Part B Premiums: A Medicare Customer Question

What You Need to Know

How plans handle the Part B costs varies.
The free coverage is usually not actually free.
It does cost a little less this year than last year.

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.