Part B is Outpatient Medical Insurance
Part B is a part of Original Medicare. It covers outpatient medical expenses such as doctor’s visits, preventative care, lab work, X-rays, tests, CAT scans, MRIs, etc. It covers about 80% of most approved outpatient medical expenses after meeting a small deductible.
There are a few things to consider before signing up for Part B. Depending on the situation, you may be need to delay your Part B enrollment. Keeping your group benefits in place because you choose to continue working beyond the age of 65 may be a good idea.
The size of your company’s group and the type of coverage you have effect your options. Going on Medicare for the first time, there are a lot of things to look over. Having all the correct information can save thousands of dollars in premium.
Let’s use Jan as an example to see how Part B works.
Jan loves the outdoors. Spends a lot of her time gardening, taking walks on the trails behind her house. She spends a lot of time with her grandchildren where they enjoy the playground she had built for them.
One chilly morning she steps out on her front porch and ends up slipping on a layer of ice that had accumulated on her steps the night before. A visit to urgent care and knee surgery left her worried about her medical bills.
Thankfully she had a full recovery and with the help of Part B and her secondary Medicare Supplement coverage all of her outpatient services were covered and her out-of-pocket was minimal.
A Few Things About Part B
80% Coverage
After a small deductible, Part B covers about 80% of approved, outpatient, medical services by participating providers that accept Medicare.
The deductible changes slightly every year.
See Medicare’s website to determine what your cost is for this year.
Without some kind of secondary coverage like a Medicare Supplement, the 20% can add up quickly.
Lets say someone ends up having a routine colonoscopy. The only coverage they have is traditional Medicare Parts A and B.
Assuming that Medicare approved the procedure, 20% would be the patient’s responsibility after they have met their Part B Deductible. Without Medigap coverage, they would pay the entire 20% themselves.
According to Healthcarebluebook.com, “..it is not uncommon to find colonoscopy pricing below $1000 or above $3000.” Someone can find themselves owing more than $600 for something very routine.
With the rising costs of healthcare there is no telling what someone would end up owing. Even on something as simple as a routine procedure.
To find out if a provider accepts Original Medicare, simply call their office and ask. There is a surprisingly small amount of providers that do NOT accept Traditional Medicare.
Enrollments
Some are automatic.
At the age of 65 if you are on Social Security you will be automatically enrolled. If you plan to continue working past the age of 65, then you will have the option to delay your Part B enrollment in favor of a credible group plan under an employer.
Remember to send in the appropriate forms if choosing to delay. Usually, these forms come with your Medicare Card so be sure to not throw them away!
You may have to enroll yourself.
When you turn 65, you will not be automatically enrolled in Part B if you are NOT drawing Social Security benefits. If Part B was delayed for any reason, whether you decided to work or continued to have benefits through a spouse, you may need to personally enrolled yourself when the coverage you opted for runs out to avoid any late enrollment penalties. Consider applying for Part B within 60 days from the time your existing coverage is set to expire.
Enroll by:
- Going online to the Social Security website here.
- Walking in to a local Social Security office without an appointment.
- Making an appointment with an agent at a local Social Security office.
- Calling your Social Security office and enroll over the phone (They will send you the necessary paperwork to fill out)
Part B has a monthly premium.
Unlike Part A (for most people), Part B will include a monthly premium that you will need to pay. While the actual amount will differ depending on your income bracket from two years ago.
For example: If coverage is set to start next year you would look at your gross adjusted income for determine what your Part B premium is going to be. If you are married, you would include the income of your spouse as well.
There are programs in place to help you with your Part B premiums. Be sure to check with your state’s Medicaid office to see what kind of programs they have available. Each state has their own specific requirements. Contact them to determine what kind of programs may be available
2018 Part B Price Chart
The chart below outlines how much Part B costs.
| If your yearly income in 2016 (for what you pay in 2018) was | You pay each month (in 2018) | ||
|---|---|---|---|
| File individual tax return | File joint tax return | File married & separate tax return | |
| $85,000 or less | $170,000 or less | $85,000 or less | $135.50 |
| above $85,000 up to $107,000 | above $170,000 up to $214,000 | Not applicable | $189.60 |
| above $107,000 up to $133,500 | above $214,000 up to $267,000 | Not applicable | $270.90 |
| above $133,500 up to $160,000 | above $267,000 up to $320,000 | Not applicable | $352.20 |
| above $160,000 | above $320,000 | above $85,000 | $433.40 |
There may be a penalty if you choose to not enroll or delay your enrollment.
