Estate Planning FAQ
What is Medicare Part B?
Medicare is a health insurance program offered by the federal government to those over age 65, with certain disabilities and with end-stage kidney failure (renal disease). Medicare is funded by a wage tax paid by the majority of US workers.
Medicare is divided into four parts:
- Medicare Part A – hospital insurance that pays for inpatient care, hospice care and some of the costs associated with home health care and nursing home care that meet strict requirements set out under the program
- Medicare Part B – medical insurance that pays for doctor visits, outpatient care and other medically necessary services not covered by Medicare Part A
- Medicare Part C – also known as Medicare Advantage Plans, Medicare Part C is administered by private insurance companies that offer the benefits of Medicare Part A and B and sometimes provide additional coverage not offered by the Original Medicare Plan (Part A and B), which may include prescription drug coverage
- Medicare Part D – prescription drug coverage
Medicare Part B is optional – meaning you have to enroll in the program in order to receive the benefits of it. It is not a free service. The average cost of monthly premiums for an individual is $96.40 for 2008. Those with a higher income will pay a higher premium, and if you do not enroll in the program during your open enrollment period, the premiums will be higher as well.
Medicare Part B will only pay for medically necessary services, which is defined as “services or supplies that are needed for the diagnosis or treatment of your medical condition and meet accepted standards of medical practice.” Medicare Part B also will pay for some preventive services, such as bone mass measurements, flu and pneumonia shots and diabetes and cancer screenings. However, some of the services you may want or need may not be paid for by Medicare Part B, including:
- Cosmetic surgery
- Dental care
- Hearing aids
- Long-term care (like nursing homes)
- Eye glasses
Medicare Part B will not pay all of the costs of the medically necessary services you receive. For many services, Medicare Part B pays 80% of the costs, meaning you will be responsible for the remaining 20% of the Medicare-approved cost for the service. Also, before Medicare Part B will begin covering any costs, you must meet the annual deductible amount, which is currently $135. Since Medicare will not pay all of your costs, you may want to consider having additional insurance to cover the gaps in coverage. This can include a private insurance policy, Medigap coverage or enrolling in a Medicare Part C plan.
For more information on Medicare in general or Part B in particular, visit the US Department of Health and Human Services Web site for the Centers for Medicare and Medicaid Services.
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