Glossary
Medicare Part B, defined
The medical side of the federal health program, covering doctor visits, outpatient care, preventive services, durable equipment and most of what happens outside a hospital admission. It carries a monthly premium, an annual deductible and a coinsurance share on approved charges, with no cap on what that share can add up to in a year.
In practice
The premium is income-related, so higher earners pay more, and it is usually deducted from the Social Security payment. Enrolling late without other creditable coverage brings a permanent premium surcharge, which is why people still working past the eligibility age should check how their employer plan coordinates before declining. The absence of an annual out-of-pocket ceiling is the main reason people add a supplement policy or choose an Advantage plan, both of which put a limit on the coinsurance exposure. Providers who accept assignment agree to the approved amount; a provider who does not can bill a limited excess charge, which only some supplement letters cover.
A worked example
Suppose a retiree has chemotherapy in a hospital outpatient department with $60,000 of approved charges in a year, and her coinsurance share of that comes to $12,000, with nothing to cap it. With a supplement letter that pays the coinsurance, she owes nothing beyond the premium; with an Advantage plan, she pays up to its out-of-pocket maximum, say $5,000. Hypothetical figures.
Applies to: Medicare