Medicare Part B helps you pay for your doctor visits, outpatient care, clinics, laboratory tests, diagnostic screenings, and skilled nursing care. Part B insurance is not mandatory, but most seniors choose to take it because it is so affordable.
Part B pays about 80 percent of all doctor services you receive as a hospital inpatient. It also covers most common preventive healthcare treatments and your annual checkups.
The nice thing about Part B is that the coverage is very flexible. It’s private-fee-for-service coverage, so you can use any eligible Medicare doctor or health care provider. No approvals are required.
Medicare Part B Premiums
Unless you qualify for low income assistance through Medicaid, you will be required to pay a monthly premium for your Medicare Part B coverage. The amount of your premium is based on your annual income.
If you have Social Security benefits, your Part B premium is paid directly from your SSA benefits as a monthly deduction. Each year the premiums adjust slightly. For 2013, most seniors will $104.90. Those with higher incomes will pay slightly more.
If you are about to become eligible, don’t enrollment. If you do, you will incur a late enrollment penalty. Medicare will increase your premium by a full 10% for each year you were not enrolled in Part B while eligible. You will pay the higher rate for as long as you are enrolled. If you are still working and your employer offers group health coverage, the penalty may not apply. Check with your benefits adviser to be sure.
Is Part B Coverage Required?
If you or your spouse are still working and you have health coverage through your employer or your union, contact your benefits administrator to find out how your coverage works with Medicare. It may be to your advantage to delay Part B enrollment.
You can sign up for Part B any time you have current employer health coverage. However, be aware that COBRA and retiree health coverage are not considered current employer coverage.
When your employment ends, three important things happen:
- You have 8 months to enroll in Part B without incurring a penalty. This period has nothing to do with COBRA coverage, so don’t wait. If you miss your 8 month window, you will not be allowed to enroll until the next General Enrollment Period and you will be without coverage.
- You may be able to get COBRA coverage, which continues your health insurance through the employer’s plan for up to 18 months, albeit at a much higher cost to you. If you already have coverage through a COBRA plan, it will end when you enroll in Medicare. If you have End‑Stage Renal Disease (ESRD), your situation may be different, so consult your benefits adviser.
- When you sign up for Part B, your Medigap Open Enrollment Period begins.
If you have TRICARE (insurance for active‑duty military and military retirees), you are required to enroll in Medicare Part B to keep your TRICARE coverage.
How Medicare Works With Your Employer Health Insurance
When you have other insurance, such as employer group health coverage or TRICARE,
there are rules that determine who pays first. The insurance that pays first is known as the primary payer and the one that pays second is the secondary payer.
The primary payer always pays up to the limits of its coverage. The secondary payer only pays when there are costs the primary payer didn’t cover. The secondary payer may not pay all of the uncovered costs, in which case you will be required to make up the difference. If your employer insurance is the secondary payer, chances are that you will need to enroll in Part B before your insurance will pay.
For medical care expenses related to accident or injury, other insurance policies will be required to pay before Medicare. These include:
- No-fault insurance (including automobile insurance)
- Liability (including automobile insurance)
- Black lung benefits
- Workers’ compensation
Be aware that Medicaid and TRICARE are never the primary payer for services covered by Medicare. They only pay after Medicare, employer group health plans, and Medicare Supplement Insurance providers have paid to the limits of those polices.