When Medicare was created in 1965, it consisted of two parts: Part A was free, covered hospitalizations, and was given to everyone who had hit 65 and had worked long enough. Part B covered “everything else” except prescription drugs and had a monthly premium set so that the government paid 80% of the total cost of the program, and enrollees paid the other 20%. Enrollment in Part B was voluntary.
What Is The Current Cost of Medicare Part B?
In 2023, the monthly premium for the vast majority of part B enrollees is $164.90. This is adjusted upward for those with high incomes. (source)
What Alternatives Are Available?
There are alternatives available depending on your specific situation. If you are still working and covered by a health plan from an employer with more than 20 full-time equivalent employees, you can continue on that health plan and not take part B until you either quit working, or the plan renews and requires you to take part B for the renewal.
Many plans are designed to require you to enroll in Parts A and B as soon as you are eligible and become, in effect, “Medigap” policies, covering your Medicare deductibles and copayments and possibly offering some benefits Medicaid does not.
This is affected by your employer’s policies, their health insurer’s policies, and state laws. Check with your Human Resources department for all the applicable details.
Some employer insurance plans offer a rebate of part of your Part B premiums. Check with your plan administrator.
Another alternative is Medicare Advantage (“Part C” of Medicare.) Medicare Advantage Plans replace Parts A, and B (“Original Medicare.”) Medicare Advantage plans may charge no additional premium but require you to enroll in Part B.
Starting in 2019, Medicare Advantage plans may, but are not required to, offer other benefits such as modifications to the home to aid mobility, in-home non-custodial care, and transportation to medical appointments, which are not available under original Medicare.
Although not strictly an alternative to Part B, Medicare Supplement (“Medigap”) plans pay for the Medicare deductibles and copayments and may offer some additional benefits, such as care outside the United States, which Original Medicare does not cover. With a few exceptions, Medicare Supplement Plans are uniform across the United States and are regulated by the Centers for Medicare and Medicaid Services. This Federal government agency runs Medicare.
Keep in mind that prescription drug costs may be the most significant part of your health care costs, depending on your needs and state of health. Original Medicare and Medigap plans do not cover prescription drugs except under limited circumstances. If you are enrolled in Original Medicare with or without a Medigap plan, you should also investigate a Part D plan to cover prescription drugs. These plans are standardized throughout the United States.
If you do not enroll in Medicare Part B or D when first eligible, you may have to pay the penalty in the form of a higher premium when you do register. However, these penalty provisions do not apply if you have been continuously enrolled in a Medicare Advantage Plan and decide to move to Original Medicare.
Now That I Know This, What Steps Should I Take?
Once you are eligible for Medicare, you want to make sure that as much of your medical expenses that Medicare does not cover are taken care of, that any additional services that Original Medicare does not provide are covered, and that all that coverage is at a price that you can afford. Your best course is to consult a professional insurance broker representing multiple plans and programs.