David Sayen: Do I need Medicare Part B?

People ask me all kinds of questions about Medicare. One of the most frequent concerns is whether they should sign up for Medicare Part B.

Part B is medical insurance. It covers professional fees for doctors and other health care providers, outpatient treatment, durable medical equipment, home health services, and preventive care like flu shots and screenings for cancer and heart disease.

Part B requires a monthly premium, which is $104.90 for most Americans in 2015. You’re not required to pay the premium if you don’t want Part B coverage. But is it to your advantage to pay?

The answer depends on your current and future health insurance coverage and needs.

Let’s say you don’t have any other health insurance when you become eligible for Medicare. You should enroll in Part B when you’re first eligible (which, for most people, is when they turn 65). If you don’t sign up for Part B when you’re first eligible, you may have to pay a late enrollment penalty for as long as you have Medicare.

What if you have insurance through your current job? If you or your spouse (or family member if you’re disabled) are still working and you’re insured through that employer or a union, contact your employer or union benefits administrator to find out how your insurance works with Medicare. This includes federal or state employment. It may be to your advantage to delay Part B enrollment.

You can sign up for Part B without a penalty any time you have health coverage based on current employment. (Keep in mind that COBRA and retiree health coverage do not count as current health coverage.)

Once your employment (or your employer/union coverage) ends, three things happen:

You may be able to get COBRA coverage, which continues your health insurance through the employer’s plan (in most cases for only 18 months) and probably at a higher cost to you.

You have 8 months to sign up for Part B without a penalty, whether or not you choose COBRA. To sign up for Part B while you’re employed or during the 8 months after employment ends, complete an Application for Enrollment in Part B (CMS-40B) and a Request for Employment Information (CMS-L564). If you choose COBRA, don’t wait until your COBRA ends to enroll in Part B. If you don’t enroll in Part B during the 8 months after the employment ends:

You may have to pay a penalty for as long as you have Part B.

You won’t be able to enroll until Jan. 1–March 31, and you’ll have to wait until July 1 of that year before your coverage begins. This may cause a gap in your coverage.

If you already have COBRA when you enroll in Medicare, your COBRA will probably end. If you become eligible for COBRA after you’re already enrolled in Medicare, you must be allowed to take the COBRA coverage. It will always be secondary to Medicare (unless you have End-Stage Renal Disease).

What if you have TRICARE?

If you have TRICARE and Medicare Part A (hospital insurance), you must have Part B to keep your TRICARE coverage.

If you’re an active-duty service member, or the spouse or dependent child of an active-duty service member:

You don’t have to enroll in Part B to keep your TRICARE coverage while the service member is on active duty.

Before the active-duty service member retires, you must enroll in Part B to keep TRICARE without a break in coverage.

If you have veterans’ benefits, enrolling in Medicare may provide you with additional service and location options. If you don’t keep Part B, you may have to wait to sign up later, and you may pay a late enrollment penalty.

For information about signing up for Part B under certain special conditions, go to http://www.medicare.gov/sign-up-change-plans/get-parts-a-and-b/part-b-special-conditions/part-b-special-conditions.html.

David Sayen is Medicare’s regional administrator for Arizona, California, Hawaii, Nevada, and the Pacific Territories. You can always get answers to your Medicare questions by calling 1-800-MEDICARE (1-800-633-4227).