Part B Medicare pays for:

• doctors' services;
• outpatient hospital care;
• lab tests and x-rays;
• medical supplies and equipment;
• ambulance services;
• some preventive care services;
• outpatient physical, speech, and occupational therapy; and
• some home health care (not covered under Part A).

Part B does not include custodial or long-term care. Individuals are responsible for paying an annual deductible of $135 (in 2008).

For 2008

Once the $135 annual deductible is met, benefits are as follows:

Medicare pays 80% of allowable Part B services.

The beneficiary is responsible for paying 20% of the Medicare approved amount, and in some cases an additional 15% that is over what Medicare approves. Some medical and equipment supplier’s charges are not limited by Medicare, and beneficiaries may be billed more than 25% of Medicare’s approved amount. There is no annual cap on the 20% co-payment or other out-of-pocket costs a beneficiary may incur.

The Part B premium is $96.40 per month for most people in 2008, though it may be higher for individuals earning more than $82,000 annually ($164,000 for married couples filing jointly). The premium is automatically deducted monthly from Social Security Disability Insurance (SSDI) and Childhood Disability Beneficiary (CDB) payments. Some beneficiaries may be eligible to have this premium paid through a Medicare Savings Program:

Note: If a beneficiary fails to accept or sign up for Medicare Part B during the initial or a special enrollment period, premiums may be higher. The cost of Part B may be increased up to 10% for each 12-month period that a beneficiary did not have Part B. Beneficiaries will have to pay this extra cost as long as they have Medicare. If an individual is covered through an employer that has 100 or more employees, when they are eligible for Part B they can defer enrollment without penalty until they are no longer covered by the employer’s plan.

There are three times when a beneficiary will be eligible to enroll in Part B Medicare:

1. Initial Enrollment Period (the first six months following the 24^th month of SSDI payments);
2. Special Enrollment Period (eight months following the end of qualified employer coverage); and
3. General Enrollment Period (first three months of each year. Late enrollment penalties may apply).

1. Initial Enrollment Period

The first six months a beneficiary is eligible for Medicare and can choose to enroll in Part B.

• For Social Security Disability Insurance (SSDI) beneficiaries, the initial enrollment period begins the 24^th month of a beneficiary’s Social Security disability payments.
• If a beneficiary chooses not to enroll in Medicare Part B during the initial enrollment period, he or she may be subject to a late enrollment penalty unless covered by a special enrollment period. However, a beneficiary will be eligible for another initial enrollment period upon normal retirement age.

2. Special Enrollment Period

A special enrollment period occurs during the first eight months following the loss of employer coverage as a dependent or employee. To be eligible for a special enrollment period, a beneficiary must have had health coverage from an employer that covered 100 or more employees. Health coverage can be through an employer, association, union or employed spouse. No late enrollment penalty will be applied if the application is made within 8 months of the end of employment.

The special enrollment period also allows a beneficiary to sign up for Medigap without a pre-existing condition waiting period.

Note: Individuals using continuation coverage, such as COBRA or Cal-COBRA, are not entitled to a special enrollment period and should sign up for Part B when COBRA begins.

3. General Enrollment Period

The general enrollment period begins on January 1^st and ends on March 31^st every year. Benefits will not begin until July 1^st of that year. The general enrollment period allows a beneficiary without Part B to sign up for coverage. A beneficiary may be subject to a late enrollment fee of 10% for each 12-month period an individual did not have Part B Medicare.