Whether or not you need or should start Medicare Part B when you turn 65 depends on your situation. Medicare Part B is a requirement for some plans, and you could face penalties for not picking it up in the correct timeframe.
What Do I Need to Know about Medicare Part B?
Medicare Part B covers your outpatient medical services, like your annual wellness exam. On average, it pays up to 80% of these costs, which prevents you from having to pay the majority of your bill out-of-pocket.Medicare Part A and Part B together are referred to as Original Medicare. The typical Medicare Part B premium in 2020 is $144.60.
Most people gain Medicare Part B eligibility on the first day of the month in which they turn 65. For instance, if your birthday is March 17th, you’d be eligible for Medicare on March 1st. You have seven months in which to apply, beginning three months before your birth month, and ending three months after. If you’re drawing Social Security, you’ll be automatically enrolled. You can sign up for or postpone your Part B by contacting the Social Security Administration directly.
When Do You Need Medicare Part B?
Medicare Part B isn’t a legal requirement, and you don’t need it in some situations. In general, if you’re eligible for Medicare and have creditable coverage, you can postpone Part B penalty-free. Creditable coverage includes the insurance provided to you or your spouse through work.
Scenarios in which you can’t delay Part B without facing penalties include:
- You only have VA coverage
- Your place of employment consists of less than 20 employees
- You are part of a cost-sharing program, rather than traditional health insurance
- Medicare Advantage plans
- TRICARE for Life
- Medicare Supplement plans*
*You don’t technically need Medicare Part B to enroll in a Medicare Supplement plan, however without it, your supplement won’t cover any of your outpatient costs. Ultimately, it’s not likely to be cost-efficient to have a Medicare Supplement plan without Medicare Part B, and it isn’t recommended.
What is the Part B Late Enrollment Penalty?
For every 12 months that you should have been enrolled and weren’t, you’ll pay a 10% penalty fee on top of your regular payment. If you pay the average Part B Premium in 2020, but signed up one year late, instead of paying $144.60 a month, you’d be paying $159.06.
In addition to a financial penalty, you also won’t be able to simply start coverage when you want to. You’ll have to wait until the General Enrollment Period to apply for Part B, which runs from January 1st – March 31st, and the coverage won’t come into effect until July 1st.
Why Should I Delay My Part B if I Have Creditable Coverage?
When you start Part B, it triggers a special election period that allows you to make changes to your coverage outside of the usual enrollment periods.
The changes you can make when you start Part B include:
If this period ends while you’re still on your employer insurance, for instance, you could have a more difficult transition onto Medicare. These are very important rights that ensure you don’t have any gaps in your coverage.
Whether you’re about to enter Medicare, or you’re choosing another form of coverage, it’s essential that you plan wisely. Starting Medicare Part B at the right time can help ensure that you have strong health coverage at the lowest cost to you.
Nothing on this website should ever be used as a substitute for professional medical advice. You should always consult with your medical provider regarding diagnosis or treatment for a health condition, including decisions about the correct medication for your condition, as well as prior to undertaking any specific exercise or dietary routine.