What Is Medicare Part B
Medicare Part B offers medical insurance to cover medically-necessary outpatient health care. This health coverage is used for most of your non-urgent care, such as ordinary doctors visits. Part B also covers other things, such as durable medical equipment and home health care in some instances. Notably, Part B doesnt cover prescription drug coverage, dental, or vision. Prescription drug coverage is offered by Part D plans, but vision and dental are only covered by some Part C plans, and are less common.
Part B is one of the core insurance plans that makes up Medicare. Together with Medicare Part A, which covers your hospital insurance, its known as Original Medicare. Medicare Parts A and B of Medicare are the only parts of Medicare that are directly covered by the federal government. Part C plans, also known as Medicare Advantage Plans, and Medicare Part D prescription drug plans are offered by private insurance companies instead.
Part A and B are also the only parts of Medicare that Medigap plans cover. Medigap plans, also known as Medicare supplement plans, provide extra help and coverage for your Part B out-of-pocket expenses, like deductibles and coinsurance. Most Part B expenses will be the same for everybody since theyre mandated at the federal level.
What If Im Already Receiving Social Security Benefit Payments
You become eligible to receive Social Security benefits at age 62. Because the Medicare initial enrollment period starts at 65 for most people, many people receive Social Security before theyre eligible for Medicare.
Its very important to remember that if you receive Social Security benefits when you become eligible for Medicare, you will be enrolled automatically. If you do nothing at all, then youll simply start receiving Part B coverage and have your premiums deducted from your Social Security check.
Social Security Benefits And Medicare Part B Premiums From 2000 To 2018
Social Security benefits and Medicare Part B premium amounts are adjusted annually using different methods, which typically has resulted in a higher percentage increase in Medicare Part B premiums than in Social Security benefit increases. Specifically, Social Security benefits are adjusted for inflation annually by COLAs. The Social Security COLA is a measure of general inflation based on the CPI-W. By contrast, Medicare Part B premiums are adjusted annually to account for changes in Medicare program expenditures for covered medical services. Medicare Part B premiums represent a percentage of the actual costs of the program, and thus premiums rise as health care costs rise. The annual percentage increase in Social Security benefits and Medicare Part B premiums for years 2000 to 2018 is shown in Figure 1.
Since 2000, Social Security COLAs have ranged from 0.0% to 5.8% with an average Social Security COLA of 2.2%. There was no Social Security COLA increase in 2010, 2011, or 2016 and only a relatively small Social Security COLA in 2017.
Since 2000, the Social Security annual COLA has resulted in a cumulative benefit increase of approximately 50%, considerably less than the Medicare Part B premium growth of close to 195%.58
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Original Medicare Or Medicare Advantage
Medicare beneficiaries can decide between Original Medicare and Medicare Advantage for health insurance coverage.
Original Medicare consists of Part A hospital insurance and Part B medical insurance.
Typically, Medicare will deduct the premium for Part B from Social Security income. Other methods are also valid, but this leaves responsibility to the beneficiary to keep track of payments.
As the alternative, Part C Medicare Advantage plans must cover services equal to Original Medicare, or better.
A and B are both required to get Part C.
Medicare Advantage is a set of private plans from insurance companies. Medicare pays these companies an agreed fee for each beneficiary who joins. In turn, the private company takes over as the Medicare insurance carrier. This means the company sets health plans up with networks of Medicare-assigned doctors and facilities, as well as handling bills, claims, appeals.
In the same way as Original Medicare, Medicare Advantage can deduct the plan premium from Social Security income, or other billing methods can be chosen.
Medicare Advantage plans frequently offer benefits above and beyond what Original Medicare includes. Benefits can cover dental, vision, hearing, and even transportation for medical visits.
Can I Delay Enrolling In Medicare Part B
Some people may get Medicare Part A premium-free, but most people have to pay a monthly premium for Medicare Part B. Because Medicare Part B comes with a monthly premium, some people may choose not to sign up during their initial enrollment period if they are currently covered under an employer group plan .
If you are still working, you should check with your health benefits administrator to see how your insurance would work with Medicare. If you delay enrollment in Medicare Part B because you already have current employer health coverage, you can sign up later during a Special Enrollment Period without paying a late penalty. You can enroll in Medicare Part B at any time that you are still covered by a group plan based on current employment. After your employer health coverage ends or your employment ends , you have an eight-month special enrollment period to sign up for Part B without a late penalty.
