Medicare Part B

Medicare Part B is the medical insurance part of Medicare and it is used to cover preventative health care, doctor's services, doctor's visits and outpatient hospital care. Part B also covers some home health care services that are not covered by Medicare Part A.

Unlike Part A which is premium-free for most Medicare recipients, Part B requires an additional monthly premium. This premium is deducted from your Social Security check. The premium you pay is based on your modified gross adjusted income (MAGI- includes tax exempt interest income) from the IRS tax return you filed two years ago. The current 2011 Medicare Part B monthly premium for Original Medicare is $115.40 for individuals with a MAGI of less than $85,000 a year ($170,000 per couple). For high wage earners the Part B monthly premium increases up to $369.10 per month. Part B premiums usually increase every year.

Original Medicare Part B coverage also includes co-pays and a yearly standard deductible of $162.00. This means that you must pay the first yearly $162.00 for services before your Medicare Part B coverage starts to pay.

Auntie Lou says, "What DO YOU mean Part B premiums and deductibles? Haven't I paid enough? This is like getting juice from a turnip."

Under Original Medicare, Part B coverage entirely covers clinical laboratory services and Medicare-approved home health services. Durable medical equipment, doctor's services (inpatient) and therapy usually require a 20% patient co-pay. Other covered services and hospital outpatient services (including doctor's services) are paid using either co-payment or co-insurance amounts.

Outpatient co-pay per service can't exceed the inpatient hospital deductible (currently $1,132.00). Blood is usually paid for (because it is received free from the blood bank) but processing and handling fees are taken out of the Part B deductible. Mental Health Services are also covered but currently the patient pays 45% for Mental Health. This amount is gradually being stepped down until it reaches the standard 20% common to most other Part B services.

Part B Coverage, co-payments, deductibles and premiums can be very different under the various Medicare Advantage Plans. Each of these plans needs to be evaluated separately to determine whether the coverage is more cost effective for your needs than Original Medicare.

In summary, Medicare Part B works very much like standard private health insurance. Unlike most Part A recipients, Part B has a standard monthly premium. Part B is confusingly separated from "Hospital Insurance" Part A. Part A does not cover doctor's services or hospital outpatient procedures so practically speaking an individual needs Part B to use Part A without incurring huge medical bills. In some cases where an individual has excellent retiree health care coverage this may not be the case.