What Is Medicare Part B?
Fact checked Contributing expert: Roseann Birch, insurance consultant; Reviewed by: Leron Moore, Medicare consultant - Updated: Oct 18, 2021
Learn about Medicare Part B benefits, costs, and late enrollment penalties
What you should know
- 1 Medicare Part A provides hospital insurance while Medicare Part B covers medical services such as certain doctors’ services and outpatient care.
- 2 Most people get premium-free Part A, but everyone has to pay a premium for Medicare Part B.
- 3 How much Medicare Part B costs you depends on the income you reported to the IRS two years prior.
- 4 You can decline or delay Part B coverage, but this may result in your paying a higher late-enrollment penalty premium later.
Original Medicare includes hospital insurance through Medicare Part A and medical insurance through Medicare Part B. Part B covers outpatient services such as certain doctors’ services, preventive services, and medical supplies. Unlike Medicare Part A, you must pay a premium for Part B. For this reason, some people choose to delay Medicare Part B coverage.
“There are several misconceptions that can cost you,” explains Jesse Slome, director of the American Association for Medicare Supplement Insurance. For instance, when you first become eligible for Medicare, you’ll likely be automatically enrolled in Medicare Part A, which usually comes at no cost. Still you, but you have the option of delaying Medicare Part B medical insurance.
“If you fail to enroll in Medicare Part B during your initial seven-month window, and don’t have equivalent health insurance through an employer or spouse, you can be subject to penalties in the form of increased premiums when you do enroll in Medicare,” Slome says.
Make sure you understand what you’d be giving up by not getting Part B and how much coverage can cost based on when you enroll.
How is Medicare Part B different from Medicare Part A?
The main differences between Medicare Part A and Medicare Part B are what they cover and how much they cost. Medicare Part A is hospital insurance, whereas Part B is medical insurance. Medicare Part A covers treatments such as inpatient care in a hospital or a skilled nursing facility, as well as eligible home health care. Part B helps pay for medically necessary and preventative services, such as certain doctors’ services, outpatient care, and medical supplies. It can also cover some outpatient prescription drugs under certain circumstances.
Medicare Part A generally comes at no cost for most people. As long as you or your spouse paid Medicare taxes for a certain amount of time while working, you can qualify for premium-free Part A. If you don’t qualify for premium-free Part A, you can purchase it with a monthly premium. In 2021, the premium for Part A was either $259 or $471. Medicare Part B, on the other hand, always has a premium. The amount you pay for Part B will vary based on the income you reported to the IRS two years prior.
Do you need Medicare Part B?
You are not required to get Medicare Part B coverage. Since Part B requires beneficiaries to pay a premium, you have the option of not enrolling. If you choose not to get Medicare Part B during your initial enrollment period and later decide to add it, you could pay a late enrollment penalty.
Your Medicare Part B premium rises by 10% for every 12-month period you are eligible for Part B but don’t sign up for it unless you qualify for a Special Enrollment Period.
“Most people when they are eligible for Medicare should enroll in Part A and B to avoid the late enrollment penalty,” says Esther Sulistio, an independent broker specializing in Medicare insurance at SDInsured.com. “However, in some situations, someone can just have Part A, especially if she qualifies for premium-free Part A, and delay Part B without penalty.”
Individuals who have health insurance from their or their spouse’s current employer may be able to delay enrolling in Part B without paying a penalty.
“With that being said, it’s always a good idea to compare the employer health plan costs and benefits to those of Medicare cost and benefits to see which one gives you better benefits and costs,” Sulistio says.
What does Medicare Part B cover?
Medicare Part B covers two types of services: medically necessary services and preventative services. Medically necessary services include the services and supplies necessary to diagnose or treat a medical condition. Preventative services are health care services to prevent illnesses or detect them in the early stages when treatment has the greatest chance of success.
Part B will generally pay 80% of the Medicare-approved amount of the bill after you reach your deductible.
Medicare Part B covers things like:
- Medically necessary durable medical equipment (DME) prescribed by your doctor for home use, including blood sugar meters, canes, crutches, CPAP devices, and beds.
- Emergency ambulance transportation to a hospital or skilled nursing facility via ground transportation and sometimes airplane or helicopter if ground transportation can’t get you to the hospital fast enough.
- Mental health services, both inpatient and outpatient, plus partial hospitalization if you meet certain requirements.
- Qualifying clinical research studies to test how well different types of medical care work and their safety.
- A limited number of outpatient prescription drugs, namely those you wouldn’t usually give to yourself but rather obtain from a doctor’s office or hospital outpatient setting.
Medicare determines what services it covers based on federal and state laws, national coverage decisions by Medicare, and local coverage decisions by companies in each state that determine if a service is medically necessary. You can find out if Medicare Part B covers a particular test, item or service at Medicare.gov.
“On the search box, just enter in the name and hit enter,” Sulistio says. The results will tell you if the service or procedure is covered or not.
“Medicare eligibles often think that with just Original Medicare Part A and B, it will cover all their healthcare needs,” Sulistio says. “Although it covers many healthcare related services, it does not provide coverage for all items, such as prescription drugs, routine dental, routine vision, hearing (and) cosmetic surgery.” For those benefits, you’d need a Part D prescription drug coverage or a Medicare Advantage plan.
What is the cost for Medicare Part B?
You pay a monthly premium for Medicare Part B. If you receive benefits from Social Security, Railroad Retirement Board, or Office of Personnel Management, this premium will be automatically deducted from your benefit payment. If you don’t receive any of these benefits, you’ll get a “Medicare Premium Bill” every three months.
In 2021, the standard Part B premium is $148.50 per month. Most people pay the standard amount, but individuals with modified adjusted gross income above a certain amount may pay an extra Related Monthly Adjustment Amount (IRMAA). Medicare uses the modified adjusted gross income on your IRS tax return from two years ago to determine your current year Part B premium. So for 2021, Medicare looks at your income from 2019 to determine how much you pay for Part B.
Individuals who earned more than $88,000 in 2019 paid an IRMAA in 2021 ranging from $59.40 to $356.40. The highest premium paid for Medicare Part B in 2021 is $504.90 for individuals who earned $500,000 or more in 2019 or married couples filing jointly who earned $750,000.
You can pay your Medicare bill online through your Medicare account, directly from your bank account using bill pay, through Medicare Easy Pay, or by mail.
Medicare Part B also has a deductible that you must meet before coverage begins. In 2021, the Medicare Part B deductible is $203. Once you meet this deductible, Medicare will typically pay 80% of the Medicare-approved amount for doctor’s services, outpatient therapy and DME.
“One of the disadvantages to Original Medicare is there is no limit or cap on the amount you could pay in a calendar year,” Sulistio says. To protect yourself financially, she recommends enrolling in a Medicare Advantage plan or Medicare Supplement.
“This will minimize your health care expenses,” she says.
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Roseann Birch, Medicare Consultant
With experience in the insurance field since 1986, Roseann Birch is a seasoned Medicare consultant who is passionate in educating and guiding seniors through their Medicare and Medicare Advantage journey.
Leron Moore, Medicare Consultant
With over 10 years of experience in the Medicare industry, Leron Moore has dedicated his career to effecting change, educating, informing, and resolving issues for Medicare patients and their families.