Medicare
Image: Medicare.gov.

Retirees rely on Medicare to help them with their healthcare expenses, but getting a better understanding of how the program's different components can be challenging. Medicare Part B plays a key role in the everyday aspects of healthcare, and below, you'll learn more of the specifics of how much Part B costs and what it covers.

What Medicare Part B costs
Medicare participants pay a monthly premium to get Part B coverage, but one of the more confusing things about the program in 2016 is that different participants pay different amounts. The standard charge for most new participants this year is $121.80 per month. But because of a law that ties Medicare increases to cost-of-living adjustments for Social Security, the majority of existing participants will pay the $104.90 monthly premium they paid in 2015.

Medicare Part B is partially means-tested, meaning that those with high income levels pay higher premiums. Depending on your 2014 income, premiums can go as high as $389.80, as the chart below shows.

Medicare Part B High Income
Source: Medicare.gov.

In addition to premium payments, you'll also have to pay deductibles and coinsurance amounts. The deductible for Part B is $166 per year, which you pay out of pocket before coverage kicks in. After that, you'll usually pay 20% of whatever amount Medicare approves for most of the services Part B covers. For certain preventive services, Part B takes care of all of the related expenses, leaving you with no out-of-pocket payment at all.

What Medicare Part B covers
Medicare Part B covers services and supplies considered medically necessary to treat a disease or condition. That includes both things that you need to diagnose or treat a condition and services necessary to prevent illness entirely or detect it at an early stage. In practical terms, most participants use Medicare Part B to pay for doctor visits and medical diagnostic tests as part of their ordinary treatment. Yet a number of other items are covered, including ambulance services, clinical research, durable medical equipment, second opinions before a surgical procedure, and mental-health services.

New participants are also covered for a one-time "Welcome to Medicare" preventive visit. This service includes a review of your medical history, as well as height, weight, and blood pressure measurements and a calculation of your body mass index. You also get a vision test, a review of risk for depression, and a written plan covering needed screenings, shots, and other preventive services as part of this visit. Subsequently, yearly wellness visits provide updated information to assess your health.

There are some things that Part B specifically does not cover. Dentures and most dental care aren't covered under Medicare, and you can't get coverage for eye examinations related to prescribing glasses or contact lenses or for examinations to provide hearing aids.

Given the wide variety of tests, medical devices, and other services that medical professionals can provide, it's important to know whether Medicare Part B will cover them. The Medicare website provides a tool to determine if a particular item, test, or service is included. However, your doctor or other professional should be able to tell you whether Medicare will pay for whatever treatment they're recommending.

Medicare Part B provides essential coverage for retirees, and what participants pay for the program gets them access to a wide array of necessary medical services. Part B doesn't cover everything, and its costs can be difficult for cash-strapped participants to cover. But it does give many who would otherwise have no coverage a baseline set of benefits they can use to stay healthy throughout their golden years.

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