in the booklet, “Your Medicare Benefits,” that is provided by Medicare on its website, medicare.gov/publications, or in a hard copy that can be requested by calling 1-800-MEDICARE. In this module, we will consider a representative sampling of covered services and their associated costs to illustrate the breadth of the benefits that can be expected by a Medicare participant.
Premiums and Costs
People who are enrolled in Part B automatically have their premiums deducted from their social security payments.
Unlike Part A, even fully eligible Medicare recipients are required to pay premiums for Part B coverage. As of 2018, the base premium for Part B is $134 per month. People who earn more than $85,000 per year ($170,000 for married couples filing jointly) must pay additional “income related surcharges,” depending on income level. The highest payers are people earning $160,000 or more ($320,000 for married couples filing jointly), who pay monthly Part B premiums of $428.60 as of 2018. The numbers can increase each year through cost of living adjustments.
The base premiums are the minimums charged to new Part B enrollees, though many pre-existing social security recipients may not have to pay the full premium amounts. This is due to the social security “hold harmless” rule, which, by federal regulation, prohibits the government from decreasing social security benefits due to increases in Part B premiums. So, if Part B premiums increase more than social security “cost of living increases” (which increase social security benefits to keep pace with inflation), the recipient cannot be made to pay for the difference. As a practical matter, this means that many people who have been social security recipients for years, pay premiums that are somewhat less than the base premiums.
In addition to premiums, Part B recipients are responsible for deductibles and co-payments. As of 2018, the annual deductible for Part B is $183. The patient is responsible for costs of medical services up to the Part B deductible amount. Thereafter, Medicare pays 80% of the Medicare-approved amounts for most services. The patient is responsible for the remaining 20% of the Medicare-approved amount. As we discussed in the context of Part A, the Medicare-approved amount may be substantially less than the private pay rates.
The 20% coinsurance does not apply for covered preventive services received from physicians or other qualified health care providers. However, some preventive services may require payment of a deductible, coinsurance, or both.
Physicians and other healthcare providers can choose whether to participate in Medicare just as they can choose whether to participate in other types of insurance plans. Moreover, providers who do accept Medicare can choose whether to accept “assignment,” meaning that the provider agrees to charge only the Medicare-approved amount for a given service. The patient will still be responsible for 20% coinsurance for most services, but Medicare will pay the rest.
If a patient sees a provider who does not accept assignment, or if she has enrolled in a Medicare Advantage Plan under Part C or other supplemental insurance plan, her costs may be different than those offered under Original Medicare. As described in Module 2, Medicare Advantage Plans must follow rules set by Medicare, but they may charge different out-of-pocket costs and have different rules regarding referral to specialists or coverage for out-of-network providers for non-emergency or non-urgent care. It should be noted that Medicare Advantage Plans have yearly limits on out-of-pocket costs for medical services.
Providers who do not accept assignment may also charge the patient more than Medicare will pay for preventive services that Medicare ordinarily covers 100% of.
The following is a partial list of covered services under Part B. For each of these services, unless otherwise indicated, the patient will pay the following:
- For a service that is delivered in a doctor’s office or freestanding clinic, 20% of the Medicare-approved amount after the Part B deductible is paid for the given year and
- If it is provided in a hospital outpatient setting, an additional hospital copayment.
Advance care planning
Medicare covers voluntary advanced care planning as part of the patient’s yearly “wellness” visit. This is planning for care that she would want to get at a future time if she is not able to speak for herself. This might include signing a legal document variously called a living will, healthcare proxy or advance directive. There is no patient payment if the provider accepts assignment, unless this planning is not part of her yearly “wellness” visit, in which case Part B deductible and coinsurance will apply.
Medicare covers ambulance transportation to a hospital, critical access hospital, or skilled nursing facility for medically-necessary services if transportation in any other vehicle could endanger the patient’s health. Medicare will only cover ambulance services to the nearest appropriate medical facility that is equipped to provide the required care.
Ambulatory surgical centers
Medicare covers the facility services associated with approved surgical procedures provided in an ambulatory surgical center. Except for certain preventive services (for which the patient pays nothing if the health care provider accepts assignment), the patient pays 20% of the Medicare-approved amount to both the ambulatory surgical center and physician who treats him.
Medicare covers comprehensive programs that include exercise, education, and counseling for patients who meet at least one of a list of conditions, including having had a heart attack or coronary bypass surgery in the last year, current stable chest pain (angina pectoris), a heart valve repair or replacement, a coronary angioplasty or coronary stenting, a heart or heart-lung transplant, or stable, chronic heart failure.
Whether it is delivered in a doctor’s office, a freestanding clinic, or a hospital outpatient setting, chemotherapy is covered by Medicare Part B.
Chronic care management services
Medicare may pay for a health care provider’s management help if a patient has 2 or more serious, chronic conditions (such as arthritis, asthma, diabetes, hypertension, heart disease, osteoporosis and others). This may include creating a comprehensive care plan that will define the health problems and goals, the required care and coordinating the care. There is often a monthly fee for this management, and Part B deductible and coinsurance will apply.
If the surgery to implant a defibrillator occurs in a hospital inpatient setting, payment will be covered by Medicare Part A. Otherwise, Part B will cover it, necessitating payment of the Part B coinsurance.
