Part B – A Supplement or a Necessity?
Jun 22, 2016
Medicare Part B confuses some Medicare beneficiaries. They think it's a supplement and, if they have it, they don’t need any other coverage or, because it’s a supplement, they can skip it.
The founders of Medicare deserve some credit for this confusion. The first two parts of Medicare were Part A, hospital insurance (HI), and Part B, supplementary medical insurance (SMI). Part B provided benefits, such as doctors’ visits, that supplemented hospital insurance. Over time, the SMI label has faded, especially since the introduction of Medicare supplement insurance in 1980. More commonly known as Medigap, Medicare supplement insurance help pay the costs that Part A and Part B (now known as medical insurance) don’t cover.
It’s important to realize that Part B is core component of Medicare, not a supplement. Without Part B, there would be no coverage for outpatient services, those that are necessary to diagnose and treat a medical condition. These include doctors’ visits, diagnostic tests, equipment, and outpatient surgery surgery, therapy and other care. Part B also covers many preventive services, often with little or no copayment.
The question then becomes: If you’re enrolled in Part A and Part B, do you need any other coverage? If you want to stay away from debt collectors, the answer is a definite "Yes." This additional coverage would either be a Medigap policy and Part D drug plan or a Medicare Advantage plan with prescription drug coverage.
Here’s why. You could live your entire life with just Part A and Part B but, if you become ill or are injured, the out-of-pocket costs associated with Parts A and B could force bankruptcy. For instance, the hospitalization deductible is $1,340 per-benefit period. (Read more at https://www.65incorporated.com/topics/original-medicare/what-should-i-know-about-benefit-periods-original-medicare/.) That means you could be on the hook for that deductible one, two, or more times in a calendar year. Every time you see a physician, have an x-ray, or use an outpatient service, you face a 20% coinsurance (after meeting the $183 Part B deductible).
Consider the example of LeRoy. At age 65, he enrolled in Part A and Part B only. He couldn’t see spending additional hard-earned cash on a supplement. At the age of 75, he injured his leg and then developed a bone infection that led to an amputation. He spent 30 days in a skilled nursing facility, getting IV antibiotics four times a day. Along with the hospitalization deductible and Part B charges for doctors, he had to pay a $167.50 a day copayment for the last 10 days of the SNF stay and a 20% coinsurance on the antibiotic therapy. Besides that, his choice of facilities was extremely limited because he had no insurance to cover the out-of-pocket costs. His wife finally found one that would accept her credit card.
When getting ready to travel the Medicare road, start with the core components, Part A and Part B. Then, study the paths and pick the option that will work best for you.
Learn about Part B at https://www.65incorporated.com/topics/about-medicare-basics/what-medicare-part-b/.