Medicare Part B Coverage and Costs Explained

When you first enroll in Medicare, you’ll enroll in Parts A and B, which make up Original Medicare. Part B is your medical, or outpatient, insurance, and has a monthly premium of $164.90 in 2023. If you’re still working, you may be able to delay your Part B enrollment without risk of penalty (more on this later). Once you have enrolled in both Part A and Part B, you’re able to explore additional Medicare insurance options, like Medigap, Medicare Advantage, and prescription drug coverage (Part D). 

Below, you’ll find information on Part B coverage, cost, enrollment process, and penalties. 

What does Part B cover?

Medicare Part B is medical, or outpatient, insurance. It covers a wide range of medically necessary services and supplies required to prevent, diagnose, or treat various medical conditions. Part B is available to Americans who meet Medicare’s age or disability requirements. Below is a list of the most common services Part B covers:

• Doctor’s visits, consultations, and treatments

• Outpatient care, including surgeries, diagnostic tests, X-rays, and lab work

• Preventive services, such as screenings, vaccinations, and counseling services

• Emergency ambulance transportation

• Durable medical equipment, such as wheelchairs, walkers, and oxygen supplies

• Medications administered in outpatient settings, such as chemotherapy drugs or injectable medications

Understanding the coverage provided by Medicare Part B can help you access essential medical services and supplies.

How much does Part B cost?

Part B premium

To secure Part B coverage, you’ll need to pay a monthly premium. In 2023, the standard Part B Premium that most retirees pay is $164.90. 

If your income is above a certain amount, you'll pay an income-related monthly adjustment amount (IRMAA) in addition to your Part B premium. Learn more about IRMAA for Part B and Part D.

Deductible

An annual deductible must also be met before Medicare Part B pays its share. After you meet the deductible, you’re generally responsible for paying a coinsurance or copayment amount for the covered services. The deductible for Part B in 2023 is $226.

Other out-of-pocket costs

Once you meet the deductible, Part B covers 80% of the cost of covered services, and you are responsible for the remaining 20%. This is known as coinsurance. There may also be copays for certain services, such as doctor visits. For this reason, it’s worth considering additional Medicare insurance options (Medigap, Medicare Advantage, and prescription drug plans) to control your out-of-pocket costs. 

Part B enrollment

When to enroll

When to enroll is dependent on your situation. 

1. Most individuals become eligible for Part B when they are 65. If you are receiving Social Security benefits or retirement benefits from the Railroad Retirement Board, then you are automatically enrolled in Medicare Part B and no action is necessary. 

2. If you are under 65 and receiving cash disability benefits for at least 24 months, no action is necessary and you are automatically enrolled in Medicare Part A and Part B. 

3. If you are 65 or older but waiting to draw Social Security, taking proactive steps to enroll in Part B is crucial if you want coverage. You can enroll during your Initial Enrollment Period (IEP) for Part B, which begins three months before and lasts three months after your 65th birthday. During this period, you can enroll in Part B without any penalties.

4. If you’re still working and intend to remain on your employer’s health insurance, then you can sign up for Part A and wait to sign up for Part B by way of the Special Enrollment Period. 

Avoiding Part B penalties

Something to consider is that if you delay Part B enrollment and are not eligible for a Special Enrollment Period, you may experience gaps in coverage and have to pay late enrollment penalties. The penalty is 10% of your monthly premium for every year you’ve waited to enroll – and that’s on top of your monthly premium! To avoid this penalty, make sure you’re aware of when your IEP is and if you qualify for Special Enrollment. 

How to enroll

• The quickest way to sign up for Medicare benefits is to apply online on the Social Security website 

• Call Social Security at 1-800-772-1213

• Contact your local Social Security office.

• Call the Railroad Retirement Board at 1-877-772-5772 if you or your spouse worked for the railroad 

Keeping track of all of the different parts of Medicare and finding what’s best for you can feel overwhelming. We’re here to help! If you have questions or want assistance with your Medicare decisions, don’t hesitate to reach out to one of our licensed Advisors! 

Give us a call at (855) 900-2427 or click here to schedule an appointment at your convenience.