When you approach age 65 and retirement, you’ll begin to hear about Medicare “parts” and “plans.” One specific Medicare part you will want to know, like the back of your hand, is Medicare Part B. This part of Medicare is what provides you with your outpatient medical coverage.
You get Medicare Part A and Part B from the federal government. These benefits are identical for every Medicare beneficiary. The other parts and plans associated with Medicare are purchased from private insurance companies. However, Part B helps create your Original Medicare, and you must be enrolled in Part B to purchase supplemental plans. To learn more about when you need to enroll in this part of Medicare, visit Medicare part B – Boomer Benefits.
What to know about Medicare Part B
Once you sign up for Medicare Part B, you will be given an effective date which will always be the 1st of a month. Starting on that day, you will have coverage from Medicare Part B. The services that Part B covers include doctor visits, specialist visits, surgeries, physical therapy, lab work, durable medical equipment, preventive screenings, and more.
You will need to meet the Part B annual deductible before Part B begins covering 80% of the cost of your medical services. In 2022, that deductible is $233. After you’ve met the deductible, you’ll be responsible for the 20% coinsurance. However, preventive screenings are covered 100% by Medicare Part B, so they would not apply toward the deductible.
It’s essential to keep in mind that there is no cap on Part B services. Therefore, you will pay 20% for your services with no limit. Fortunately, you can purchase a Supplement plan to help cover that. However, if you have employer coverage or another type of insurance plan, your Part B may coordinate differently.
How Part B works with large employer insurance
Employer insurance can coordinate with Medicare, but there are specific rules. Let’s say you or your spouse actively work for an employer with 20 or more employees, and that insurance covers you; you can delay Part B while you have that coverage.
Many beneficiaries will delay Part B when they have creditable coverage to avoid paying the monthly premium. However, if you wish to enroll in Part B, Medicare will always be secondary to large employer insurance and will help cover costs after the primary insurer pays.
Once you lose large employer insurance, you’ll have eight months to enroll in Part B before accruing a late enrollment penalty. You won’t want to miss this window!
Part B and small employer coverage
What if the employer has less than 20 employees? Small employer insurance is not considered creditable for Medicare Part B. Therefore, you will want to enroll in Part B within your Initial Enrollment Period. You have the three months before your 65th birthday month and the three months after to apply for Part B before you start accruing a late enrollment penalty.
You need to apply during that window because Medicare is primary to small employer insurance. The small employer insurance will help with costs after Medicare.
How does Part B work with other insurance?
If you have retiree insurance, Tricare for Life, or VA benefits, you will also want to ensure you enroll in Part B during your Initial Enrollment Period. Medicare is primary to retiree coverage and Tricare for Life. For VA benefits, you use Medicare whenever you see a civilian doctor. Even if you don’t see civilian doctors often, you will accrue a penalty if you didn’t sign up for Medicare Part B.
Medicare Part B helps create the foundation of Original Medicare. Once you are eligible for Medicare, you’ll want to know when to enroll in Part B and how it may coordinate with other insurance. Part B will be primary in most situations, so it’s important to sign up during the correct window.