Who is eligible for Medicare Part B?

More commonly, older Americans benefit from Medicare Part B, but it can cover other ages due to health conditions. Even still, many wonder if and when they qualify.

At any age, those diagnosed with End Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS, or Lou Gehrig’s Disease) qualify for Part B.

Most people have to sign up for Part B themselves, meaning that enrollment timing is crucial. Waiting too long can even result in permanent fees added to the Part B premium.

In other circumstances, people enroll automatically. Such is the case after 24 months of disability benefits at any age, or when turning 65 after receiving 4 months of Social Security or Railroad Retirement Board income benefits.

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Understanding Part B

Simply put, Medicare Part B is medical insurance. It covers outpatient care including doctor’s services, mental health, and durable medical equipment.

The Centers for Medicare and Medicaid handles operations for Parts A and B. When combined with Medicare Part A, it comprises Original Medicare.

The major categories of Medicare Part B include:

• Outpatient services (doctor’s visits, tests, outpatient surgeries)
• Durable medical equipment (walkers, wheelchairs, oxygen tanks)
• Occupational and physical therapists
• Prosthetics, orthotics, and medical supplies

Part B Has a Premium, Part A May Not

Generally, Medicare Part B eligibility either comes with age or disability status. In 2021, Medicare set the Part B premium to $148.50

Part A can be premium-free for those with 40 covered quarters of work experience. Social Security measures taxed work history to determine if someone has to pay for Part A, with 40 quarters amounting to about 10 years of work.

In the majority of cases, Part B requires payment of a premium to start it and to keep it going, regardless of work history.

In general, if someone enrolls in Part B on time, high income can affect Part B premium cost.

If an individual’s annual income exceeds $88,000, or $176,ooo for married couples, they can expect to pay a higher Part B premium. This also affects the monthly premium for Part D drug coverage.

Known as IRMAA, Income Related Monthly Adjustment Amount, these figures come from the IRS reported modified adjusted gross income from the prior year.

Social Security beneficiaries can get the Part B premium deducted from their normal income benefit.

Those not receiving Social Security benefits must maintain regular payment of monthly Part B premiums. Medicare accepts payments set up directly through a bank or credit union, or with a physical bill in the mail.

Delayed Part B Results in a Late Penalty

Part B has a premium, meaning that this cost factor impacts many as to whether to accept it.

Passing on Part B can cause a penalty later on.

The Part B penalty adds 10 percent of the Part B premium for life, multiplied by the number of full years you were eligible for Part B, but opted not to have it.

Some people enter Medicare eligibility but have the opportunity to continue with employer-offered insurance.

As long as it measures up to the standards of medical care provided by Part B, one can keep employer coverage without later penalty for Part B. These persons can delay buying Part B without penalty because they qualify for a special enrollment period of 8 months at the end of their employer coverage.

When the 8-month special enrollment period ends, they will have to get Part A as well Part B in order to avoid any penalty.

Overall, the Part B late penalty exists for several reasons:

1. Those delaying Part B don’t pay into the pool of funding through premiums like the rest of the population of Medicare beneficiaries. The lack of  premium funds strains the system financially. Medicare Part B gets its operating revenues in part from the premium payments from eligible recipients. In essence, the penalty helps to balance out healthcare costs on a tremendous population scale over years or even decades of paying into Medicare.
2. The highest risk populations for health issues and complications get Medicare, namely seniors and persons with disabilities. Therefore, starting Medicare on time prevents unnecessarily high costs for the healthcare they likely need.

Costs for Medicare Part B

Part B has an annual deductible amount which users must pay before Medicare will pay its share of costs.

In 2021, the Part B deductible is $203. After members pay this amount out-of-pocket, Medicare pays 80% and the beneficiary pays the leftover 20% for the remainder of the year. When the new year comes, the Part B deductible resets.

Even 20 percent of the leftover balance for medical services can build up quickly, especially if patients need more services than planned or expected.

Medicare sets no maximum out-of-pocket limit for the year. For beneficiaries, this means Original Medicare will never cover 100% of medical expenses.

To some, the 20 percent coinsurance payments create barriers to affording the care they need.

Part B with a Medicare Supplement

A Medicare Supplement or Advantage plan can help by setting an annual stop-loss amount for medical expenses. Upon spending the annual maximum dollar amount, the plan pays 100% of out-of-pocket medical expenses until the year ends.

Medigap or Medicare Supplement are private insurance plans authorized by the federal government with state government oversight.

As insurance companies, states must authorize and review their activities to continue offering Medigap plans.

A Medicare Supplement, or Medigap policy, can secure an individual’s budget in the event of unexpected medical expenses.

Medicare Supplement policies can pay the 20% gap between Part B coverage and the consumer’s responsibility. Medicare Supplement policies labels plans ranging from letters A through N.

Identified by a letter, each Medicare Supplement plan covers standardized portions of services. Some even cover medical expenses when traveling to a foreign county, with some states offering fewer options.

This means that when shopping by comparison, the only difference between Medicare Supplement policies of the same letter is the premium price charged by the insurance carrier who offers it.

How to Enroll in Part B

One can enroll in Part B during designated enrollment times or a special period for some qualifying change in life status.

People enroll in Part B at a local Social Security or Medicare office, by mail, by telephone, or online with Social Security or Medicare.

The below-listed items qualify for special enrollment in Parts A and B.

• Moved to a new location not served by the existing plan
• Recently returned to the US from abroad
• Recently lost employer-sponsored job coverage
• Current plan no longer remains certified by Medicare
• Being affected by FEMA-declared natural disaster
• Ending coverage that was equal to or better than Medicare
• Enrolled in an all-inclusive program like PACE

When to Enroll in Part B

The Initial Enrollment Period runs for seven months, lasting from three months before the 65th birthday month, through the birthday month itself, and three months afterward.

Initial enrollment presents the best time to make enrollment choices because of the greater number of options and the avoidance of late penalties.

• Open enrollment runs from October 15 through December 7 each year. Applicants can get Original Medicare, a Medicare Supplement, Medicare Advantage, or Part D prescription drug coverage.
• General Enrollment runs from January 1 through March 31 of each year. This period can be used to join Part A and/or B, with coverage starting July 1. Otherwise, this time allows persons with a Medicare Advantage plan, to change to another plan, drop it to join Part D, or revert back to Original Medicare.
• Special Enrollments follow qualifying life events related to a change in life status such as moving to a new area, gaining or losing state Medicaid benefits, natural disasters, or losing employer-based health insurance coverage.

Older and Disabled Americans are Eligible for Medicare Part B

There will be a significant difference in the costs of Parts A depending on the number of years worked while paying taxes. Generally, citizens aged 65 can get Part B coverage.

In many cases, a person physically cannot work. Disabled persons can get Part A and Part B automatically, but may still have to pay monthly premiums.

Once enrolled in Parts A and B, consumers may wish to use a private all-in-one plan as a convenient option to protect against the 20% of costs left to beneficiaries for medically necessary services.

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