Once you’re eligible for Medicare, you’ll need to make a choice about how you get your benefits. That’s because Medicare comes in four parts: Part A (hospital coverage), Part B (medical coverage), Part C (also called Medicare Advantage), and Part D (prescription drug coverage).
Together, Parts A and B form Original Medicare. Part D is standalone drug coverage for those with Original Medicare, while Medicare Advantage is its own private version of Medicare.
You might be familiar with these parts, or maybe you’re new to the program and aren’t sure what any of this means. Here, we’ll talk about Medicare Part B, which is the medical portion of Original Medicare.
What Does Part B Cover?
Medicare Part B covers medically necessary outpatient care, services, equipment and supplies. That includes things like:
- Doctor visits
- Vaccines, including your annual flu shot
- Ambulance rides
- Cancer screenings and other preventive care
- Durable medical equipment, such as wheelchairs
- Some mental health care
Part B is your medical coverage under Original Medicare, so it covers quite a range of care and services. But there are certain things that Part B doesn’t cover, such as:
- Prescription drugs (generally)
- Routine dental, vision or foot care
- Hearing aids or the exams to fit them
- Cosmetic surgery
- Most acupuncture
- Long-term care (custodial care)
Medicare Part B only covers a set amount of specific outpatient drugs. These are drugs that you normally wouldn’t give to yourself, like chemotherapy treatments administered in a clinical setting. Neither part of Original Medicare covers the kind of drugs you pick up at a pharmacy, like blood pressure pills or insulin. To cover prescription drugs, you need a Part D plan or a Medicare Advantage plan with prescription drug coverage.
If you want to check whether something’s covered under Medicare Part B, visit the Medicare website or, better yet, download the What’s Covered app created by Medicare. The app has a menu of things that Original Medicare covers, or you can search the app for a specific thing using the search bar and it’ll tell you whether something’s covered or not.
When and How Does Part B Coverage Begin?
When and how your Medicare Part B coverage begins depends on your situation, i.e., when and how you qualify for Medicare. Some people get enrolled automatically while others need to enroll themselves.
You get automatically enrolled into Medicare Part B if:
- You’ve been getting retirement benefits from Social Security or the Railroad Retirement Board for at least four months before you turn 65.
- You’ve been getting disability benefits from Social Security or the Railroad Retirement Board for 24 months, whether you’re 65 or not.
Not everyone who gets Medicare is eligible based on age. Some younger people with certain disabilities can get Medicare benefits, too. If you’re under 65 and/or have a disability, you’ll need to apply for disability benefits through Social Security or (if applicable) the Railroad Retirement Board.
Once you’ve been getting disability benefits for 24 months, you’ll be enrolled in both Part A and Part B on the 25th month of getting those benefits. This applies to all disabilities except for end-stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS or Lou Gherig’s disease).
For people with ESRD, Medicare enrollment is not automatic. You’ll need to sign up for Parts A and/or B if you want the coverage. For those with ALS, enrollment for Part A and Part B is automatic and benefits start the same month you start receiving disability benefits (no 24-month waiting period).
These guidelines also apply only to people in the United States. For Medicare-eligible people in Puerto Rico or living outside the U.S., enrollment into Part B is not automatic. You’ll need to contact Social Security to enroll.
If none of the above scenarios apply to you, then you most likely need to sign up for Medicare Part B yourself. This includes:
- People who are eligible based on age (65);
- Those with ESRD who are eligible for coverage but aren’t enrolled automatically; and
- People who aren’t getting Social Security benefits by the time they’re eligible for Medicare, most likely because they’re still working.
Because you have to enroll yourself, you’ll need to know when to do it. If you qualify based on age, you have an initial enrollment period (IEP) during which you can sign up for both Part A and Part B. This IEP runs for a total of 7 months: 3 months before the month you turn 65, the month you turn 65 and the 3 months after.
So, for example, if your birthday is June 12th, your initial signup window for Medicare will run from March 1st through September 30th of the year you turn 65. You have a full 7 months to enroll in Part B when you’re first eligible for the coverage.
For people with end-stage renal disease, enrollment may be different. Check out this info from Medicare on ESRD eligibility and enrollment, or contact Social Security directly to learn how to sign up.
