Do I need Medicare Part B if I have retiree medical insurance through my former employer?

Gradyh asked...

I'm retired and have health insurance through my former employer. Do I need Medicare Part B, and should I still be paying for it out of my Social Security benefits?

Expert Answer

The answer depends in part on the rules of your retiree health coverage. Employers aren't required by law to maintain health coverage for retired workers. So, if they do provide coverage, they can make almost any rules they want. Some employer-sponsored health insurance plans require Medicare-eligible retirees to enroll in Medicare Part A and Part B. In this way, Medicare pays for a substantial portion of health care costs and the employer-sponsored insurance only has to cover some of what Medicare doesn't pay. So, before you drop your Medicare Part B coverage, find out from your employer-sponsored health plan whether it requires you to maintain your Medicare Part B enrollment.

Even if your employer-sponsored plan doesn't require you to remain enrolled in Medicare Part B, it may be a good idea to keep it if the employer-sponsored insurance coverage leaves a lot of health care costs unpaid. If you have high out-of-pocket costs with your employer-sponsored retiree coverage, the monthly fee for Medicare Part B ($96.40 for most people in 2008) may be well worth the extra coverage it provides.