Keep in mind that retiree coverage and COBRA are not considered health coverage based on current employment and would not qualify you for a special enrollment period. If you have COBRA after your employer coverage ends, you should not wait until your COBRA coverage ends to sign up for Medicare Part B. Your eight-month Part B special enrollment period begins immediately after your current employment or group plan ends . This is regardless of whether you get COBRA.
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Elixir Insurance is a Prescription Drug Plan with a Medicare contract. Enrollment in Elixir Insurance depends on contract renewal.
Other pharmacies are available in the Elixir Insurance network. Customers can choose from many Med D plans in which Rite Aid participates.
Medicare Part B Costs
Most people pay the standard Part B premium. In 2021, that amount is $148.50.
If the modified adjusted gross income you reported on your taxes from 2 years ago is higher than a certain limit, though, you may need to pay a monthly IRMAA in addition to your premium. The maximum you can expect to pay for your Part B premium is $504.90 per month.
Medicare Part B also has out-of-pocket costs associated with it. These include an annual deductible of $203. After youve met your deductible, youll pay coinsurance on most services that Medicare Part B covers. This amount is 20 percent of the Medicare-approved costs of services and supplies.
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What Does Medicare Mean On My Paycheck
When Medicare was enacted as a federal law in 1965, the funds to support the program became a payroll tax on earned income. The payroll taxes required for the Federal Insurance Compensation Act are to support both your Social Security and Medicare benefits programs. Your employer makes a matching contribution to the Medicare program.
Currently, the FICA tax is 7.65 percent of your gross taxable income for both the employee and the employer. The Social Security rate is 6.2 percent, up to an income limit of $137,000 and the Medicare rate is 1.45 percent, regardless of the amount of income earned. Your employer pays a matching FICA tax. This means that the total FICA paid on your earnings is 12.4 percent for Social Security, up to the earnings limit of $137,000 and 2.90 percent regardless of the total amount you have earned. The benefit of placing funds into this program during your working career is the healthcare coverage you will receive at the time you become eligible for Medicare benefits.
Who Pays for Medicare?Every person who receives a paycheck is paying a Medicare tax. If you are retired and still working part-time, the Medicare payroll tax will still be deducted from your gross pay. Unlike the Social Security tax which currently stops being a deduction after a person earns $137,000, there is no income limit for the Medicare payroll tax. If you are self-employed, you are required to pay both the employee and employer tax for Medicare.
Understand What Creditable Coverage Is
You can sign up for Medicare and a prescription plan without a penalty after your Initial Enrollment Period if you have from another source.
Typically, this means you have insurance from your own or your spouses employer-sponsored plan. Some people delay enrolling in Medicare because they have other insurance thats cheaper or has other advantages. Those advantages wont matter if your plan doesnt count as creditable coverage and you have to pay a late enrollment penalty.
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Who Qualifies For Premium
Most people dont have to pay a monthly premium for their Medicare Part A coverage. If youve worked for a total of 40 quarters or more during your lifetime, youve already paid for your Medicare Part A coverage through those income taxes.
Outside of qualifying for premium-free Part A based on your work history, there are a few other situations when you may receive coverage without a monthly premium:
- Youre 65 years old and receive retirement benefits from Social Security or the Railroad Retirement Board .
- Youre 65 years old and you or your spouse had Medicare-covered health benefits from a government job.
- Youre under age 65 and have received Social Security or RRB disability benefits for 24 months.
What Drugs Are Excluded From Part D Plans
The drugs that are excluded from Part D by Medicare are: Drugs used for anorexia, weight loss, or weight gain Drugs used to promote fertility Drugs used for cosmetic purposes or hair growth Drugs used for the symptomatic relief of cough and colds Prescription vitamins and mineral products, except prenatal vitamins and fluoride preparations Non-prescription drugs Inpatient drugs Barbiturates – except when used to treat epilepsy, cancer, or a chronic mental health disorder In addition, a drug cannot be covered under a Part D plan if payment for that drug is available under Part A or B of Medicare, such as drugs administered in a hospital or a physician’s office. Also, each Part D prescription drug plan may have its own specific exclusions.
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Exemption From Social Security Or Medicare Taxes
Under certain circumstances, New York City employees may be exempt from Social Security and/or Medicare taxes. If you fall into one of the following categories, you may be exempt from Social Security or Medicare taxes:
- Not a pension member and contribute at least 7.5% or more to a single defined contribution plan, such as the Deferred Compensation 401 or 457 plans, or a 403 Tax Deferred Annuity . Get more information about Social Security & Medicare Tax Exemptions for Non-Members of Pension Plans.
