Do I Need Medicare Part B if I Am Working With Group Insurance?

Medicare Part A and Medicare Part B are the basic health insurance coverages offered through Medicare. You automatically qualify for Medicare Part A benefits,covering hospital, hospice and certain home health care, if you have 40 quarters of qualifying employment or receive Social Security benefits. There is no premium for Part A coverage. There is a premium for Part B coverage, so you may wonder, if you are covered by a medical plan at work, whether it makes sense to sign up for Part B coverage.

Medicare Part B Coverage

• Medicare Part B is medical insurance that covers medical services outside the hospital like doctor visits, lab testing and imaging, preventive services and some home health care. Even though Part B coverage is considered voluntary, you will be automatically enrolled in the program on your 65th birthday if you meet all eligibility requirements. You will normally receive your Medicare card about three months before your 65th birthday. Instructions will come with the card explaining how to send your card back if you do not want Part B coverage.

Coordination of Benefits

• If you are still working, and you have a group insurance policy, the decision as to whether to sign up for Part B coverage will partly depend on how your employer's coverage works with Medicare. According to the handbook "Medicare and You," your best resource is your company's medical plan administrator. Some plans may coordinate benefits with Medicare Part B, covering deductibles and copays, but others may drop your coverage when you become eligible for Medicare.

Costs

• If you are required to pay anything toward your group insurance premiums with your employer, you should compare the Medicare Part B premium. For 2011, Part B premiums will continue at $96.40 per month for most individuals who have their premiums withheld from their Social Security benefits each month, and $110.50 if you pay on your own. As of 2011, those earning more that $85,000 for a single person or $170,000 for a married couple, may pay more than the $110.50 per month. So, depending on what you earn at your job, this could make a difference. Medicare Part B also has an annual deductible of $162 as of 2011 and a copay of 20 percent except on preventive care. If your employer will allow you to continue under a managed care plan, like an HMO or PPO, that could be better than Part B Medicare.

Considerations

• Although you are not required to sign up for Medicare Part B, if you decide to do so later on, you might be subject to a late penalty. If you did not sign up for Medicare Part B because you were covered under a group insurance plan, you can avoid this penalty as long as you sign up for Part B within eight months of the end of your group insurance coverage. If you miss this eight-month period of time and sign up for Part B later, you have to pay a penalty of 10 percent, over and above your Part B premium, for every year you did not enroll starting from the time you were eligible to do so.