Outside of your initial eligibility window, you can enroll in Medicare Part B during the General Enrollment Period. It runs from January 1st through March 31st each year. If you use this period to sign up, though, you may owe a penalty on top of your premium (see section on costs for more info).
How Much Does Medicare Part B Cost?
How much you pay for Medicare Part B depends on your income. Part B also comes with out-of-pocket costs in the form of an annual deductible and coinsurance for the services you get. In 2023, the cost of Part B includes:
- A standard monthly premium of $164.90
- An annual deductible of $226 and
- 20% coinsurance on covered services
For people enrolled before 2021, Social Security’s “hold harmless” provision lowered the monthly premium for Part B. That rule doesn’t apply to new applicants, but you can read more about it here if you’re interested.
New for 2023: We also want to note a new benefit for people with end-stage renal disease (ESRD). Starting in 2023, people who qualify for Medicare solely based on ESRD can now buy a limited Part B benefit just to cover the cost of immunosuppressive drugs.
Before, people with ESRD became ineligible for Medicare Part B 36 months after a successful kidney transplant, leaving patients with hefty medical bills for the immunosuppressive drugs they needed.
Now, if you qualified for Medicare only because of ESRD but it’s been 36 months since a successful kidney transplant, you can enroll in a version of Part B that only covers the immunosuppressive medication. For this group of enrollees, the monthly Part B premium is $97.10 in 2023.
Beyond the monthly premium, Part B also requires an annual deductible and 20% coinsurance on covered care. It’s important to note that there is no cap on the Part B cost sharing. You could pay 20% of $10,000 or $1 million in a single year — or more.
Original Medicare does not cap out-of-pocket expenses.
So while those Part B costs might seem on the low side compared with other kinds of health insurance or the plan you had when you were working, they can add up.
It’s one big reason to consider adding a Medicare supplemental plan (Medigap) to your coverage or replacing Original Medicare with Medicare Advantage. The former can help trim your Original Medicare costs. The latter may help lower them in the first place (and Advantage plans do have a cap on out-of-pocket costs).
As for other costs, Part B has a late enrollment penalty fee for people who enroll late. And by “late,” we mean anyone who signs up for Part B outside of that initial enrollment window we talked about above.
Unless you have a good reason to delay Part B enrollment — such as you’re still working at age 65 and have insurance through your job — you’ll need to enroll in Part B as soon as you’re eligible. Otherwise, you may have to pay a penalty when you eventually sign up.
The Part B late enrollment penalty is an extra 10% on top of your premium for each full, 12-month period that you could have had Part B but didn’t. And this penalty lasts for as long as you have Part B. In other words, it’s permanent.
What about IRMAA?
Most people pay the standard Part B premium. But for those with higher incomes, a surcharge applies, meaning you’ll pay more for Part B if you have a higher income. This surcharge is called the Income Related Monthly Adjustment Amount (IRMAA) and it applies to both Part B and Part D.
IRMAA is a fee charged on top of the standard Part B premium, and it’s based on income from two years ago. So if you’re enrolling for the first time in 2023, your income from 2021 is what’s used to calculate any IRMAA charges. The amount changes each year.
Here’s a table outlining higher-income Part B premiums for 2023 (based on 2021 income):
(2021 tax return)
|Part B premium
(including IRMAA charge)
|Up to $97,000 as a single filer
Up to $194,000 as a joint filer
Up to $97,000 as married filing separately
|Above $97k to $123,000 as a single filer
Above $194k to $246,000 as a joint filer
|Above $123k to $153,000 as a single filer
Above $246k to $306,000 as a joint filer
|Above $153k to $183,000 as a single filer
Above $306k to $366,000 as a joint filer
|Above $183k to under $500,000 as a single filer
Above $366k to under $750,000 as a joint filer
Above $97k to under $403k as married filing separately
|$500,000+ as a single filer
$750,000+ as a joint filer
$403,000+ as married filing separately
You don’t have to do any math yourself since IRMAA is calculated automatically. But if you think your IRMAA charge is wrong, you can appeal the charge. Just know that you do have to pay this amount while you’re appealing it. If you don’t, you may lose your Part B coverage, and if you enroll in it later, you could face the late enrollment penalty.
