Medicare Part B Simplified

Simply put, the second part of Original Medicare is medical insurance. In this article we’ll review everything you need to know about Part B — coverage, eligibility, enrollment, and costs.

Medicare Part B covers what a doctor considers “reasonable and necessary.” But where Medicare doesn’t see medical necessity, it can just be a matter of additional documentation to make the case. The good news is that approximately 95% of all claims are paid.

Hospital expenses covered by Part A do not come under the responsibility of Part B. Nor do routine dental, vision or hearing, or routine foot care and cosmetic procedures.

Coverage

Services from doctors and other health care providers
Outpatient care
Limited outpatient drugs
Home health care
Preventive services such as colonoscopies, mammograms, and flu shots
Mental health, both outpatient and inpatient
Ambulance services
Durable medical equipment (wheelchairs, walkers, beds, etc.)
Getting a second opinion pre-surgery

Part B is especially valuable for serious hospital expenses like surgeries, radiation or chemotherapy, diagnostic imaging such as MRIs, and dialysis for failing kidneys. It will also pay for drugs required in an inpatient setting, such as infused medications, antigens, and insulin used with an insulin pump. For outpatient drugs, coverage is provided by Part D.

A helpful feature of Part B is its coverage for preventive services including an annual “Welcome to Medicare” preventive visit, cardiovascular screenings, cancer and diabetes screenings, as well as flu and hepatitis B shots. Please go to www.medicare.gov/pub/medicare-you-handbook to see a complete list of preventive services.

How Does Part B Eligibility Work?

Medicare Part B is yours automatically if you are under 65 and getting Social Security or Railroad Retirement Board (RRB) benefits — expect your card to arrive 1-2 months before you turn 65.

If you are under 65 and have a disability, Part A and B automatically activate after 24 months of receiving disability benefits from SS or RRB.

It’s important to keep in mind that if you’re close to 65 and not getting SS or RRB benefits, you must sign up for Medicare. You must enroll 3 months before your 65th birthday and you can do it online, over the phone, or just by walking into your local Social Security office. You’ll get your card within 2 to 3 weeks, perhaps just in time for coverage you need.

The other ways you can qualify for Medicare before 65 are:

Of course, you need to be a U.S. citizen or an alien with lawful residency who has lived here for 5 continuous years prior to the month of applying for Medicare.

When Do I Need to Enroll?

Your enrollment window is during the critical Initial Enrollment Period (IEP), the 7-month time beginning 3 months before your 65th birthday, including your birthday month, and ending 3 months after you turn 65.

After your IEP ends, a Special Enrollment Period (SEP) allows you to sign up if you missed your first chance because you, a spouse, or family member had coverage through an employer or union-sponsored group health plan.

You can sign up for Part A or B:

Signing up during the Special Enrollment Period means you can avoid a late enrollment penalty. If you are an end-stage-renal disease patient, the SEP doesn’t apply to you. Keep in mind that both retiree coverage and COBRA don’t qualify as health coverage based on current employment and disallow you for a SEP. And make sure not to wait until your COBRA coverage ends to sign up for Part B; your 8-month SEP begins immediately after your current employment or group plan ends (whichever comes first).

If you failed to sign up for Medicare when you were first eligible, and you didn’t have any creditable coverage, you may be subject to the Medicare Part B late enrollment penalty. This penalty is equal to 10% per year for every year (12 full months) that you waited to enroll. This penalty gets applied against the standard Part B premium, which in 2023 will be $164.90.

When you do finally enroll, you’ll need to wait for the Medicare General Enrollment Period to sign up for Part B. This period runs from January 1st to March 31st each year. Your benefits will then begin the following July. This can be a double whammy because not only do you now owe a penalty, but you have to wait several months for your coverage to kick in.

If you enrolled late because you’ve had employer group health coverage from a company with 20 or more employees, you will not be subject to the Medicare Part B late enrollment penalty. When you leave that coverage, you have 8 months to sign up for Part B. This is called your Special Enrollment Period for Medicare.

The best way to avoid the Medicare Part B late enrollment penalty is to enroll in Medicare during your Initial Enrollment Period. You can learn more about Medicare enrollment periods here.

Helpful Enrollment Tips

A key fact to have at your fingertips is that your 6-month Medigap Open Enrollment Period begins as soon as you’re both 65 and have Medicare Part B. This is when you have a “guaranteed issue right” to buy any Medigap (private Medicare Supplement insurance) plan without the need for medical underwriting or having to pay a higher premium for a pre-existing condition.

Take special note that Medicare Supplement Insurance can make a huge difference when you need services such as surgery or chemotherapy, which can end up costing tens of thousands of dollars. It can cover the 20% Part B doesn’t pay just when you need it most.

Also, if you don’t sign up for Part B when you’re first eligible, you may have to pay a late enrollment penalty for as long as you have Part B. This could mean your monthly premium could go up 10% for every year you’ve had Part B.

What is Part B Going to Cost Me?

For 2023, 95% of people with Medicare Part B are paying a reasonable premium of $164.90, but your premium will rise with your income. See our cost chart.

Your basic costs are:

There’s one expense you can avoid — the late enrollment penalty. It’s worthwhile to start “thinking Medicare” coming up to your 65th birthday so you’ll remember to sign up the moment you’re eligible. This way you won’t have to pay an additional 10% of your premium for each 12-month period that you could have had Part B — for as long as you have Part B!

To get an idea what this means, consider Ms. Adams, whose Initial Enrollment Period ended December 31st, 2016. She didn’t sign up until the General Enrollment Period (January 1st-March 31st) in 2023 and ended up paying 20% on top of her premium since she was 2 whole years late, and had to pay that amount every year thereafter.

Of all your costs, the most significant is the 20% owed for outpatient medical care. For services like surgeries or chemotherapy, your expenses can add up to tens of thousands of dollars. There’s no reason to get hit with these expenses when there are supplemental coverage options available for any budget.

Making Part B payments is easy if you are already enrolled in your SS income benefits: Medicare will take your premiums straight out of your Social Security check. Or, you can get a quarterly bill with a credit card option. Additionally, you have Medicare Easy Pay, a free autodraft service that will deduct your premium payments monthly from a checking or savings account.

Still confused? Call us!

We’re here at 833-245-0614 to answer any questions, and ready to help with any issues you might have with an insurer through the enrollment process.

FAQs

Are prescription drugs covered under Part B?

No, you will need to get a Part D plan for outpatient drugs.

I’m near my 65th birthday and am not yet getting Social Security benefits. Am I eligible for Part B?

You’re eligible, but need to sign up. Make sure to enroll 3 months before your 65th birthday. You can do it online, over the phone, or just by walking into your local Social Security office.