Although it’s not strictly speaking necessary to have Medicare Part B, deferring it can be somewhat complicated. Choosing not to enroll in Part B health insurance from Medicare can result in late penalties later on, and these can be more severe than you would expect. If you want to not enroll in Part B at all, we’ll take a look at what your options are.

What exactly is Part B?

Part B is one of the parts of so-called “Original Medicare”. This is the basic bundle of Medicare coverage that is provided by the federal government. Original Medicare is comprised of Medicare Part B as well as Part A, which covers your hospital insurance.

Medicare Part B covers medically-necessary outpatient health care. These are things like ordinary doctor visits, as well as durable medical equipment and in-home care in some instances. Unlike Part A, which comes in a premium-free version, most people have to pay a monthly premium for Medicare Part B. The standard Part B premium is $174.40, but it can be higher depending on your income. For the sake of convenience, this can be deducted from your monthly social security retirement benefits, to make enrolling easy.

Because Part B provides such a central and basic type of health coverage, most people choose to not enroll only if they have an alternative form of health insurance, like a group plan from their employer. When it comes to Part B, doing this can result in some late penalties, which we’ll discuss in more detail below.

Choosing Part B: Understanding enrollment periods

Unlike other forms of medical insurance, you can’t enroll in Medicare easily whenever you want. Instead, Medicare uses something called enrollment periods. These are periods of time during which you can enroll in or change your Medicare coverage without penalty. In some cases, you may not be able to enroll in a Medicare plan at all outside of an enrollment period. However, usually, you will have to pay a penalty.

There are many enrollment periods that all function differently, and it’s important to understand them all. We’ll cover the initial enrollment period first.

Understanding your Initial Enrollment Period

One of the most important enrollment periods to understand is the initial enrollment period. During the initial enrollment period, you can enroll in Parts A and B of Medicare very easily and with no late penalty. If you already receive social security benefits, this enrollment will be automatic for you. This means that if you don’t want to enroll, you’ll have to explicitly reach out to social security. Otherwise, they will take the monthly premiums out of your benefit check.

The Initial Enrollment Period lasts for seven months, and consists of three months before your 65th birthday month, your birthday month itself, and three months after. For example, if your birthday is in August, then your Initial Enrollment Period will consist of May, June, July, August, September, October, November. This will be the same no matter when in August your birthday is.

Initial Enrollment for Part C (Medicare Advantage) Plans

At this point, it’s useful to take a look at Medicare Advantage health plans. If you’re not familiar with Medicare Advantage plans, also known as Part C plans, they are insurance plans that allow you to use your Medicare benefits to get private insurance. These plans are HMO or PPO plans with a provider network, but you can use your Medicare benefits to pay for them. Most offer additional benefits or perks. Part C plans are a complex topic, so we won’t go into them in detail here.

The important thing to note is that you can choose to enroll in a Part C plan during your initial enrollment period. If you enroll in a Part C plan, you won’t have Medicare Part B. However, much of the coverage is the same, as Part C plans are required to cover at least what Medicare Parts A and B cover.

Medicare Advantage Open Enrollment

If you enroll in a Medicare Advantage plan during your Initial Enrollment Period, you can switch to Original Medicare during the Medicare Advantage Open Enrollment Period, which lasts from January 1 to March 31 of every year. During this period, you can drop your Part C plan with no penalty. If your Part C plan contains a drug plan, you can also add on a Medicare Part D prescription drug plan to your Original Medicare coverage.

Initial Enrollment and Medigap plans

Medigap plans, also called Medicare Supplement plans, are private plans that cover many of your out-of-pocket expenses under Original Medicare, like your coinsurance and copayments. These plans vary in price but are standardized plans that offer the same coverage throughout the country. You can read more about the specific coverage options here.

The important thing to remember about Medigap enrollment is that it can be subject to underwriting. This means that you may be denied coverage if you have certain medical conditions. However, during your initial enrollment period, you can’t be denied coverage. If you do enroll in Original Medicare during your Initial Enrollment and decide that you want a Medigap plan, this is the best time to get one.