Help Paying for Medicare Part B
As you head into your post-retirement years, you might have a nice nest egg saved up. Or you might not. Either way, you probably don’t plan on spending a good portion of your fixed income and/or savings on medical costs. But even with Medicare, your healthcare costs could climb as you get older.
If the Part B premium and 20% coinsurance seem too high to handle, then contact Medicare directly to see if you qualify for financial help. This may be calculated automatically when you apply for the program. Some people qualify for both Medicare and Medicaid (it’s called dual eligibility), which can lower your costs for Parts A, B and D.
But if you don’t qualify for Medicare or other financial assistance and you want to lower your out-of-pocket costs, you may consider other options: a Medicare supplement plan (also called Medigap) or a Medicare Advantage plan.
You can learn more about these options on other pages, but we’ll highlight the basics here as they relate to Medicare Part B.
Part B and Medigap
Medicare supplemental insurance, also known as Medigap, helps cover some or nearly all of your out-of-pocket costs under Original Medicare. It’s not insurance. It’s a supplemental policy with its own monthly premium that can help keep costs down for Parts A and B.
Medigap plans cover a set of benefits that vary by plan type, and these plans are standardized by letter type in all but three states (Massachusetts, Minnesota and Wisconsin). That means Plan G in Nebraska, for instance, covers the same exact benefits as Plan G in Wyoming. The difference comes in who’s selling the plan and how much it costs.
These plans can be particularly helpful if you want or need to stick with Original Medicare but want to lower what you pay out of pocket for care. For an added premium each month, you can choose a policy that covers some or all of your Part B coinsurance, for example. Since Original Medicare doesn’t cap the 20% coinsurance under Part B, a Medigap policy could fairly easily pay for itself in just a few visits.
Part B under Medicare Advantage
Your other option for potentially saving money on Medicare is to get a Medicare Advantage plan. Also known as Medicare Part C, Medicare Advantage is a private alternative to Medicare in that it’s sold by individual companies instead of the federal government.
It is, however, still regulated and supplemented by the federal government. That means there are standards that these plans have to follow, a big one being that all Medicare Advantage plans have to include at least the same benefits as Original Medicare (Parts A and B).
Advantage plans can be more generous, though. Many of them include coverage for things that Original doesn’t, like prescription drugs, routine dental and vision, hearing aids and exams, gym memberships, telehealth visits and more. Plus, by law, MA plans have to set a cap on out-of-pocket expenses for the year. This alone gives them an edge over Original Medicare, especially if you need a lot of regular medical care.
Because Advantage plans are sold by private companies, coverage and cost vary based on where you live and what’s available.
You’ll always pay your Part B premium regardless of whether you get your benefits from Original Medicare or Medicare Advantage. But Advantage plans don’t always charge an added premium for the added benefits you get, so it’s worth a look if you want to trim your healthcare costs.
Can I Change My Part B Coverage?
Yes, but you’ll need to look beyond Original Medicare. Under traditional Medicare, Part B benefits are Part B benefits, period.
That said, you don’t have to stick with Original Medicare if you don’t want to. That’s where Medicare Advantage comes in.
As we said in the last section, Medicare Advantage combines the benefits of Part A and Part B together and usually also covers broader benefits, like prescription drug coverage and dental care. These plans are sold by individual companies on the private market.
By law, Advantage plans must cover, at minimum, the benefits that come with Parts A and B. Beyond that, they have leeway in offering broader or more generous coverage. Advantage plans may charge an extra premium for these benefits, but some don’t.
When it comes to enrolling in Medicare or updating your coverage for the year, you’ll need to weigh the pros and cons for yourself when deciding on your benefits.
And speaking of changing your Part B coverage, you have a chance every year to do just that. Medicare Open Enrollment, also called the annual election period, runs from October 15th through December 7th each year. During this annual signup period, you can make changes to your Medicare coverage, including dropping Original Medicare and signing up for a Medicare Advantage plan instead.
The annual election period is a good chance to take a look at your coverage and make sure it’s working for you and your healthcare budget. You don’t have to do anything if you like your plan and it’s still available, but it never hurts to be sure.