Do you always have to pay for Medicare Part B?

Medicare Part B is medical insurance that covers doctor visits, outpatient care, preventive services, ambulance transportation, durable medical equipment, mental health services, and more. Medicare Part B is optional, but there are some important things to consider before deciding not to enroll.

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What is Medicare Part B?

Medicare Part B is supplemental medical insurance that covers:

Doctor visits
Outpatient care
Preventive services like screenings, vaccines, and yearly wellness visits

Ambulance transportation
Durable medical equipment like wheelchairs, walkers, hospital beds, etc.
Mental health services

Limited prescription drugs like some cancer medications administered by a doctor
And more…

Medicare Part B covers these medically necessary services and supplies both in and out of the hospital. It is optional and has a monthly premium that enrollees must pay.

Is Medicare Part B required?

No, Medicare Part B is not required. It is an optional part of Medicare. However, there are some important considerations if you do not enroll in Part B:

You will have to pay 100% of costs for Part B-covered services out of pocket.
If you decide to enroll later, you may have to pay a late enrollment penalty for as long as you have Part B.

You can only enroll during designated enrollment periods, or else you may have to wait.
Not having Part B affects your eligibility for other types of coverage like Medicare Advantage plans or Medigap policies.

So while Part B is not required, there are risks involved with not enrolling. About 99% of people with Medicare Part A also enroll in Part B.

When can you enroll in Medicare Part B?

You have the opportunity to sign up for Medicare Part B during these enrollment periods:

Initial Enrollment Period – When you first become eligible for Medicare, you can enroll in Part B during the 7-month period that begins 3 months before you turn 65, includes the month you turn 65, and ends 3 months after you turn 65.
General Enrollment Period – If you did not sign up for Part B during your Initial Enrollment Period, you can enroll between January 1 – March 31 each year. Coverage begins July 1.

Special Enrollment Period – If you delayed Part B because you or your spouse had group health plan coverage through an employer, you may qualify for a Special Enrollment Period to sign up without penalty.

Enrolling in the right timeframe is important to avoid paying late enrollment penalties or gaps in coverage.

What are the costs for Medicare Part B?

Medicare Part B has the following costs:

Monthly premium – The standard premium for 2023 is $164.90. Higher income enrollees pay more.
Deductible – $226 per year for 2023 before coverage begins.
Coinsurance – 20% of the Medicare-approved amount for most covered services after you meet the deductible.

Your costs may be different if you have additional coverage like Medigap, Medicaid, or retiree health benefits. The premium increases slightly each year and is typically deducted from your Social Security benefits. Higher income enrollees pay higher premiums according to income brackets.

What is the Medicare Part B late enrollment penalty?

If you do not enroll in Medicare Part B when you are first eligible and you enroll later, you may have to pay a late enrollment penalty. Here are some key facts:

The penalty is 10% of the current Part B premium charged for every 12-month period that you were eligible but not enrolled.

You will pay this penalty each month for as long as you have Part B coverage.
There are some exceptions where you can enroll late and not pay a penalty, like if you had qualifying health coverage through an employer.
The penalty is added to your monthly Part B premium.

Let’s look at an example:

John’s Initial Enrollment Period ended September 30, 2021. He did not enroll in Part B.
John enrolls during the General Enrollment Period in March 2023. His Part B coverage starts July 1, 2023.

His penalty is 20% (10% x 2 years) of the current premium amount.
If the 2023 premium is $164.90, John’s monthly premium is $164.90 + $32.98 (20% penalty) = $197.88

The late enrollment penalty is designed to encourage enrollment when you are first eligible. The penalty can add hundreds of dollars to your annual Medicare costs.

When can you drop Medicare Part B?

There are only a few circumstances when you can terminate your Medicare Part B coverage:

If you enroll in Medicare Advantage or another program that includes full medical benefits.
If you have group health plan coverage through an employer for either yourself or your spouse.

If you move out of the United States permanently.

You cannot otherwise drop Medicare Part B unless you qualify under one of these circumstances. And if you do terminate Part B, you may have to pay a late enrollment penalty if you re-enroll down the road. So it is not recommended to drop coverage unless absolutely necessary.

Should you keep paying for Medicare Part B?

Here are some reasons why you should consider keeping your Medicare Part B coverage:

Avoid paying 100% of costs for Part B services – Doctor visits, tests, ambulances, etc. can be very expensive without insurance.
Prevent late enrollment penalties – As shown in the earlier example, penalties can significantly increase your monthly costs if you enroll late.
Maintain access to supplemental coverage – You cannot get a Medigap plan or Medicare Advantage plan without Part B.

No need to re-enroll later – Once you enroll in Part B, coverage will renew automatically each year.
Peace of mind – Part B protects you against major medical expenses and provides coverage for essential services.

Unless you have comprehensive coverage through an employer or retiree plan, dropping Part B leaves you exposed to potentially high out-of-pocket costs. For most people, it is worth paying the premiums and deductible to receive Part B benefits.

What if you cannot afford Medicare Part B?

If you cannot afford to pay your Medicare Part B premiums, here are some options that may help:

State Medicaid programs – Medicaid may help pay some or all of your Medicare premiums based on your income and assets.
Medicare Savings Programs – These state programs pay all or part of your Medicare Part B premiums if you meet income and asset limits.

Supplemental Security Income (SSI) – SSI recipients automatically qualify to have their Part B premium covered.
Employer group health plans – Some employer plans help pay for Part B premiums.
Social Security Administration (SSA) – The SSA can provide guidance on assistance programs and help you file an appeal if you cannot afford premiums.

Reaching out to your State Health Insurance Assistance Program (SHIP) counselor is a great place to start. They can help you understand assistance options for Medicare costs.

With the right assistance program, you may be able to enroll in Part B with little to no out-of-pocket premium costs. Do not let the cost be a barrier to getting insured.

Can you get Medicare Part B for free?

It is possible to get Medicare Part B for free if you qualify for Medicaid or a Medicare Savings Program. Here is how it works:

Medicaid – Most states use Medicaid funds to pay the Part B premiums for Medicare beneficiaries with limited income and assets. Eligibility varies by state.
Medicare Savings Programs – These state programs pay for Part B premiums for individuals with incomes up to around $1,549 per month and assets below $8,400 for one person or $14,050 for a couple. Benefits are standard across all states.

So if you qualify for full Medicaid benefits or a Medicare Savings Program in your state, your Part B premium could be covered completely.

You may also pay nothing for Part B in these cases:

If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is below $97,000 as an individual or $194,000 as a couple.
If you receive SSI, as Social Security Administration pays the premium.

If your Part B premium is paid by an employer retiree or union health plan.

Check if any of these situations apply to you. If not, your State Health Insurance Assistance Program can advise you on other ways to get help with Medicare costs if you have limited income and resources.

Conclusion

While Medicare Part B has a cost, the coverage and protection it provides is valuable for most Medicare beneficiaries. The monthly premium, deductible, and coinsurance amounts help cover a wide range of medical services vital to preserving your health. Carefully consider the risks before declining Part B enrollment.

If you cannot afford Part B, assistance is available through Medicaid, Medicare Savings Programs, and other options based on your situation. Reach out to your State Health Insurance Assistance Program for personalized help on reducing your Medicare costs.

With the right information and guidance, you can make an informed decision about Medicare Part B enrollment and find resources to help manage the expense. Medicare provides important benefits to older and disabled Americans – make sure you can access all the coverage you need.