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Medicare Part B Premium What it is Eligibility FAQs

Medicare Part B Premium What it is Eligibility FAQs

The Medicare Part B premium is a monthly fee that Medicare beneficiaries pay for coverage of doctor’s services, lab tests, and outpatient care under the federal health insurance program. Medicare Part B coverage complements hospital insurance under Medicare Part A and does not charge premiums for most U.S. citizens and permanent residents age 65 and older, based on past payroll taxes paid.

Medicare sets Part B premiums annually and deducts them monthly from the Social Security checks of most participants. About 7% of Medicare Part B participants pay more than the standard monthly premium based on income.

Key Takeaways:

– Medicare Part B covers ambulance services, doctor visits, lab tests, and certain medical equipment.

– Unlike Part A, which is available to most people at no cost, Part B has a monthly premium.

– About 7% of participants with the highest income pay a higher premium.

– Part B premiums are set annually and deducted monthly from Social Security checks for most participants.

What Is the Medicare Part B Premium?

Medicare is a U.S. federal health insurance program funded by payroll taxes under the Federal Insurance Contributions Tax (FICA). Medicare Part B is insurance for outpatient medical care, covering doctor visits, preventive screenings, ambulance services, mental health care, and durable medical equipment.

The standard Medicare Part B monthly premium is $174.70 in 2024. Some participants pay more based on income.

Premium surcharges for the highest earners are set for the year ahead based on modified adjusted gross income for the most recent tax year. For example, the premium surcharges for 2024 apply to single taxpayers with modified adjusted gross income (MAGI) above $103,000 and joint filers with MAGI above $206,000.

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The standard Part B premium covers about 25% of the cost, with Medicare subsidizing the remainder. The premium surcharge tiers are set at 35%, 50%, 65%, 80%, and 85% of the cost.

The annual deductible for Part B is $240 for 2024, and the patient pays 20% of the bill as coinsurance. Participants who don’t have their Part B premiums deducted automatically from Social Security or Railroad Retirement Board benefits can expect a bill for them every three months.

Eligibility for Medicare Part B:

Medicare is available to U.S. citizens and permanent legal residents who are age 65 or older, under age 65 and have a disability, have end-stage renal disease (ESRD), or have amyotrophic lateral sclerosis, also called Lou Gehrig’s disease.

When you are first eligible for Medicare, you have a seven-month Initial Enrollment Period to sign up for Part A and/or Part B. If you’re eligible when you turn 65, you can sign up during the seven-month period that starts three months before the month you turn 65 and ends three months after the month you turn 65. If you don’t sign up for Part B when you are first eligible, you could be stuck paying a permanent late enrollment penalty of 10% for each year of coverage missed if you sign up later.

However, you may choose to delay enrolling in Part B without a penalty if you already have qualifying health coverage. Check Medicare’s website for more information.

The Other Parts of Medicare:

– Medicare Part A covers inpatient care at hospitals, skilled nursing homes, and hospices. It is typically free if you or your spouse paid U.S. payroll taxes for at least 10 years. There is a deductible per benefit period for Part A, set at $1,632 in 2024. There is no coinsurance payment unless a hospital stay exceeds 60 days.

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– Medicare Part C, also called Medicare Advantage, is offered by private companies contracted by Medicare. It replaces Part A and Part B coverage and may provide extra coverage for vision, hearing, and dental care. Most Medicare Advantage plans include Medicare Part D (prescription drug) coverage. Medicare Advantage plans may pay some or all of a participant’s Part B premium and often have lower out-of-pocket costs. The average monthly premium for a Medicare Advantage plan is $18.50 for 2024.

– Medicare Part D is optional coverage for prescription drugs available from private insurance companies. The average basic monthly premium for standard Medicare Part D coverage is $55.50 for 2024.

How Much Does Medicare Part B Cost?

The standard monthly Medicare Part B premium is $174.70 for 2024. Individuals with more than $103,000 in 2021 modified adjusted gross income pay more in 2024. The annual deductible for Medicare Part B coverage is $240 for 2024.

Do I Need Medicare Part B?

Medicare Part B is worth the extra cost for many people as it offers coverage for ambulance services, doctor visits, lab tests, and medical equipment. Not having insurance coverage for these costs could result in a substantial bill in case of a health problem or injury. Individuals working past age 65 for an employer providing coverage should compare the costs and benefits with those of Medicare.

What Are the Four Parts of Medicare?

The four parts of Medicare are Part A (hospitalization and hospital treatment), Part B (medically necessary outpatient services and care), Part C (Medicare Advantage, which replaces parts A and B and often includes Part D prescription drug coverage), and Part D (prescription drug coverage medicine).

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The Bottom Line:

Medicare Part B covers ambulance services, doctor visits, lab tests, and certain medical equipment. Unlike Part A, which is available to most eligible individuals at no cost, those who sign up for Part B pay a monthly premium. Part B also has an annual deductible and coinsurance of 20%. The government subsidizes about 75% of the cost of Medicare Part B for the vast majority of beneficiaries paying the standard monthly premium, a good deal for those who qualify.

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