If you’re eligible for Medicare and are curious as to what plan best meets your individual financial and health needs, you’re not alone. With Medicare divided into four parts, each paying a different portion of healthcare costs, choosing the right plan can sometimes be confusing.
Original Medicare is composed of two parts: Medicare Part A, providing hospital/inpatient coverage, and Medicare Part B which provides doctor visits/outpatient coverage. Medicare Part C is a Medicare Advantage Plan, where plans are provided by private insurance companies approved by Medicare. These plans are required by the federal government to provide all the benefits of Part A and Part B, and some also offer additional services such as dental, prescription medication coverage, and vision services. Medicare Part D offers prescription drug coverage.
What is Medicare Part B and What Does it Cover?
Medicare Part B covers both medically necessary and preventative services.
These can include:
- doctor’s visits
- annual exams
- preventative tests such as mammograms and colonoscopies
- clinical research
- ambulance service
- mental health services
- durable medical equipment such as walkers, diabetic supplies, and more
What Isn’t Covered by Medicare Part B?
While Medicare Part B covers many routine medical services, it doesn’t cover everything, which is why some people choose to also purchase a supplemental Medicare plan.
Some of the services that aren’t covered by Medicare Part B include:
- dental, vision and hearing aids
- prescription medications
- routine foot care
- cosmetic surgery
When Would I Need Medicare Part B?
By signing up for Medicare Part B when you turn 65, you will have comprehensive outpatient insurance. Medicare Part B covers everything from doctor’s visits to medical emergencies where you need to be transported by ambulance to the hospital.
What does Medicare Part B Cost?
For 2020,1 the standard monthly premium for Medicare Part B is $144.60 and the annual deductible for Medicare Part B beneficiaries is $198. If you’re on Social Security, the premium will be deducted from your monthly payment.
Once you meet the annual deductible, you pay 20% of the Medicare-approved cost of the medical treatment or health service. It’s important to make sure your doctor accepts Medicare to avoid paying high out-of-pocket costs for services.
For those with limited income, state Medicare Savings Programs can help to pay for Medicare Part B. To determine if you qualify for help with Medicare premiums and deductibles, call your state to inquire about their Medicare Savings Program. 2
How can I Enroll in Medicare Part B?
The best time to enroll for Medicare Part B is during your Initial Enrollment Period, which usually begins three months before you turn 65 and ends three months after you turn 65. To determine your exact enrollment period, visit medicare.gov/eligibilitypremiumcalc. To apply for Medicare Part A and Part B, call the Social Security Administration at 1-800-772-1213.
You can also enroll for Medicare Parts A and B during the General Enrollment Period (GEP), which runs from January 1 to March 31 of each year. This is for those who rely on Medicare as their primary form of insurance.
If you decide you need Medicare Part B outpatient coverage at a later date, you can still enroll at a later date to receive coverage. But you may face a penalty if you are not transferring from a comparable employer health plan.
What if you Delay Enrolling in Medicare Part B?
If you are signed up to receive Social Security, you will automatically be signed up to receive Medicare parts A and B.
While having Medicare Part B isn’t mandatory, there are penalties if you delay enrollment. To avoid paying a penalty, you must ensure you’re enrolled in what Medicare designates as an employer health plan that offers creditable converge.
Creditable health coverage is a comprehensive employer health plan that pays as well as Medicare. The most common type of creditable coverage is a large employer group plan offered to more than 20 employees.
If you’re still working past the age of 65 and have creditable coverage under your employer’s health plan, or your spouse’s health plan, you can choose to delay Part B enrollment without incurring a penalty.
Medicare Part B Late Enrollment Penalty
However, if you don’t enroll in Medicare Part B when you’re first eligible and don’t have another source of health insurance coverage, you can incur a penalty fee of 10% 3“for each full 12-month period” you neglected to sign up. If the delay is less than 12 full months, a penalty shouldn’t apply. If you do incur a late enrollment penalty fee, you will pay an extra 10% on all Part B premiums every month for the rest of your life.
Who can Delay Enrolling in Medicare Part B Without Facing a Penalty?
If you didn’t initially enroll in Medicare Part B because you had health coverage through your employer or your spouse’s health care plan, you can add Medicare Part B during a Special Enrollment Period (SEP). You can also enroll during a SEP if your plan changes its contract with Medicare, you lose your current employer insurance and other special situations. More information about SEPs and how you can qualify can be found here.4
What if I Want to Enroll in a Medicare Advantage Plan?
Offered by private companies, Medicare Advantage Plans (often called Part C) contract with Medicare to provide Part A and Part B benefits, along with additional coverage for prescription drugs, vision care, and dental.
Medicare Advantage Plans are offered through:
- Health Maintenance Organizations (HMOs)
- Preferred Provider Organizations (PPOs)
- Private Fee-for-Service Plans (PFFS) Plans
- Special Needs Plans (SNPs)
Prices will vary per plan and some will allow you to go out-of-network for specific services. Compare Medicare Advantage Plans at medicare.gov to determine which plan will offer you the options that meet your individual health needs at a price you can afford.
What is the Difference Between Medicare Advantage and Medicare Supplement Plans?
The primary difference between a Medicare Advantage Plan and a Medicare Supplement plan (also known as Medigap policy) is primarily cost, with Medigap policy often having higher premiums.
Many people choose to purchase a Medigap policy in order to pay for healthcare services that aren’t covered in Medicare Parts A and B. These plans also help cover costs such as copayments, deductibles, and health costs when you travel internationally.
Since Medicare Part B only pays 80% of approved healthcare services, you’ll be responsible for paying 20% of the cost of doctor’s visits and routine tests. For those with chronic health conditions such as high blood pressure, arthritis, heart disease, and diabetes, it makes sense to check into a supplemental plan. As of 2019, Medicare Advantage plans were allowed, but not required, to offer nonmedical services such as home-delivered meals, indoor air quality improvement, and transportation for nonmedical needs to enrollees with chronic conditions.
Medigap Policies offers different coverage plans on a state-to-state basis, however, their Plan C is in the process of being phased out. 5Those who became eligible for Medicare on or after January 1, 2020, aren’t able to purchase Medigap Plan C, although those who already have the plan will be able to keep it and continue receiving their additional benefits.
1. U.S. Government Website for Medicare. “Part B Costs.” medicare.gov (accessed May 2020).
2. U.S. Government Website for Medicare. “Medicare Savings Programs.” medicare.gov (accessed May 2020).
3. National Council on Aging Website, Medicare Matters, “A Guide to Part B Penalties. “A Guide to Part B Penalties.” mymedicarematters.org (accessed May 2020)
4. U.S. Government Website for Medicare. “Special Circumstances, Special Enrollment Periods.” medicare.gov (accessed May 2020).
5. National Medicare Rights Center Website. “Medigap Changes in 2020.” (accessed May 2020)