Medicare Part B Eligibility, Enrollment, Penalties, and Costs

What is Medicare Part B

Medicare Part B is that portion of Medicare (medical insurance) that covers;

• Medically necessary outpatient medical services (like doctor visits, diagnostic tests, etc.),
• Some preventive care (Like screenings, certain vaccines, and mental health counseling) and
• Durable Medical Equipment (DME).

Part B was intended to fill some of the gaps in medical insurance coverage left under Part A.

Summary of services and coverage rules:

• Home health services (This Services will be covered if you have been discharged and will need skilled nursing or therapy care.
• Ambulance services (Non-emergency ambulance usage is only allowed when there is no safe alternative transportation available to and from a hospital, and movement is deemed medically necessary).
• Therapy services (by a certified therapist).
• X-rays and lab tests.
• Chiropractic care (where medically necessary).
• Select prescription drugs (that are typically administered by a physician)

The plan will not cover (but can be covered by Medicare Advantage):

• Long-term care (like Nursing home care).
• Routine dental care and dentures.
• Routine eye exams
• Hearing aids.
• Care outside the U.S territory.
• Cosmetic surgery.
• Gym memberships
• Prescription drug coverage

Eligibility Medicare Part B

You are eligible for Medicare Part B if:

• Aged 65 years or older and

• A Permanent U.S. resident and living in the U.S. for at least 5 consecutive years.

Exceptions

You may be eligible for Medicare Part B regardless of age if ;

• You are a recipient of Social Security disability benefits (or railroad retirement board disability benefits) for at least 24 months.
• Individuals with amyotrophic lateral sclerosis or end-stage renal disease

How to apply Medicare Part B

The steps to follow when enrolling in Medicare will depend on whether or not you are collecting retirement benefits at the time of the Initial Enrollment Period (IEP).

• If you will be receiving Social Security (or Railroad Retirement benefits), this should be an automatic process (both Medicare Part A and Part B).
• If not receiving Social Security (or Railroad Retirement benefits), then you need to actively enroll in Medicare.

How to sign up for Medicare Part B

Sign-up can be done by:

• Paying a visit to your local Social Security office(make sure you ask for a written receipt)
• Putting a call to Social Security at 800-772-1213(ensure you Take down the names of the representatives spoken to)
• Sending a signed and dated letter (use certified mail and request a return receipt) to Social Security with your name, Social Security number, and the date you want to be enrolled in Medicare.
• You can also send a signed Form CMS-40B (Application for Enrollment in Medicare Part B) Social Security.
• This is facilitated by the Social Security Administration. You can Apply for Medicare Part B online by logging in at ssa.gov and making an online application (Please print out and save your confirmation page).

Enrollment in Medicare Part B

Initial Enrollment Period (IEP)

This is the first chance to sign up for Part B on eligibility (65 years). This period lasts for 7 months (3 months to your 65^th birthday, and it ends 3 months thereafter).

If eligibility is due to disability, IEP begins 3 months before the 25th month of getting Social Security Disability benefits, and it ends 3 months thereafter.

For ESRD, enrollment starts on the first day of the fourth month of dialysis (for home dialysis, you don’t have to wait for 4 months- it starts immediately).

Enrollment is immediate if an individual is hospitalized for a kidney transplant.

General Enrollment Period (GEP)

The GEP is another window to sign up for Part B if it did not happen during your IEP. This period runs from January 1 through March 31 of every year.

If enroll in GEP, Part B coverage will start on July 1 of that year. Enrollment penalties are applicable if you sign up at this time.

Also, the Part B premium will go up 10% for each 12-month period that you were eligible for but did not sign up for (on top of delayed coverage). You may have to make this late enrollment penalty as long as you have Part B coverage.

Special Enrollment Period (SEP)

If you don’t sign up for Part B during your IEP, you can sign up without a late enrollment penalty during the SEP.

You may be eligible for a SEP if you have had Qualifying Life Events (QLE).

SEPs mostly apply to working-aged, disabled, and international volunteers.

You can stretch enrollment into Medicare b past your 64^th birthday if;

• You still have coverage through an employer-based plan(larger than 20 employees) or
• you can access coverage through your spouse’s current active employment

Individuals in this situation usually enroll only in Medicare Part A and defer Part B until the employment-based cover ends (8 months after retiring or losing your employment-based coverage).

Penalties for Medicare Part B

Failure for an individual to sign up for Part B on their 65^th birthday(that is when they become eligible)exposes them to an extra 10% above the standard premium cost for every 12-month period delayed.

You will also pay extra for the entire time you were covered by Medicare.

Costs for Medicare Part B

Part B is optional. It requires the following costs (as determined by the Social Security Act):

• Payment of Medicare Part B monthly premium (if applicable and is based on adjusted gross income).
• Yearly deductible.
• Coinsurance.

The enrollee is also responsible for footing any of the costs that Part B does not cover.

What is the premium for Medicare Part B

The standard monthly premium for Medicare Part B in 2022 is $170.10 in 2022 ($164.90 for 2023).

For the year 2022, If your earnings were above $91,000 individually or $182,000 as a couple in 2020 (2022 is based on 2020 tax returns), then you will pay a higher premium.

Income-related monthly adjustment amount (IRMAA) for 2022

Source: Medicare.gov

Medicare Part B Deductibles

For the year 2022, Medicare Part B out-of-pocket annual deductible is $233($226 in 2023) and is applicable to Medicare-approved charges. These charges must be met before medically necessary services are covered.

Excess charges Medicare Part B

Coinsurance

• $389 per day from the 61st day through the 90th day of inpatient hospitalization
• $778 per day from the 91^st day through the 150th day of inpatient hospitalization (total of 60 lifetime reserve days, non-renewable).

Skilled Nursing Facility Coinsurance

• $194.50 per day for the 21st day through the 100th day.

Extra help for Medicare Part B

Individuals can qualify (If receiving Medicare and have limited resources and income) for Extra Help to assist in the payment of monthly premiums, annual deductibles, and co-payments related to Medicare prescription drug coverage.

Enrollees on Medicaid, Supplemental Security Income (SSI), or Medicare Savings Programs (MSP) are automatically enrolled in Extra Help.

Bottom Line

As much as Part B is voluntary, never opt out unless you have access to an employment-based plan (or your spouse’s current job-based plan) else you may incur a premium penalty should you sign up for Medicare coverage in the future.

Secondly, if your employer-based plan will pay for secondary coverage after eligibility for Medicare, consider enrolling in Medicare in order to have primary coverage. This ensures you pay less for your care.

Thirdly, Remember the SEP for the new prescription drug plan lasts 63 days and is dependent on having at least one Part A or B. You need both parts of Medicare to complete your coverage with either a Medigap plan or a Medicare Advantage Plan.

Lastly, always keep proof of trying to enroll in Medicare. It will prove handy when it comes to protecting yourself from incurring a Part B premium penalty should your application get lost.