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Do I have to enroll in Medicare Part B?

Four scenarios & what to do about Medicare Part B 

With Medicare Open Enrollment just around the corner, many have come into our retail stores with questions. With so many parts and different rules for each Medicare strategy, it's no wonder people have such a hard time figuring this out on their own. 

A question asked often is Do I have to sign up for Medicare Part B?

As a refresher, Medicare Part B is the medical insurance part of Medicare that covers medically necessary services for disease treatment and preventive services.

The short answer is whether or not you sign up for Medicare Part B depends on your situation. 

Let’s look at some four common scenarios and the best choice with regards to Medicare Part B.  

Do I need Medicare Part B if my spouse is still working? 

If your spouse is still working for a company with over 20 employees, you don't need to enroll in Medicare Part B. 

Let's look at an example. 

Tom came into the store for Medicare advice because he was about to turn 65 and his wife was still working. Tom thought he had to sign up for Medicare Part B (Medical Insurance) because that would become his primary insurance. Had Tom signed up for Medicare Part B, he would have been responsible for paying $104.90 each month in premiums. This adds up to $1258.50 a year, an unnecessary cost because Medicare only becomes the primary payer in companies that employee fewer than 20 people. For Tom, enrolling in Medicare Part A (Hospital Insurance), which he receives without paying a premium, and remaining on his wife’s group plan until she retires is the best strategy.

Do I need Medicare Part B if I'm still working? 

Similar to if your spouse is still working, if you are still working for an employer with over 20 employees, then you don't need Medicare Part B. 

Let's look at an example. 

Drew is turning 65, and still works at Vanderbilt University, one of Tennessee’s largest employers. Because Vanderbilt has more than 20 employees, Drew’s employer-sponsored insurance will remain his primary insurance until he retires. He should delay his Part B enrollment until he retires or otherwise loses employer coverage. Drew will be given a Special Enrollment Period (SEP) to enroll in Part B without a penalty either while he is still working or for 8 months after he retires. However, Drew should enroll in Medicare as soon as he retires to avoid gaps in coverage. 

Do I need Medicare Part B if I'm turning 65 and work for a small company?

If you are still working for a small company with less than 20 employees, then you will need Medicare Part B to avoid getting a penalty. 

Let's take an example. 

Mary works for a small bakery in Indianapolis that has 14 employees. Because her company has fewer than 20 people, Mary should sign up for Medicare Part B as soon as she is eligible. This is because Medicare will become Mary’s primary coverage once she turns 65 and if she does not take Medicare when she is eligible, she will be uninsured and need to pay a penalty. If Mary doesn't sign up for Part B when she is eligible, she will have to pay a penalty. Her monthly premium will increase 10% for each full 12-month period she did not enroll in Part B. If Mary was eligible in January of 2012 and did not sign up until January 2014, she will have to pay an additional 20% for her premium, which she will pay for as long as she has Part B. 

Do I need Medicare Part B if I'm self-employed and have an individual policy? 

If you have an individual policy, you should sign up for Medicare Part B as soon as you are eligible.

Let's take an example. 

Emily is a freelance artist who has an individual health insurance policy. Emily should enroll in Medicare Part B as soon as she is eligible, because her individual policy will not cover her once she turns 65. However, it’s important to note that if Emily has dependents on her individual plan, their coverage will be impacted. If Emily does not enroll in Part B, she will face the late enrollment penalty described above. 

Do I need Medicare Part B if I am retired? 

If you are retired from a company that doesn't provide retirees with benefits, you need to enroll in Medicare Part B to avoid a penalty. If your company does provide you with retiree benefits, you still need to enroll in Medicare Part B because your retiree benefits will become secondary. 

John retired from his company when he was 63. Now, that he is turning 65, Medicare will become his primary source of insurance, with his retiree insurance becoming secondary. As such, he should enroll in Medicare Part B as soon as he is eligible. On a similar note, if you have COBRA, Medicare will become your primary insurance when you turn 65. 

With so many facets of Medicare it’s important to evaluate what strategy is best for you. Whether you are retired, working, or somewhere in between, knowing when and if you should sign up for Part B is essential to not only saving money, but avoiding gaps in coverage or unwelcome penalties. 

If you enjoyed this post, you may also like Can I opt out of Medicare Part A? 

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