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THE VALUE OF MEDICARE PART B

Healthcare information is often complex, and knowing what choice to make when you become eligible for Medicare can be difficult. This article will discuss the advantages and disadvantages of enrolling in Medicare Part B.

You should enroll in Medicare Parts A and B as soon as you are eligible to help you avoid late penalties that may apply should you later decide to enroll. If you are enrolled in Medicare Parts A and B, most coverage will be coordinated with your LACERA-administered health plan. If you have 40 qualified work quarters during which Medicare Health Insurance Tax (HIT) was paid, there are no premiums for Medicare Part A. For additional information, contact the Social Security Administration (SSA) at www.socialsecurity.gov, or 800-772-1213. You will automatically be enrolled in Medicare Parts A and B when you enroll in Medicare, but you may elect to decline Part B. In making an informed choice, you should know the advantages and disadvantages of enrolling or not enrolling in Medicare Part B.

Medicare Part A covers hospital services; Part B covers outpatient and professional services, such as doctor visits, X-ray and lab services, ambulance services, physical and speech therapy, durable medical equipment (i.e., oxygen, wheelchairs, and walkers), and some preventive care, which are coordinated with most of the LACERA-administered health plans.

Medicare Part B Premium Structure

Effective January 1, 2007, Part B premiums are income-based, subject to your prior two years of income tax filings with the Internal Revenue Service (IRS). You can choose whether or not to enroll in Part B; however, if you do enroll in Part B and in one of the LACERA-administered Medicare plans — Anthem Blue Cross Plan III, Kaiser Senior Advantage, United Healthcare Medicare Advantage, SCAN, or Cigna-HealthSpring Preferred with Rx (available in Maricopa County and Apache Junction, Pinal County, AZ) — your Part B premium standard rate will be reimbursed by the County (subject to annual review by the Board of Supervisors).

View the County Reimbursement Schedule for Medicare Part B Premiums.

Advantages of Enrollment in Medicare Part B

If you are enrolled in Medicare Parts A and B, and a LACERA-administered Non-Medicare plan:

  • Suppose you have Part B and are enrolled in LACERA-administered Anthem Blue Cross Prudent Buyer or Anthem Blue Cross I, II Plan; Medicare and Anthem Blue Cross will coordinate coverage for services. That means when you visit your doctor, once you’ve met your deductible, Medicare Part B will pay 80 percent of eligible services, and Anthem Blue Cross will pay a portion of the remaining balance of eligible services, according to each plan design. That leaves you with a small out-of-pocket expense. Over time, Medicare Part B may help reduce your overall healthcare spending, depending how often you use the covered services.
  • You are subject to the Lifetime Benefit Maximum of one million dollars’ coverage for Anthem Blue Cross Plans I, II, and Prudent Buyer Plan, alone or combined. “Combined” means any benefits paid under a prior LACERA-administered Anthem Blue Cross plan will reduce any maximum amounts eligible for the current Anthem Blue Cross plan. With Part B coverage paying most of your eligible medical services, it will help you reach your Maximum Lifetime Benefit at a slower pace.
  • If you have a LACERA-administered Non-Medicare HMO plan, you agree to receive covered services from the plan; and in most situations, there is no coordination of coverage between your Medicare and the LACERA-administered HMO plan.

If you are enrolled in Medicare Parts A and B, and a LACERA-administered Medicare plan:

  • Suppose you have both Medicare Part B and Anthem Blue Cross III Plan; Medicare and Anthem Blue Cross will coordinate coverage for services. That means when you visit your doctor, Medicare Part B will pay 80 percent of eligible services, and the Anthem Blue Cross III Plan will pick up the remaining 20 percent of eligible services. That leaves little or nothing for you to pay out of pocket. Over time, Medicare Part B may help reduce your overall healthcare spending. In addition, you are not subject to the Lifetime Benefit Maximum of one million dollars that applies to the other Anthem Blue Cross plans.
  • If you have a LACERA-administered Medicare Advantage Prescription Drug Plan (MA-PD) such as Kaiser Senior Advantage, you assign Medicare Parts A, B, and D to your medical plan and must receive all covered services directly from the plan.

View the County Reimbursement Schedule for Medicare Part B Premiums.

Disadvantages of NOT Enrolling in Medicare Part B

Applies only if you are covered for Medicare Part A but not enrolled in Medicare Part B and have a LACERA-administered medical plan:

  • If you decide not to purchase Medicare Part B when you become eligible, your plan will not coordinate coverage for Medicare Part B services. That means you’ll continue to pay for those services and equipment as you did before you become eligible for Medicare. For example, under the Anthem Blue Cross Plan II, a doctor’s office visit will be covered at 80 percent after your deductible. You would be responsible for the remaining 20 percent.
  • Without Medicare Part B, you would continue to incur these costs until you hit your out-of-pocket maximum on Anthem Blue Cross Plan II ($2,500 per calendar year, including deductible). If you have Anthem Blue Cross Plan I or Prudent Buyer Plan, you will continue to incur the costs into the future because there is no out-of-pocket maximum.
  • You are subject to the one million dollar Lifetime Maximum coverage for the Anthem Blue Cross Plans I, II, and Prudent Buyer Plan, alone or combined. “Combined” means any benefits paid under a prior LACERA-administered Anthem Blue Cross plan will reduce any maximum amounts eligible for the current Anthem Blue Cross plan.
  • Without Medicare Part B, you are ineligible to enroll in a LACERA-administered Medicare plan. Thus, you are disqualified from participating in the County’s Medicare Part B Premium Reimbursement Program.
  • If you are eligible but are not enrolled in Medicare Part B and have a LACERA-administered HMO plan, you may pay a higher premium.
  • Finally, if you decide not to enroll in Medicare Part B when you become eligible at age 65, and later decide to enroll, you will be charged a penalty of 10 percent for each year you were eligible and chose to decline coverage. If you are a late enrollee in Medicare Part B and pick one of the plans eligible for reimbursement, the County will not reimburse the penalty portion of the Part B premium.

Ultimately, the decision is yours. Consider enrolling in Medicare Part B as soon as you are eligible to avoid penalties for late enrollment. Enrolling in Medicare Parts A and B and a LACERA-administered Medicare plan will qualify you for the County’s Medicare Part B Premium Reimbursement Program and coordination of benefits with Medicare, providing the following conditions are met:

  • You are paying for your Medicare Part B premium yourself.
  • You are not being reimbursed for your Medicare Part B Premium by another agency (for example: other employer, State).

NOTE: Some benefit information mentioned above may be subject to future changes.

9/14/15