- City pension plan member in 1957 electing not to have Social Security
- Half time CUNY student working at CUNY
- Non-resident student or teacher admitted to the US under certain visas
- Foster Grandparent working for the Department of Aging
- Election Inspector/Worker earning less than $2,000 from the Board of Elections in 2021
- Beneficiary of a deceased employee receiving payment after the calendar year of the employees death
- Temporary emergency relief employee.
Learn more about Social Security & Medicare Tax Exemptions for Other NYC Employees.
The Social Security Protection Act of 2004 requires newly hired public employees to sign a Statement Concerning Your Employment in a Job Not Covered by Social Security. Form SSA-1495 explains the potential effects of two provisions in the Social Security law on workers whose earnings are not covered under Social Security.
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Can I Use My Hsa Funds To Pay My Medicare Premiums
If you have money in a health savings account, you can use it to pay your Part B, Part D, or Medicare Advantage premiums. You cannot use an HSA to pay Medigap premiums.
The money in your HSA is tax-free as long as you use it for medical charges. Its always cheaper to pay for things with pre-tax funds than to use taxed money.
How Is Medicare Funded
The Centers for Medicare & Medicaid Services is the federal agency that runs the Medicare Program. CMS is a branch of the
. CMS also monitors
programs offered by each state.
In 2017, Medicare covered over 58 million people. Total expenditures in 2017 were $705.9 billion. This money comes from the Medicare Trust Funds.
What Factors Can Affect My Medicare Part B Premium
Most people actually pay less than the standard Medicare Part B premium amount, which is determined by the federal government each year. In 2021, the standard Medicare Part B premium is $148.50. You might pay more if you have a high income. See details below.
The standard premium also may apply to you if get both Medicare and Medicaid benefits, but your state may pay the standard Medicare Part B premium if you qualify.
If you delayed enrollment in Part B, you might have to pay a late-enrollment penalty along with your monthly premium- see below.
If your income is above a certain amount, you may be subject to the Income Related Monthly Adjustment Amount . See the table below.
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What About Part C Part D And Medigap
You pay these bills directly to your plan provider. Each company may have a preferred method of payment.
Your insurer will let you know all your options for paying your bill. These may include:
- autopay, which automatically deducts the amount from your checking or savings account on a specific date each month
- paying by check
- paying by debit or credit card, either online or by mail
Original Medicare And Part D Irmaa
If you receive a Medicare bill for Part B premium and Part D IRMAA costs, you may pay it in these ways:
- Medicares Easy Pay system lets you pay your Part A or Part B premium electronically. You can pay manually or set up automatic payments to be taken directly from a checking or savings account.
- You can pay with a debit card or credit card by writing your card number directly on your bill and mailing it in.
- You can pay with a check or money order.
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Deductions Guarantee Payment And Coverage
The Social Security Administration offers Medicare deduction as a service to retirees.
Social Security income is vital to many older Americans. It can be a source of security for healthcare, too.
When Part A and Part B premiums deduct from Social Security payments, it alleviates the crucial issue of missed payments.
If preferable to pay from a savings or checking account, Medicare Easy Pay is a free service to help make payments easy and regular. When selected, Easy Pay can also deduct premiums for a Part D policy or Part C Medicare Advantage plan.
Comparison shopping is a great way to select a plan from the Medicare Advantage program in order to get a true picture of costs and benefits.
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There Are Two Types Of Plans
Plans come in two basic types. The most simple is a prescription drug plan , which covers only drugs and can be used with your traditional Medicare and/or a Medicare supplement plan. The other type combines a prescription drug plan with a Medicare Advantage plan and includes medical coverage for doctor visits and hospital expenses. This kind of plan is called Medicare Advantage plus Prescription Drug, or MA-PD.
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What You Need to KnowMedicare beneficiaries still face a coverage gap for…
Updated: October 10th, 2021ByKate Ashford×
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Can Medicare Part D Be Deducted From Social Security
Even though you get Medicare Part D prescription drug coverage from a stand-alone drug plan or through a Medicare Advantage plan, not Original Medicare, you can still have the drug plans premium withheld from your Social Security payment. This deduction is called premium withhold.
Most Part D drug plans charge a monthly premium, though this varies by plan and can change from year to year. You must pay this premium in addition to your Part B monthly premium every month.
Even though you can ask for your drug plans premium to be withheld, it may work differently in different situations, and there are a few important things to keep in mind.
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