Unfortunately, there is a common misconception that Medicare beneficiaries only need Part A to have comprehensive coverage. While Medicare Part A is the free option, when beneficiaries only take Medicare Part A, there is a huge gap in coverage.
Before we dive any further into when you need Medicare Part B, let’s first take a look at the differences in Medicare Parts A and B.
Medicare Part A vs. Part B
Medicare Part A generally covers inpatient care (hospitalization and associated services). For the majority of people, there is no monthly premium for Part A. This is because most people pay Medicare taxes during their employment. Those who are already receiving Social Security benefits will be automatically enrolled in Medicare Part A. Because of this, most people think Part A is the only coverage they need.
This is not true. Having Part B can be a critical component of your health coverage. Medicare Part B generally covers outpatient care (doctor’s visits and associated services). It covers 80% of ambulance services, inpatient and outpatient care, partial hospitalization, durable medical equipment, lab work, physical therapy, surgical services, and much more.
Therefore, if you had only Part A but not Part B and had to have a sudden surgery in the hospital, you would have to pay for all of the surgical services you received out-of-pocket. This can quickly become very expensive. Thus, it is quite risky to not enroll in Part B if Medicare is your primary insurance.
Below, we have listed various scenarios which will help you understand when you need Part B and when you can delay it.
Medicare Is Your Primary Insurance
Once you retire and have no other health insurance, Medicare becomes your primary insurance.
As we mentioned above, once Medicare becomes your primary insurance, you need Part B to ensure you have full health coverage. While Part A covers some, there are many gaps that could cost you thousands of dollars out-of-pocket.
If Medicare is your primary insurance coverage, Part B is critical to ensuring you have full coverage.
Here are some common scenarios where Medicare is primary:
- When you are 65 or older and have employer coverage at a company with less than 20 employees
- When you are under 65 on Medicare due to a disability and work for an employer with less than 100 employees
- If you have retiree coverage from a former employer
- With COBRA insurance, you must enroll in Part B by the 8th month of COBRA
- When you are turning 65 with Tricare for Life (TFL)
- When you are 65 or older and enrolled in Medicaid
All of these scenarios require you to be enrolled in Part B. Without it, you would be responsible for the first 80% of all outpatient charges. Even worse, your secondary coverage may not pay at all if you are not actively enrolled in Part B as your primary coverage.
Part B & Medicare Supplement Coverage
Medicare Supplement plans do not replace Part B. They pay as secondary coverage to your Original Medicare.
Medicare Parts A and B work together with your Medicare Supplement plan to ensure you have full coverage. Before you can apply for a Medicare Supplement, you must be enrolled in both Medicare Parts A and B.
When you have Original Medicare and a Medicare Supplement, your medical expenses will be paid as follows:
- Your healthcare provider will bill Medicare for your medical expense. Part B pays 80% of your outpatient expenses after a small deductible.
- Medicare then sends the remainder of your bill to your Medicare Supplement plan company, which pays the other 20% and other expenses, depending on which Medicare Supplement plan you have.
While you must have both Parts A and B to have a supplement, it may also be unwise to have only Parts A and B without a supplement. This would leave you exposed to paying 20% on all medical expenses. This can get very expensive, very quickly.
Part B & Other Primary Coverage
If you have worked at least 10 years or 40 quarters, then you will qualify for premium-free Part A. However, Part B always comes with a monthly premium, so many choose to delay enrolling in Part B if they are still working and have employer-based coverage.
It is important to consider, however, that even if you have employer-based coverage, Medicare may still help pay for some costs that are not covered by your employer.
You should strongly consider enrolling in Medicare Part B if you have employer-based coverage from a company with fewer than 20 employees. In this situation, Medicare could be the primary payer for medical expenses. In this case, it would be wise to enroll in Part B to ensure you are not exposed to hefty medical bills.
However, if you work at a larger company with 20 or more employees, and have a low deductible with your employer plan, then it may not make sense for you to have Part B. In this case, you could delay enrollment into Part B until you retire.
Regardless of the size of your company, talk with a benefits administrator to help you decide when to enroll in Part B.
Delaying Your Part B Coverage
If you delayed your Part B because you were still working, you have a limited time upon retirement where you can enroll in Part B without a late-enrollment penalty. This period lasts eight months following the month when your employer coverage ends.
If you choose to enroll in a Medicare Supplement plan as well, you have a six-month Open Enrollment Period once your Part B coverage starts. During this time, you cannot be denied from a particular Medicare Supplement company without being asked any health questions. Therefore, you cannot be denied coverage due to any pre-existing health conditions during this time period.
Do I need Medicare Part B if I’m a Veteran?
While you can have both Medicare and Veterans Affairs (VA) benefits, the two do not work together. One does not pay secondary to the other.
VA benefits will only provide coverage at VA clinics and hospitals. Medicare will not cover you at these facilities.
In addition, Medicare will only provide coverage at facilities that accept Medicare. VA benefits will not cover you here.
Many veterans have both VA benefits and Medicare in order to have options on where to get their coverage. VA clinics and hospitals are known for long wait times, so having Medicare gives veterans the opportunity to go to a regular hospital or doctor’s office instead.
Be aware that if you choose to only have VA benefits and opt out of Part B, then later decide to join, you will pay a Part B late penalty. You’ll also need to wait until the next General Enrollment Period to enroll, which means there could be a delay before your coverage becomes active.
GoMedigap Can Help
Most people need Part B at some point. The important step is making sure you enroll at the right time. If you are unsure when to enroll in Medicare Part B, consult with a Medicare expert.
At GoMedigap, our agents are professionally trained and educated on all things Medicare. They can understand your situation and advise you on the next steps to take, and when to take those steps. To speak with one of our agents, call us directly at (800) 310-2550.