Do I need Part B?
It’s a reliable fact of life that you’ll need more medical care as you age. That creaky joint may turn into full-blown arthritis, or worse, that ache in your side could be a cancerous condition. Chronic or acute, issues needing a doctor’s or surgeon’s services will be costly. You want to have coverage when the time comes.
In that light, it’s a no-brainer that you should enroll in Medicare Part B. This article will take a thorough look at the Part B piece of Original Medicare so you’ll know what you’re getting, how to get it, and what it costs.
What exactly is “Original Medicare”?
Original, or Traditional Medicare is the federally run fee-for-service program which helps directly pay your medical costs. It breaks down into Part A and Part B. Part A covers inpatient hospital care, and Part B covers:
Specifically, it covers 80% of costs to providers who accept Medicare.
When do I need Part B?
Not everyone needs Part B at the Medicare target age of 65. Some are still working and have primary health care from their employer or union. Some are on their spouse’s work-sponsored plan. But if you are retired, Part B becomes your primary coverage. And as your situation in life changes, you may not just need Part B, but be required to have it.
Here are a few of the conditions that require you to have Part B:
Without Part B, 80% of all outpatient costs are your responsibility. Perhaps more seriously, whatever secondary coverage you have may not be accepted if you haven’t signed up for Part B. One advantage of having both health care plans is that Medicare can coordinate with large employer coverage to reduce your spending.
Realize you will have to enroll in Part B even if you’ve put it off while still working. The good news is that there’s an 8-month Special Enrollment Period that begins the month after your job ends or your coverage ends (whichever comes first) to enroll in Part B without any late penalty.
Can I enroll in Medigap instead of Part B?
Part A is sometimes confused with Medigap, but it is different. They relate in that Medigap may be secondary to primary Part B for full coverage, and you have to be enrolled in Part B to get Medigap. After providing you medical service, your doctor or medical facility will be paid 80% of your outpatient costs through Part B (after a small deductible), then Medicare will collect the remaining 20% from your private Medigap plan.
Medicare Advantage (Part C) plans require enrollment in both Part A and B for eligibility, and you have to live in the plan’s service area. Medicare is actually doing you a favor with these enrollment requirements. With both primary and secondary coverage, you are getting the most help possible toward paying your medical bills.
What about costs?
95% of people with Medicare Part B are paying a premium of $164.90 in 2023, but your premium will rise with your income. See our cost chart.
The rest of your basic costs are:
If you delay enrolling when you’re eligible, you’ll have to pay an additional 10% of your premium for each 12-month period that you could have had Part B. How this works is that if you delayed two years, you would have to pay a 20% penalty annually for as long as you have Part B. Bottom line, mark your calendar for when your Initial Enrollment Period begins.
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Table of Contents
Original, or Traditional Medicare refers to Part A and Part B, which help cover inpatient and outpatient medical costs.
If you have primary health coverage from an employee or union-sponsored group, you don’t need to sign up for Part B. It’s only when you retire and lose this insurance that you must enroll.
With both you get outstanding coverage. For example, Part B will pick up 80% of the cost of a doctor’s visit and a Medigap plan will pay the remaining 20%.
If you and your spouse earn $194,000 or more a year, you will pay a higher premium.
You’ll have to pay an additional 10% of your premium for each 12-month period that you could have had Part B. For example, if you wait two years to enroll, you’ll have to pay a 20% penalty annually for as long as you have Part B.
- Best overall Medicare supplement for new enrollees: Plan G.
- Best overall Medicare supplement before 2020: Plan F.
- Best low cost Medicare supplement: Plan K.
- Best alternative to Plan G Medicare supplement: Plan N.
Medicare Supplement policies are private health insurance designed to cover gaps in Original Medicare. They are also known as Medigap plans. These take care of costs such as copays, coinsurance, and deductibles which can become expensive if you need regular care from a doctor or hospital. If you need medical care while traveling outside the U.S., you can buy Medigap policies to help cover those costs. As a supplement to Original Medicare, you’re required to have Part A and Part B before you canget a Medigap policy. This way, Medicare is responsible for the Medicare-approved costs of the covered care, and the remainder is covered by your Medigap plan.
Optimal coverage comes with higher costs, making Plan F the most expensive Medigap plan. Plan F is known as “first-dollar coverage” and it takes care of everything provided during a doctor or hospital visit. Your only responsibility is for dental, vision, medications, and equipment, such as hearing aids.
The Federal government ended the Plan F option for new enrollees last year to keep the healthcare system from being overused by patients who had their deductibles covered. The next best coverage after Plan F is Plan G.
Medigap Plan G offers every advantage of Plan F except for the deductible, which you have to cover. Because it isn’t as comprehensive as Plan F, Plan G is more affordable.
For people who don’t go to the doctor often, Plan K is worth considering. It is the most affordable because it provides just 50% of Medicare Part B coinsurance, the Part A deductible, blood, skilled nursing, and Part A hospice costs. For comparison, Plan G and others offer full coverage of these expenses, and more.
It’s hard to argue against plans which cut your traditional Medicare costs. For most people, having the extra coverage these supplemental plans provide is common sense, unless they want the specific features of a Medicare Advantage plan.
Most people would benefit from not having to pay out-of-pocket to stay healthy. Medicare supplement insurance or a Medicare Advantage plan offer vital savings now, but are indispensable should a catastrophic health issue occur.
Of the 10 Medicare-approved Medigap plans, Plan G and Plan N are the most popular. Plan F is no longer available to new Medicare enrollees as of 2020, but it is still popular among people who bought this plan prior to 2020.
- Plan F$128–$342
- Plan F (high deductible)$22–$88
- Plan G$106–$325
- Plan G (high deductible)$29–$58
Before getting a Medicare supplement plan, you need to be enrolled in Medicare Part A (hospital insurance) and Part B (medical insurance). People with Medicare Advantage Plans who want to go back to Original Medicare can buy a Medigap policy prior to switching.
The security of having lower or no out-of-pocket healthcare costs can offset the premiums you’ll have to pay for whichever Medigap plan you choose, which vary depending on the benefits offered.
The national average cost for Medicare Supplement Plan F is $1,824 annually, which is $152/month; Medigap Plan G will cost you around $143 per month.
Since Plan F was discontinued for new enrollees as of 2020, Plan G offers the most coverage for people 65 and older. It has a lower premium than Plan F and duplicates its benefits, except for the Part B deductible.
It depends on your specific needs, but for most people a Medigap plan is very useful in supplementing the coverage of Medicare Part A and Part B. A Medicare Advantage plan is an affordable way to get healthcare coverage not offered by Original Medicare.
Historically, Plan F has been the most popular because it covers all the out-of-pocket costs Medicare does’t pay for. This includes the 15% extra charge billed by providers who do not take Medicare as full payment.