Medicare Parts A & B
Original Medicare is composed of two parts: Part A and Part B (known as Original Medicare). Part A is funded in full from the Medicare taxes you paid while working (or from the Medicare taxes a spouse paid). While Part B is partially paid from taxes, it is supplemented with a Part B premium. Medicare Part B enrollees with higher incomes could pay a higher Part B premium depending upon the extent their income from two years prior exceeds $85,000 ($170,000 for married couples). This is called the Income Related Monthly Adjustment Amount (IRMAA). Please click here for the 2018 IRMAA income chart.
Upon turning 65, one must enroll in Medicare Part A, but Part B is optional. Some people may have other insurance coverage that will continue to be their primary coverage (e.g., certain company group plans or retiree plans). In these cases, it is not always necessary or prudent to enroll in Part B. Review your options carefully as there are penalties for not enrolling in Part B when you become eligible and are without other qualified primary coverage.
Be sure your doctor accepts Medicare (also known as the Medicare Assignment). As long as your provider accepts Medicare, you will pay just the 20% coinsurance for the specified Part B services. If the provider agrees to see Medicare patients but doesn't accept the Medicare Assignment, they can charge up to 15% more than the Medicare reimbursement rate. If you choose to see this provider, you will be responsible for paying the 15% in addition to the 20% coinsurance amount. Medicare Supplements (also called MediGap) may cover some or all of these gaps.