What is the General Enrollment Period?

The General Enrollment Period is a fixed period each year during which you can enroll in Medicare. If you didn’t enroll in Medicare and aren’t in a Special Enrollment Period (to be discussed later), then the General Enrollment Period is the only time of the year during which you can enroll in Original Medicare. Because missing this period means having to wait until the following year, make sure that you schedule your enrollment in advance, so you don’t have any gaps in your coverage.

The General Enrollment Period lasts from January 1 to March 31 of every year. If you enroll in Medicare Part A or Part B during that time, your coverage will begin on the first of the month following the month you enroll. You can switch from Original Medicare to Medicare Advantage during this period, add on a Medigap plan, or enroll in Original Medicare for the first time.

How do Special Enrollment Periods work?

Special Enrollment Periods are a bit more complicated than the other periods we’ve discussed, but are very useful to know about. These periods are specific to you and are triggered by certain life events. This includes things like moving out of state, moving out of long-term care facility, or losing your current creditable coverage. The purpose of Special Enrollment Periods is to make sure that you can add on Medicare coverage if you suddenly find yourself in a new scenario, so you don’t have to wait until the General Enrollment Period.

Special Enrollment Periods are 60 days long. However, they will vary with regards to whether the 60 days is before or after the event in question. If you know that one of these life changes is on the horizon for you, make sure to contact Medicare in advance to get the details. And, if a change comes unexpectedly, contact them right away, so you can take advantage of Special Enrollment as soon as you can.

Part B Special Enrollment: Is it any different?

To make enrollment periods just a bit more confusing, we can also add Part B Special Enrollment to the mix.

The Part B Special Enrollment Period is used to defer your Part B coverage to a later time if you are covered by an employer group plan at the time that you become eligible for Original Medicare. The Part B Special Enrollment Period is 8 months long and begins when your employer-based coverage ends. It's important to note that COBRA plans don't count as employer-based coverage. This can be tricky to understand, so let’s look at an example.

John turns 65 in August of 2024. So, his Initial Enrollment Period lasts from May of 2024 until November of 2024. However, his current employment offers a group plan at that time, so he doesn’t enroll in Medicare Part B. In April of 2026, which is after the General Enrollment Period, John retires from his job, and loses his employer-based coverage.

Starting in April, John qualifies for a Special Enrollment Period that gives him 8 months to enroll in Medicare Part B, even though this would normally be outside of any of the fixed enrollment periods, and is past his Initial Enrollment Period. If John enrolls during this period, he won’t have to pay any penalty fees.

How much is the Part B Late Enrollment Penalty?

The late penalty for Part B can be severe for many people, and as you can see, there are only a few ways to get around it. If you simply don’t accept Part B insurance during your Initial Enrollment Period and don't have credible coverage elsewhere, then you’ll have to pay the late penalty unless you qualify for a Special Enrollment Period for Part B. However, we often have to deal with late fees in life: is this case really so bad?

Unfortunately, the Part B penalty is fairly severe. For each 12-month period that you could have had Part B insurance but weren’t enrolled, your monthly premiums will go up 10%. That means that you pay 10% for one year, 20% for two years, 30% for three, and so on. For most people, this price increase will never go down: you will always pay a higher monthly premium.

The fact that the late enrollment penalty is there with you for life is one of the main reasons why so many people choose to just enroll in Part B automatically. If any mistakes are made, you could end up paying significantly more for your health insurance over the years. However, if you understand how to use your Part B Special Enrollment Period, this can be avoided.

So, is Medicare Part B mandatory?

The most straightforward answer to this question is no, Part B is not mandatory. However, it can be costly to delay Part B enrollment until after your Initial Enrollment Period, and many people choose to not take the risk. If you don’t want to enroll in Part B, make sure that you understand the risks and costs, as well as what your options are. As we discussed above, there are some ways to do this, you just need to understand the timelines and methods to make sure that you don’t have to pay the late fees later on.

Additional resources

• ClearMatch Medicare: Find a Medicare Plan
• Medicare.gov: Costs
• Social Security Administration: Extra Help