Key Takeaways

• Medicare Part B comes with unexpected rules and costs that can impact your retirement healthcare budget if you’re not prepared in advance.

• Delays, income-related penalties, and gaps in coverage are among the top surprises beneficiaries face in 2025.

Not Everyone Is Automatically Enrolled

You might assume that Medicare Part B begins the moment you turn 65, but that isn’t always true. Automatic enrollment only happens if you’re already receiving Social Security or Railroad Retirement Board benefits at least four months before your 65th birthday. If you’re not, you must actively sign up.

Failing to enroll on time can result in a delay in coverage and possible late enrollment penalties that last for life. That’s why understanding your Initial Enrollment Period (IEP) is essential:

• The IEP begins three months before the month you turn 65

• It includes your birth month

• It ends three months after your birth month

In 2025, missing this seven-month window without having creditable coverage elsewhere can lead to long-term consequences.

You May Pay More Than the Standard Premium

While most people focus on the standard Part B premium—$185 per month in 2025—not everyone pays that amount. If your income exceeds certain thresholds, you’ll be subject to the Income-Related Monthly Adjustment Amount (IRMAA).

The IRMAA in 2025 starts if your modified adjusted gross income (MAGI) exceeds:

• $106,000 for individuals

• $212,000 for married couples filing jointly

This means higher earners will pay more each month, and these surcharges are based on your income from two years prior—your 2023 tax return for 2025 premiums. If your income drops due to retirement, you can file an appeal using Form SSA-44, but many people miss this opportunity.

Delaying Part B Can Backfire

There’s a common belief that you should delay Medicare Part B if you’re still working past age 65. That’s true in some cases—but not all. The key lies in whether your employer coverage is considered creditable and how many employees your company has.

Here’s what you need to know in 2025:

• If your employer has 20 or more employees, you can delay Part B without penalty while still working.

• If your employer has fewer than 20 employees, Medicare becomes primary, and delaying Part B could leave you with no primary coverage.

Even if you’re covered under your spouse’s plan, the same rules apply. Always confirm whether the plan is considered creditable before deciding to delay enrollment.

The Late Enrollment Penalty Doesn’t Go Away

If you delay enrolling in Part B and don’t have creditable coverage, Medicare applies a penalty to your premium. The penalty is 10% for each 12-month period you should have had Part B but didn’t. Worse, this penalty is permanent—you pay it for the rest of your life.

For example, if you delay enrollment for two full years without creditable coverage, you’ll pay 20% more on your premium every month. In 2025, that could mean paying $222 per month instead of $185.

The General Enrollment Period (GEP) runs from January 1 to March 31 each year. If you miss your IEP and don’t qualify for a Special Enrollment Period, this is your only chance to enroll. Your coverage will begin the month after you enroll.

Part B Doesn’t Cover Everything

It’s easy to assume that Part B will meet all your outpatient healthcare needs. In reality, it covers only specific services and often includes deductibles and coinsurance.

Here’s what’s covered in 2025:

• Doctor visits (including primary and specialists)

• Preventive services (like screenings and vaccines)

• Durable medical equipment (DME)

• Outpatient mental health care

However, it does not cover:

• Prescription drugs (you need a separate Part D plan)

• Long-term care or custodial care

• Most dental, vision, or hearing services

You’ll also be responsible for the annual deductible ($257 in 2025) and 20% of the Medicare-approved amount for most services after the deductible is met.

Medical Emergencies Abroad Are Not Covered

Medicare Part B provides excellent coverage inside the U.S., but if you travel abroad and experience a medical emergency, Part B will not help you. This comes as a shock to many retirees planning international travel.

To protect yourself, you may need a supplemental insurance plan that includes emergency coverage outside the U.S. Some Medigap plans and employer-sponsored retiree plans offer this benefit, but original Medicare alone does not.

COBRA and Retiree Coverage Can Mislead You

Many people incorrectly assume that COBRA or retiree health coverage counts as creditable coverage for delaying Medicare Part B enrollment. Unfortunately, this is not true.

In 2025, the rules remain clear:

• COBRA coverage is not considered creditable for delaying Part B

• Retiree health plans typically don’t count either

If you delay enrolling in Part B while relying on either of these, you could face a lifetime penalty and a coverage gap. Medicare treats these plans as secondary, not primary. You must enroll in Part B for your COBRA or retiree coverage to work as intended.

You Can Get Billed Even if You Don’t Use Services

One of the more surprising aspects of Part B is that you pay your monthly premium regardless of whether you use any medical services. Unlike other types of insurance that may refund unused portions, Medicare doesn’t operate that way.

If you enroll in Part B, you’ll be billed each month—even if you don’t see a doctor, receive lab work, or undergo a procedure that month. This makes budgeting essential, especially for those living on a fixed income.

Enrollment Mistakes Can Limit Future Options

Delaying or mishandling Part B enrollment can also restrict your ability to enroll in other Medicare options later. For instance:

• Some Medigap plans require you to enroll within six months of your Part B start date without medical underwriting.

• Medicare Advantage plans generally require active enrollment in both Parts A and B.

If you miss your enrollment windows, your choices narrow significantly. You could face higher premiums or be denied Medigap coverage altogether based on your health status.

Medicare Premiums Can Be Deducted Automatically—But Not Always

While many people have their Part B premiums automatically deducted from their Social Security benefits, this doesn’t apply to everyone. If you’re not yet receiving Social Security, you’ll receive a quarterly bill instead.

In 2025, you’ll pay these quarterly premiums via:

• Online bill pay

• Medicare Easy Pay (automatic bank drafts)

• Check or money order

This can trip up people who assume their premiums are already being paid. If you miss these payments, you risk losing coverage.

Life Changes Affect Your Costs

Marriage, divorce, spousal death, and retirement can all impact your Part B premium if you’re subject to IRMAA. These events may qualify you for a reconsideration of your income bracket, potentially reducing your premium.

If any of these events occurred in the past two years, you should notify Social Security and request an income review using the appropriate forms. Not doing so can result in you paying more than necessary.

You Might Not Need Part B at 65—But Only in Specific Cases

If you have coverage through a current employer (yours or your spouse’s) and it qualifies as creditable, you may not need to sign up for Part B right at age 65. But once that employment ends—or the creditable coverage does—you’ll need to act quickly.

You’ll have an eight-month Special Enrollment Period (SEP) after losing employer coverage to enroll in Part B without penalty. However, waiting until the end of that SEP could still leave you with a temporary gap in coverage.

Awareness Now Helps Avoid Regret Later

You may not be able to control every aspect of Medicare Part B, but you can control how prepared you are for its unexpected twists. Knowing your enrollment windows, how penalties work, and the role of employer coverage will protect your financial stability in retirement.

It’s better to ask the questions now than to face the consequences later. The more you know, the fewer surprises you’ll face.

Learn the Rules Before They Cost You

There’s no denying that Medicare Part B is full of small details that lead to big consequences if missed. But with the right information, you can protect yourself from penalties, delays, and gaps in care.

Have questions about your situation? Speak with a licensed insurance agent listed on this website to get personal guidance tailored to your needs.