What is Medicare Part B?
Even more than Social Security, Medicare is one of the most controversial social welfare programs of the U.S. government. At $256.8 billion in fiscal year 2002, it's expenditures routinely exceed projections, and are growing, in percent and absolute terms, faster than the federal budget. A 2008 report concluded the entire program would be insolvent by 2019. And yet, the benefits provided under Medicare remain one of the few lifelines available to many of America's senior citizens.
Function
Medicare Part B was part of the original Medicare program signed into law by Lyndon Johnson, which has been expanded continually, most notably in 2003. The purpose of Part B was to cover expenses not included under Part A, which focused on health care administered in a hospital. Part B was used to cover outpatient care, other care from physicians and nurses, and medical equipment like walkers and oxygen for home use. Part B also covers some preventive services like exams, lab tests and diabetes self management training.
Features
Medicare Part B coverage is optional. Like other insurance coverage, it costs the beneficiary a regular premium and copayments, though these can usually be deducted from Social Security benefits or waived altogether in some special cases. The cost to the beneficiary of Medicare Part B depends on their annual income: in 2007, the standard monthly Part B premium was $93.50, but any senior with an annual income more than $80,000 likely paid more. Additionally, there may be other costs associated with failing to register within three months of the 65th birthday.
Benefits
Under Medicaid Part B, 80 percent of covered services are reimbursed to the private insurer by the federal government, leaving the difference as an out-of-pocket expense of the beneficiary. Even with the premiums and copayments, Medicare has substantially reduced the cost and increased access to health care for seniors.
Significance
Medicare Part B can, in some cases, actually limit the amount a physician can bill for services. Medicaid's 80 percent reimbursement is not based on the doctor's bill, but on a pre-determined "reasonable charge." If the doctor bills higher than this reasonable charge, the Medicare reimbursement will be less than 80 percent, and the expense to the beneficiary higher. The law prohibits, however, doctor's from billing more than 115 percent of the reasonable charge, thereby capping the cost to the beneficiary for individual services.
Considerations
Even though Medicare Part B coverage is regulated by an agency of the federal government, the individual plans are designed and administered by private health insurance companies. As a result, the details of each plan can vary significantly, and it's up to the consumer to shop around for the plan that best meets their needs.
Tags: Medicare Part, more than, reasonable charge, annual income, cost beneficiary, expense beneficiary, federal government
