June 7, 2022

You Can Avoid Common Medicare Part B Mistakes — Here’s How

By Charris Nelson, Certified Senior Advisor

You Can Avoid Common Medicare Part B Mistakes —  Here’s How

Applying for and utilizing Medicare Part B insurance can be confusing and mistakes are common. If you enroll in Medicare Part B insurance, you should not pay a penny more than you need to.

Medicare Part B insurance covers supplies and services that are medically necessary to treat a health condition. This can range from preventive services, outpatient care, and ambulance services to medical equipment, part-time or intermittent, home health care, and rehabilitation services (e.g., physical therapy) and more.

Below are hypothetical scenarios to help you navigate the process, plus examples of costly mistakes. Note that I recommend each individual consult Medicare customer service and/or a knowledgeable professional before enrollment as other rules may apply for those who are on Medicare disability or with end-stage renal disease.

Say you are still working when you turn 65 and become eligible for Medicare. You sign up for Part A by calling Social Security or applying online. Part B   is optional and it is required election of it will depend on how many people work at your company. Even if you are drawing Social Security at age 65 and are automatically enrolled in Medicare, Part B is still optional; therefore, you may be able to postpone Medicare Part B enrollment if you continue working.

If you work for a business or organization with 20 or fewer workers and you have health insurance, you should sign up for Part B. In 2022, the fee for Part B is $170.10 per month for individuals who earn $91,000 a year or less ($182,000 for married couples). It can range as high as $578.30 per month for individuals who make more than $500,000 per year ($750,000 for   married couples). Medicare will be your primary insurance provider, and the coverage your work provides will be secondary.

If you work for a company that provides health insurance and has more than 20 employees, its coverage continues, and you will not necessarily need to enroll in Part B. 

However, you must enroll in Part B within eight months of a status change at the company, or you will face a penalty — namely, a higher Part B premium for the rest of your life.

Here are the status changes that trigger a possible penalty:

If you retire, you must enroll in Part B whether or not the company provides retiree coverage.

If you were laid off or have retired and file for COBRA to continue your health insurance, you still have to enroll in Medicare Part B.

If you had coverage through your spouse, and your spouse was laid off or retires, you can continue health coverage through COBRA but you must file for Medicare Part B. The same rule applies if you get divorced and are keeping coverage through COBRA — you still need to enroll in Part B.

Too often, I see people who enrolled in Part B unnecessarily because their employer’s coverage remained primary. This costs, at the very least, an extra $170.10 per month. Higher earners could be looking at an unnecessary annual Medicare Part B payment of $6,939.60.

Here is an example: A client did not seek advice about Medicare enrollment at age 65 — he waited until he retired at age 68. He incorrectly assumed he needed Medicare Part B at age 65 and paid three years of Part B premium payments, an estimated cost of $20,000 at 2022 premiums. Since his employer had more than 20 employees, he could have waited to enroll in Part B until he retired and lost his employer coverage, which would have saved him the $20,000.

Unfortunately, there is no reimbursement for overpaid premiums resulting from such a mistake. 

It is also important to be mindful of your filing status. Married couples who file separate tax returns may risk being placed in a higher Medicare Part B premium category than if they filed jointly. 

Please refer to the chart below for 2022 Medicare Part B premiums.

The standard Part B premium amount in 2022 is $170.10. Most people pay the standard Part B premium amount. If your modified adjusted gross income as reported on your IRS tax return from two years ago is above a certain amount, you’ll pay the standard premium amount and an income related monthly adjustment amount (IRMAA). IRMAA is an extra charge added to your premium.

If your yearly income in 2020 (for what you pay in 2022) was
You pay each month (in 2022)
File individual tax return
File joint tax return
File married & separate tax return
$91,000 or less
$182,000 or less
$91,000 or less
above $91,000 up to $114,000
above $182,000 up to $228,000
Not applicable
above $114,000 up to $142,000
above $228,000 up to $284,000
Not applicable
above $142,000 up to $170,000
above $284,000 up to $340,000
Not applicable
above $170,000 and less than $500,000
above $340,000 and less than $750,000
above $91,000 and less than $409,000
$500,000 or above
$750,000 and above
$409,000 and above

Do you have questions about Medicare Part B? Please contact Charris Nelson, Medicare Specialist at 440-459-5942.


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