Blood sugar testing monitors and supplies are covered by Medicare. The patient may be required to get the supplies from Medicare-approved suppliers. Part B will only cover insulin if it is medically necessary and it is administered with an external insulin pump. Injectable insulin and related supplies as well as some oral diabetes drugs may be covered by Medicare Part D, which covers prescription drugs.
Doctor and other health care provider services
Medicare will pay for medically necessary doctors services (including outpatient services and some services received as a hospital inpatient) for covered treatment-related and preventive services. It will also cover services from other health care providers such as physician assistants, nurse practitioners, social workers, physical therapists and psychologists.
Durable medical equipment
Many types of items that are ordered by a physician or other health care provider for home use, such as oxygen equipment and supplies, wheelchairs, walkers, and hospital beds, can be covered by Medicare. Doctors and durable medical equipment suppliers must be enrolled in Medicare to receive payment for claims. Medicare coverage of these devices requires a face-to-face examination and a written prescription from a qualified provider. Suppliers of these devices must accept assignment to be eligible for coverage.
Hospital Outpatient Services.
While inpatient hospital services are covered by Part A, Part B covers hospitals’ and doctors’ services provided in hospitals to outpatients. Note that a patient is considered an outpatient until formally admitted. A person can be an outpatient even if he spends days in an emergency room, intensive care unit or under observation until discharged or formally admitted.
Eyeglasses after cataracts surgery
Cataracts surgery itself may be covered under Part A or B. Though eyeglasses are not generally covered by Medicare, Part B covers one pair of corrective lenses following surgeries that implant intraocular lenses.
Part B covers certain blood tests, urinalysis, tests on tissue specimens and some screening tests. Laboratory services are further protected by two additional rules: First, a participating laboratory that meets Medicare requirements must provide these services. Second, there is generally no coinsurance responsibility of the patient.
Part B covers mental health services provided by psychiatrists, psychologists, clinical social workers, clinical nurse specialists, nurse practitioners and physician assistants. The services may include yearly depression screenings, family counseling to help cope with medical problems, mental health testing, psychiatric evaluations, diagnostic testing and management of psychiatric medication, though the medication itself would be covered, if at all, under Part D.
Part B also covers treatment for inappropriate alcohol or drug use.
Occupational or physical therapy
Part B covers medically necessary occupational or physical therapy and speech-language pathology services. While there is no limit to Medicare coverage of these services, coverage over $2,010 (as of 2018) must be accompanied by documentation from the treating professional justifying the treatment. Coverage over $3,000 per year may trigger additional reviews.
Covered Preventive Services
There are many medical services that are considered “preventive” that may be covered under Medicare Part B. Unless indicated otherwise, the patient pays nothing for these services if the provider accepts assignment (no coinsurance or copayment and deductibles do not apply). Examples of these preventive services include screening tests for a variety of conditions and diseases. There may be a limit on how frequently a given test may be conducted to be covered. The payment amounts will vary depending on the type of test. The tests include:
Cancer screening: including tests for
- Breast cancer
- cervical and vaginal cancer
- colorectal cancer,
- lung cancer,
- Prostate cancer.
Other covered screening tests include:
- Bone density measurement (such as testing for Osteoporosis)
- Depression (once every 12 months)
- Diabetes (up to twice each year)
- Glaucoma (yearly for people at high risk, though the patient pays 20% of Medicare-approved amount in coinsurance)
- Hepatitis C (for patients at high risk)
- HIV (once every 12 months and up to 3 times during a pregnancy)
Medicare covers immunizations for certain communicable diseases such as the following:
- Flu (once per season)
- Hepatitis B (for people at medium or high risk)
- Pneumococcal infections
Note that the shingles vaccine and many other commercially available vaccines are NOT covered by Part A or Part B, but may be covered by Part D.
Services Not Covered
If a patient needs a certain type of service that is not covered under Original Medicare Part A or Part B, she will need to pay for it herself unless she has other coverage (such as Medicaid or supplemental health insurance) or is in covered by a Medicare Advantage Plan that covers the service. Examples of items that are not covered by Original Medicare include:
- Most dental care, including dentures
- Routine eye examinations related to prescribing glasses or contact lenses
- Other eye care, except in the case of cataract surgery and post-surgical corrective lenses
- Cosmetic surgery
- Hearing aids and exams for fitting hearing aids
- Long-term care
- Special contract care plans, also known as concierge care, retainer-based medicine, boutique medicine, platinum practice and direct care.
Switching, leaving, and late enrollment
If a person did not sign up for Medicare Part B when she first became eligible, she may have to pay a late enrollment penalty for as long as she has Part B. The monthly premium for Part B may go up 10% for each full 12-month period that she could have had Part B but did not sign up for it. Thus, for example, if she signed up for Part B two years after she first became eligible, she will always have to pay a 20% premium penalty for as long as she is on Part B. So, don’t be late in signing up for Medicare!
Medicare health plans and prescription drug plans can make changes each year. These changes may include cost, coverages and which providers and pharmacies are in applicable networks. A subscriber may switch plans during the period from October 15 through December 7, with the new coverage beginning on January 1 of the following year. If she does not switch, changes within her existing Medicare health or prescription drug coverage would also begin at this time. The participant is informed of any changes to her plans in an Annual Notice of Changes.
We have now completed our look at the main components of Medicare Medical Insurance (Part B) coverage. We have looked at the types of services that are covered, with some detail around the premiums and the amounts of payment for which the patient would be responsible for many of those items. In the final module of this course, we will learn about the features of Medicare prescription drug coverage, also known as Medicare Part D.