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Who is eligible for Medicare Part B?

Who is eligible for Medicare Part B? - Medicare Enrollment Form

Just the essentials...

  • Medicare Part B insures a wide array of  medical services, particularly those that do not require an overnight hospital stay.

  • In combination with hospital insurance of Part A, this forms comprehensive Original Medicare health coverage.

  • Near a person’s 65th birthday, Americans can enroll in Part B and pay premiums for it.

  • At any age, disabled persons automatically get Part B after 24 months of receiving disability benefits, and persons diagnosed with specific diseases can get Part B coverage as well.

  • Those receiving Social Security or Railroad Retirement Board benefits for at least 4 months before turning 65 get automatic enrollment in Part B, while everyone else signs up through Social Security.

Mainly, older Americans benefit from Medicare Part B, but it can cover other types of people as well.

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

In other cases, persons under 65 who receive benefits from Social Security or the Railroad Retirement Board get automatic eligibility after 24 months of benefits.

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Medicare Part B is the Medical Services Portion of Medicare

Who is eligible for Medicare Part B?

Originally, Congress intended Medicare as a comprehensive health care system for older Americans.

Upon enactment, Original Medicare focused on hospital-based care and outpatient care. Nearly 40 years later, the benefit structure became complete by adding Part D for prescription drug coverage.

Later, Congress added Part C: Medicare Advantage to provide greater choice and variety for Medicare users.

By law, these Part C plans reflected the same or better benefits for medical services under Part B, as well as the hospital services under Part A.

In other words, Medicare Advantage consists of private plans must meet or exceed the coverage of Original Medicare.

  • Eligible persons include those ages 65 or older, and persons with ALS or End Stage Kidney disease.
  • Together, Parts A and B form Original Medicare.
  • Part D is prescription drug coverage
  • Part C, Medicare Advantage, offers private plans to compete with Original Medicare, providing more choices for consumers.
  • Original Medicare can combine with Part D, or a Medicare Advantage plan that includes Medicare Part D coverage

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 below-listed items constitute the major categories of Medicare Part B.

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

The Individual Mandate

Who is eligible for Medicare Part B?

As it stands alone, Part B will not meet the requirements of the individual mandate of the Affordable Care Act.

Part B lacks the minimum essential coverage required by the Affordable Care Act, given that hospitalization is not covered.

Therefore, the following Medicare combinations meet the individual mandate:

  • Medicare Parts A and B, also known as Original Medicare
  • Medicare Advantage

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.

If the total required working credits remain unmet, an enrollee can get Part A at a reduced premium of $259 upon having worked 30-39 of the 40 work credits. Otherwise, as of 2021, anything lower than 30 means paying the full $471 for the monthly Part A premium.

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

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

Dropping Part B Can Lead to Penalty

Those that have Part B have the ability to drop it.

Passing on Part B can cause a penalty later on when resuming Part B, or starting it for the first time.

A late penalty for Part B exists, determined by the amount of time you could have had Part B, or coverage just as good, but you opted not to have any coverage.

Part B has a premium, meaning that for many, the cost factor greatly impacts whether to accept it.

The average premium is $148.50 per month in 2021.

Unlike Part A, Medicare offers no premium-free Part B based on work history.

The Part B Penalty

Who is eligible for Medicare Part B?

To be precise, the following terms describe signing up late for Part B:

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.

The Part B late penalty exists for several reasons.

For one, funding gives reason to penalize late enrollees.

Those that do not accept Part B right away end up not paying into the pool of funding through premiums like the rest of the population of Medicare beneficiaries.

The lack of funds has a consequence for the system. 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 large population scale over years or even decades of paying into Medicare.

Secondly, the Part B late penalty spurs those at highest risk for health issues and complications, namely seniors and persons with disabilities, to get covered for medical care they need as soon as possible.

The Part B Deductible

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.

The deductible precedes cost-sharing in Part B. In other words, if medical expenses exceed $203 out-of-pocket in the course of a year, Medicare begins to pick up the majority of those out-of-pocket costs from that point on for the rest of the calendar year.

A typical cost-share divides the costs of a service by a balance of 80 percent and 20 percent.

After meeting the out-of-pocket deductible, 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 users need more services than planned or expected.

Medicare sets no maximum out-of-pocket limit for the year. For beneficiaries, this means there is not a point at which Original Medicare will cover 100% of medical expenses.

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

For them, 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.

Medicare Supplement and Part B

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.

Deferring Part B

Who is eligible for Medicare Part B?

Some people age 65 or older continue to work and get coverage from an employer-sponsored program. In that instance, they may wish to pass on buying Part B.

These persons can delay buying Part B without penalty because they can qualify for a special enrollment period of 8 months at the end of their employer coverage.

In these cases, retirees can apply for Part B alone, but when the 8-month special enrollment period ends, they will have to get Part A as well in order to avoid any penalty.

Enrollment 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 selection 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. In those cases, coverage begins the very next month.
  • 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.

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

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.

Other than the late enrollment penalty, high income can determine Part B premium cost.

Normally the Part B premium is set to $148.50 in 2021. However, 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.

Known as IRMAA, Income Related Monthly Adjustment Amount, these figures come from the IRS reported modified adjusted gross income from 2 years ago.

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.

Comparison shopping will help consumers make the best selection of private plans in Medicare Part C, Part D, and Medicare Supplement.

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