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Dissecting Health Insurance: Medicare Part B

Medicare is the federal government’s health plan for seniors. There are some individuals that qualify for Medicare coverage based on other criteria, but for most cases, age 65 qualifies one for enrollment in Medicare.

Understanding Medicare

Medicare includes 4 different categories, known as Parts A, B, C, and D. Each Part covers different aspects of the cost of medical care. Today we are discussing Medicare Part B.

What is Medicare Part B?

Medicare Part B covers professional services – this includes doctors, therapists, testing, and equipment. When you see your doctor at the office, this is covered by Medicare Part B. Any procedures performed in the doctor’s office, any tests performed by the doctor or the doctor’s staff, and any equipment provided in the doctor’s office are all covered by Medicare Part B. If you go to outpatient physical therapy, this is covered by Part B. If you receive home health care services, this is also covered by Part B.

If you are hospitalized for treatment, Medicare Part A covers the hospital bill, but the doctors treating you while you are in the hospital are covered by Part B.

Who qualifies for Medicare Part B?

Medicare Part B is similar to Medicare Part A in its eligibility. After age 65 most individuals will qualify for Medicare Part B. There are a few other criteria that can make someone eligible prior to age 65, like End Stage Renal Disease, or Social Security Disability but most individuals will qualify based on age.

Do I have to sign up for Part B?

Yes. Medicare Part B is a voluntary program and requires a monthly premium to be paid by the individual. There are only certain time periods when you may enroll and there are penalties that may apply based on when you apply.

Initial Enrollment Period

You qualify for Medicare at age 65. 3 months before the month of your 65th birthday until 3 months after the month of your 65th birthday is the time when you are supposed to sign up for Medicare Part B.

Special Enrollment Period

If you are covered by a group insurance plan (you or your spouse get coverage from working) when you turn 65, you may not want to immediately sign up for Medicare. If you then lose your group coverage (retirement), you have 8 months from the month your coverage ends or employment ends (whichever is first) to sign up for Part B.

General Enrollment Period

If you do not sign up during one of the above enrollment periods, you can sign up during the 1st quarter of each year (Jan 1 to Mar 31). You may face penalties for not signing up when you were supposed to. Coverage does not begin until July 1 after you sign up.

How much does Part B cost?

For 2015 the monthly premium for Part B is $104.90. If you do not sign up during your Initial Enrollment Period or Special Enrollment Period, your monthly premium will be adjusted as a penalty.

The deductible for Part B in 2015 is $147.

After you have paid your annual deductible, Part B covers professional fees at 80% of the allowed amount. If your doctor’s fee is $100, Medicare Part B pays $80, you are responsible for $20. If you have a surgical procedure that costs $1000, Medicare Part B pays $800, you are responsible for $200. There is no maximum coverage for Part B and no maximum out of pocket.

Can I refuse Medicare Part B?

Maybe. Part B is voluntary. You may purchase health insurance coverage from a private company instead of the government if you can find a plan available. Most private insurance companies will not sell you a plan if you are eligible for Medicare.

If your employer provides health care insurance coverage for employees, you may continue with that coverage even after age 65 if your employer and their insurance carrier allow it. Some companies will require you to sign up for Medicare Part B when you become eligible. Medicare Part B then becomes your primary insurance, and your private insurance becomes your secondary insurance.

What if my doctor does not accept Medicare?

Not all physicians participate in the Medicare program. If your physician does not participate, you will pay your physician directly for the services you want. You may not seek reimbursement from Medicare for the amount you spend on non-participating physician services. Currently, a non-participating physician can order tests, prescribe medications, and admit Medicare patients to the hospital and Medicare will pay for the services provided by participating providers. Medicare will not pay for services provided by the doctor if the doctor does not participate in the program.

Why would a doctor not participate in Medicare?

Individuals have the right to participate with Medicare or not. Similarly, physicians have the right to participate with Medicare or not.

If your physician is a participating provider with Medicare, they must agree to abide by the rules and regulations set forth by the federal government. They must also agree to accept the payment determined by the federal government for the services they provide. This agreed payment is known as the “allowable amount”. If a doctor normally charges $200 for an office visit, but Medicare determines the “allowable” for that visit is $100, the doctor will receive $80 from Medicare (80% of $100) and the patient is responsible for the remaining $20 (20% of $100). The doctor must reduce his normal $200 charge to $100 because the government has determined the price for him. The doctor is not allowed to collect $120 from the patient ($200 charge minus $80 Medicare payment). That is known as balance billing and is not allowed by Medicare.

Our federal government is well known for its spending excess. The Medicare program is also in jeopardy of running out of funding in the next decade or two. One of the expected strategies for controlling health care spending is to reduce the fee paid to physicians for medical services. Instead of paying $100 for an office visit, Medicare may reduce the “allowed amount” to $80, or lower. Instead of paying $1500 for a hip replacement surgery, Medicare may reduce the “allowed amount” to $1000. These reduced fees will force physicians to accept an artificially low fee for the services they provide. This is basically forced charity. Physicians will be required to provide their expertise and services at below-market rates, simply because the government has decided to lower the price. Patients are not allowed to pay more than the “allowed amount” determined by the government. If a doctor decides he is not able to provide certain services for the fee determined by the government, he will simply stop providing that service. Patients will not be able to find a physician willing to provide the services they need. The only way patients will be able to get the care they want and need, is to find a physician outside the system, one free to deal directly with patients and provide the services they need at a price that is agreed upon by the patient and the doctor.

As you can probably guess, I do not participate in the Medicare program. I want to remain free to treat patients in the best way I know how. I want to be free to deal directly with my patient regarding treatment decisions and the fee paid for the services I provide. I want to be free to spend as much time as I think a patient needs, without having to worry about checklists or billing codes that the government has decided are more important than talking to my patients. I want to be my patient’s doctor, not a government worker.

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