Original Medicare consists of two parts. The first, Part A, covers inpatient hospital care, skilled nursing facility care, hospice care, and some home health care. Part B, however, aims to provide coverage for medical services and supplies that are not covered under Part A, like preventive services and outpatient care.
If you already have Part A and are wondering whether to enroll in Part B, the decision will depend on various factors, like your current coverage, individual healthcare needs, and budget. Let’s explore the benefits and costs associated with Medicare Part B so you can gain a better understanding of its value and make an informed decision about whether or not to enroll.
Is Medicare Part B mandatory for everyone?
Medicare Part B is generally not mandatory, but you must enroll when you first become eligible unless you have creditable health coverage through a current employer. Part B provides essential outpatient medical services and preventive care, but it does not cover services like routine vision, dental, or hearing care. Failure to enroll when required can result in lifelong late enrollment penalties.
Medical Services That Medicare Part B Does Cover
Part B covers:
Doctor and other health care provider services
Outpatient care
Durable medical equipment (DME)
Home health services
Ambulance services
Clinical lab services
Outpatient mental health care
Preventive services, like certain screenings and vaccinations
Some outpatient prescription drugs
What Medicare Part B Doesn’t Cover: Managing Out-of-Pocket Costs
Part B only covers about 80% of healthcare costs, leaving you responsible for the remaining 20%. To account for these out-of-pocket costs, you may explore Medicare Advantage plans, which offer the same coverage as Original Medicare but may include additional routine benefits. You may also choose to enroll in a Medicare Supplement plan, also known as Medigap, which helps pay for costs not covered by Original Medicare, like coinsurance, copayments, and deductibles.
Routine Dental, Vision, and Hearing Care
While Part B covers a range of medically necessary services, it’s important to note that it does not cover certain routine services. Specifically, Part B does not cover routine dental care (such as cleanings, fillings, or dentures), routine vision care (like eye exams for glasses or the glasses themselves), or routine hearing care (including hearing exams and hearing aids).
Long-Term Care and Custodial Services
Part B generally excludes "custodial care," which includes non-medical help with daily activities like bathing, dressing, and eating, whether provided at home, in an assisted living facility, or in a nursing home for an extended period.
Scenarios When Part B is Necessary
You Have Employer Coverage: Large Group vs. Small Group
Medicare's requirement for you to enroll in Part B while you still have employer coverage depends entirely on the size of your employer. If your employer has 20 or more employees (Large Group), your employer plan is the primary payer, and you generally do not need to enroll in Part B immediately. You can delay enrollment without penalty until your employer coverage or employment ends. However, if your employer has fewer than 20 employees (Small Group), Medicare becomes the primary payer, and your employer plan pays second. In this scenario, you must enroll in Part B when you become eligible to avoid major gaps in coverage and potential late enrollment penalties.
Part B Enrollment with COBRA, Tricare for Life, and Medicaid
COBRA: COBRA is generally not considered creditable coverage by Medicare, meaning that if you rely on COBRA after leaving your employer, you must still enroll in Part B during your Special Enrollment Period (SEP)—the eight months after your employment or large group coverage ends—to avoid a lifetime late enrollment penalty. Failing to enroll promptly means COBRA may pay very little for your care, as Medicare is primary to COBRA once you become eligible.
TRICARE for Life (TFL): For those eligible for TRICARE for Life (retirees and their families), enrollment in both Medicare Part A and Part B is mandatory to retain TFL coverage, as TFL automatically acts as secondary insurance to Medicare.
Medicaid: Individuals with Medicaid may have their Part B premiums covered and should enroll in Part B when first eligible. If Medicaid coverage ends, a new Special Enrollment Period is provided to enroll in Part B without penalty.
Can you delay Part B to avoid the monthly premium cost?
Another factor to consider regarding Part B enrollment is Medicare costs. While Part A is generally premium-free for most individuals, Part B does come with a monthly premium. If your existing coverage is sufficient and you have no immediate need for the services covered under Part B, you may delay enrollment to avoid paying unnecessary premiums. The primary reason Medicare beneficiaries avoid this penalty is if they have creditable coverage based on current employment (either their own or a spouse's) through an employer with 20 or more employees. As long as you maintain this large group health plan coverage, you can delay Part B enrollment without penalty, utilizing a Special Enrollment Period (SEP) when the employment or coverage ends. However, if you do not have this type of coverage—for instance, if you have coverage from a small employer (fewer than 20 employees), COBRA, retiree health plans, or individual market plans—you must enroll during your Initial Enrollment Period.
How the Medicare Part B Late Enrollment Penalty Works
The Medicare Part B late enrollment penalty (LEP) is a permanent, monthly fee added to your standard Part B premium if you don't sign up when you are first eligible and don't have other qualifying coverage (like a large employer plan). The penalty is calculated by adding an extra 10% to the standard Part B premium for every full 12-month period you should have been enrolled but were not.
Why You Need Part B to Enroll in a Supplemental Plan
Enrolling in Medicare Part B is mandatory for obtaining either a Medicare Supplement Insurance (Medigap) policy or a Medicare Advantage (Part C) plan. Medigap policies are specifically designed to pay the cost-sharing (like the 20% coinsurance) that Part B leaves behind, making Part B essential for the supplement to function. Likewise, Medicare Advantage plans are private plans that replace the administration of Original Medicare; therefore, you must be enrolled in both Part A and Part B to be eligible for and enroll in the Part C plan.
Need help navigating Medicare Part B? SelectQuote can help.
Understanding Medicare Part B enrollment can feel confusing, so it’s important to have a team you trust on your side as you navigate coverage options. Our licensed insurance agents will help you consider your unique situation, including your age, health status, and employment, to find the Medicare Advantage plan that works best for you.
