Medicare Part B Explained
Since 1965, when Congress amended the Social Security Act, turning 65 can be a good thing, at least in terms of health insurance. Once you hit this milestone, you’re eligible for Medicare, the federal health insurance program designed for seniors. Medicare is also available to people under age 65 with specific medical conditions and those who receive benefits already from Social Security or the Railroad Retirement Board.
Medicare has four parts: A (hospital insurance), B (medical insurance), C (Medicare Advantage, which is offered by private companies), and D (prescription drug coverage). Parts A and B are generally well-known to the public. Together, A and B form original Medicare.
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What Does Part B Cover?
Part B covers all medically necessary services, including any care by a doctor, as well as supplies. In addition, Part B also covers:
- Services and supplies such as X-rays or physical therapy that are required to diagnose and/or treat a medical condition
- Care by a doctor at his or her office, hospital, or other healthcare facility
- Use of an ambulance
- Services that detect illness at an early stage or to prevent illness, such as flu shots or cancer screenings
- Some types of home health care
- Some mental health care
When and How Does Part B Coverage Begin?
If you’re already receiving Social Security befits when you turn 65, the Social Security Administration will automatically enroll you in Part B coverage. For those with a birthday on the first day of the month, Medicare coverage begins the first day of the previous month. If you have a disability such as Amyotrophic Lateral Sclerosis, more commonly known as Lou Gehrig’s disease, you will automatically start Part B Medicare coverage the same month as you start receiving disability benefits.
If you have a disability and are under the age of 65, you will start getting Part B benefits automatically after you have been getting benefits form Social Security or the Railroad Retirement Board (RRB) for 24 months.
An automatic enrollment in Medicare means that the red, white, and blue Medicare card will be mailed to you three months prior to your 65th birthday or three months before your 25th month of disability benefits.
You will need to sign up for Medicare coverage if:
- You don’t qualify for automatic enrollment and you turn 65.
- You have end-stage renal disease (ESRD) and therefore are eligible for coverage.
- You are not getting Social Security benefits when you turn 65, most likely because you’re still working.
- You live in Puerto Rico, where you automatically get Part A but want to sign for Part B, which is not automatic.
If you qualify for Medicare Part B based on age, then you’ll be eligible to enroll during a 7-month initial enrollment window. This period runs for three months before the month you turn 65, the month you turn 65 and three months after your birthday month.
Once you sign up for Part B, you don’t have to renew the plan each year, but you should review your coverage annually to make sure it’s still working for you.
Everyone on Medicare has a yearly chance from October 15 through December 7 to drop their Medicare Part B plan (part of original Medicare) and enroll in a Medicare Advantage (Part C) plan. This is called the open enrollment period. Medicare Advantage plans offer the same benefits as Part B and Part A combined along with additional benefits for added costs. Once you drop Part B, however, it cannot be picked back up until the following general enrollment period for original Medicare, which lasts from January 1 through March 31.
If you do not enroll in Part B when first eligible for Medicare benefits, you can also enroll for the first time during the general open enrollment period (January 1 through March 31). You may be charged a penalty fee for late enrollment if you sign up outside of your initial eligibility window.
What Does Part B Medicare Cost?
The amount you pay for Medicare Part B each year depends on your income on your tax return two years before you enroll. So if you’re signing up for coverage that will start in 2025, you’d look at your 2023 tax return to gauge your monthly premium.
Most people pay the standard premium rate – $174.70 a month in 2024 – but there are some exceptions. Higher-income enrollees pay more, for example, and people who were held harmless by the Bipartisan Budget Act of 2015, which was estimated to only be approximately 3.5 percent of Medicare beneficiaries, paid less than the standard in 2019 ($109 a month). In 2025, the standard Part B premium increases to $185.00 a month.
You’ll also pay a deductible for Part B coverage, which is $240 for the year in 2024 ($257 in 2025).
There may also be a late enrollment penalty if you don’t sign up for Part B when you’re first eligible. The fee is 10% added to your monthly premium for every twelve-month period that you could have enrolled in Medicare but didn’t. For instance, if you waited two full years (24 months) to enroll in Medicare Part B after first turning 65, your premium would be increased by 20 percent. The fee lasts for as long as you have Medicare Part B coverage.
Part B also requires 20% coinsurance on most covered services once you meet the annual deductible, and there’s no yearly cap on out-of-pocket costs. There are some services that don’t require the coinsurance.
Note: as of 2023, Medicare enrollees who only have Medicare because of end-stage renal disease (ESRD) and who undergo a successful kidney transplant can now enroll in a limited form of Part B coverage 36 months after the transplant (when full Part B benefits end). Coverage under this benefit is limited to immunosuppressive drugs. The premium is $103 a month in 2024. In 2025, it’s $110.40 a month. Deductibles and cost-sharing rules under Part B still apply to this limited coverage.
How Do You Know If You Are Adequately Covered by Medicare Part B?
If you are unsure whether you are carrying Part B Medicare coverage, check your Medicare card. If you have the coverage, it will be listed. If you do not have it, you can get it, although the costs may be higher if your initial enrollment period has ended. Premiums for Part B Medicare depend on your income.
Coverage for Medicare is based on:
- Federal and state laws
- Decisions at the national level concerning what should be covered under Medicare
- Decisions made at local and state levels by companies engaged in processing Medicare claims
To find out if your coverage is adequate, check with your doctor or other healthcare provider. If you need something that Medicare doesn’t cover, you may have to agree that you will pay for certain items or extra services. You can also check directly with Medicare about your coverage by calling 1-800-MEDICARE.