That depends if you have credible coverage at the time you are first eligible. Having no other coverage, or having coverage that may not considered credible, you WILL have a late enrollment penalty.
For every 12 months that Part B is delayed, the penalty will be 10% of the monthly premium added to the standard monthly premium. So, if it is originally $134 and then a penalty is applied, the new premium will higher. The amount will depend on how long the enrollment was delayed. The penalty will stay for as long as you continue to stay on Medicare.
A couple examples:
Delaying Part B with no other coverage:
George, who is 66, is very healthy. He never goes to the doctor and does not take any Medications. Exercises regularly, has great eating habits and has a very active lifestyle. Retiring when he was 60, George, works part time at the local pet store. Being part time, he does not qualify for health insurance. He is did not apply for Part B against the recommendation of his financial advisor.
Whenever George enrolls into Part B, he will be subject to a late enrollment penalty which will add an additional 10% on top of his Part B premium for every year he is without coverage whenever he finally does decide to enroll. If he waits until he is 70, he will pay an extra 50% on top of his regular monthly premium.
Continuing to Work
Frank is turning 65 this year and works for a large automobile company. He decided to delay Social Security and will continue to work until he reached full retirement age at 66. He also postponed his Part B enrollment because the company he works for provides his health benefits and he decided he will continue to keep this coverage until he retires at 66.
Since Frank has credible coverage through his employer, delaying his Part B premium will not only save him money, he will also not have to pay a penalty because he has had continuous, credible, coverage while he continued to work.
Delaying Part B with COBRA
Lisa, like Frank chose to work till retirement age of 66. Before she turned 65 the company decided to downsize and do away with her position forcing her to take an early retirement. Her benefits coordinator said that she is eligible to pay for COBRA and continue her benefits for 18 more months.
Thankfully, Lisa spoke to a licensed agent that advised her to have caution when taking COBRA and delaying her Part B enrollment. Since COBRA is not considered credible coverage, she would be subject to late enrollment penalty. She ended up enrolling into Part B at 65 and choosing a Medigap policy and avoided the frustration of having a penalty.
Credible coverage and why it’s important.
If your employer has 19 or less employees on your group benefits, then that coverage is not seen as credible and you should consider enrolling in Part B during your Initial Enrollment Period in order to avoid a late penalty being added to your monthly premium when you do enroll.
Credible Coverage is coverage that offers comparable benefits to those you would be receiving under Medicare. If you fall into this category of auto-enrollees, then you can expect to receive your insurance cards for Parts A and B in the mail around three months before your 65th birthday.
If you are eligible to remain on your employer plan after turning 65, then you will need to fill out a deferment form and sent it back to your local Social Security office.
Delay Part B in favor of group plans that cover 20 or more employees. Not all employer or union health insurance plans are viewed as credible by the Social Security Administration.
Do not commit to any coverage options without knowing the full scope of the benefits that you have now. Ask your benefits coordinator if your coverage is considered “credible.” They’ll tell you if its a good idea to postpone.
Additionally, if you are retiring at 65 but delaying your Part B enrollment in favor of COBRA there is no COBRA policy that is currently considered to be credible coverage.
Delaying your Part B enrollment in favor this program like this will result in having an indefinite penalty being added to your monthly premium when you finally do enroll in Part B.
There is help around the corner
Turning 65 can mean finding too much Medicare information in your mailbox. Phone calls from strangers who are urging you to buy some plan that you know absolutely nothing about.
Not every person who claims to be an insurance agent will make the effort to explain each element of Medicare.
I want you to feel comfortable with your insurance coverage. I know how overwhelmingly confusing all of this information can be. That is why we are here to help.
Everyone needs proper health insurance, so why delay your Part B enrollment? Unless you are continuing to work past your 65th birthday and are under a group health plan, there is no reason to delay your Part B enrollment.
Unwarranted delays could lead you to have a late penalty fee added to your premium each month. You would actually be paying more for your coverage in the long run.
I have seen firsthand the realities of having gaps in Medicare coverage. My goal to make sure all seniors are informed of their Medicare options, and that they are 100% covered. Life can be unpredictable, but your Medicare does not need to be.