Part B Premiums: A Medicare Customer Question
One of the most confusing Medicare concerns is one of the most common Medicare concerns.
During this Medicare Advantage enrollment period, which stretches from Jan. 1 to March 31, beneficiaries have many options.
They can enroll in a new Medicare Advantage program, revert to their old one, keep the one they have, or swap out for a traditional Medicare plan.
One area of confusion is how a Medicare Advantage plan may coordinate with the Medicare Part B premium that is required for beneficiaries. The lack of clarity around Medicare Advantage and Part B coverage can leave beneficiaries confused about their premiums once they enroll.
Frequent questions include, “Is Part B part of the plan I selected?” and “Why must I pay for Part B when I enrolled in a premium-free Medicare Advantage plan?”
It’s imperative for agents to understand this crucial facet of Medicare Advantage plans, and explain in some detail how it could affect their clients as they mull their options.
The Question
What should a financial professional tell clients about paying Part B premiums with Medicare Advantage coverage?
The Answer
Medicare Part B, which is the second part of traditional Medicare, covers outpatient visits including doctors’ appointments and specified home health and hospital services.
It also provides for durable medical devices and other services not covered by Medicare Part A.
Part B coverage is included in Medicare Advantage, which are plans offered by private insurers who contract with the federal government.
Many people opt for Medicare Advantage instead of traditional Medicare because it offers a network of preferred providers, hospitals and pharmacies; and all benefits are tied to a single plan.
It also includes Medicare Part A and can include prescription drug coverage.
About half of Medicare-eligible Americans choose Medicare Advantage plans, or MA plans, according to reports — with estimates ranging from 27 million to 32 million Medicare Advantage enrollees.
That’s well up from 19% in 2007, according to a Kaiser Family Foundation analysis published in August, and the rate has increased every year since 2007.
Part B is not a free service that comes with MA plans; it usually incurs a regular monthly cost.
This year’s Part B monthly premium costs $164.90 for typical MA plan beneficiaries, and it’s higher for those earning higher incomes.
(For a rundown of how much Part B costs based on income, consult the charts here.)
Yes, there are MA plans that advertise that they do not charge any regular premiums.
But many of these “free-mium” plans still charge for Part B.
The Centers for Medicare and Medicaid Services lowered the monthly Part B premium cost, to $164.90 this year, from $170.10 last year.
This is largely due to enhanced Part B reserves, after premiums increased by $21.60 monthly last year to meet expected high spending on a new Alzheimer’s drug that did not fully materialize.
CMS officials decided in May 2022 to pass these excess reserves on to Medicare Part B beneficiaries.
The Part B deductible costs $226 for the year 2023, down from $233 last year.
Eligible Americans had an average 39 Medicare Advantage plans to pick from in the fall, so many will likely have questions as they explore options during this enrollment period.
Once they pick their plan, they typically must continue with it for the rest of the year.
So make sure you understand how Part B applies to MA plans and are prepared to explain details to clients.
As they search for the best Medicare plan for themselves or their family members, this understanding can help give them every possible advantage.
..
..
..
..
(Image: CMS)