Medicare Part B costs you a monthly premium, an annual deductible, and a percentage of costs when you use services

Medicare Part B covers doctor visits, outpatient care, lab tests, and medical equipment. You pay for it three ways: a monthly premium taken from your Social Security check, a yearly deductible you must meet before Medicare starts paying, and coinsurance (usually 20 percent) on most services after you meet the deductible.

The exact amounts change each year. For 2024, the standard monthly premium is $174.70, the annual deductible is $240, and you typically pay 20 percent of the Medicare-approved amount for most services. However, your actual premium may be higher if your income was above a certain level two years ago — Medicare uses a process called Income-Related Monthly Adjustment Amount (IRMAA) to calculate this.

If you delayed signing up for Part B when you first became may be able to access at 65, you may owe a permanent penalty on top of your premium. The penalty is 10 percent of the standard premium for each full year you could have had Part B but did not. This penalty stays with you for life, so understanding when to enroll matters.

Key Takeaways

  • The 2024 standard Part B premium is $174.70 per month, but yours may be higher if your income exceeds certain thresholds set two years prior.
  • You pay a $240 annual deductible in 2024, then Medicare covers 80 percent of most services while you pay 20 percent coinsurance.
  • If you delayed enrolling in Part B past age 65 without a valid reason, you will pay a permanent 10 percent penalty on your premium for each year you waited.
  • Some people with low income may pay reduced or no Part B premium through the Medicare Savings Program, which is run by your state.

How the monthly premium works

Your Part B premium comes directly out of your Social Security payment each month. If you are not yet receiving Social Security, Medicare bills you quarterly. The standard amount for 2024 is $174.70, but the actual number you pay depends on your modified adjusted gross income (MAGI) from two years ago.

If your 2022 income was above $97,000 as a single filer or $194,000 as a married couple filing jointly, you pay more. Medicare divides higher earners into five brackets, and the premium can reach $560.50 per month for the highest bracket. You will receive a letter in the mail (called an IRMAA notice) telling you which bracket you fall into and what you owe.

You can challenge an IRMAA decision if your income dropped significantly in 2023 or 2024 — for example, due to retirement, divorce, or death of a spouse. You have 60 days from the date on your notice to file an appeal with Social Security.

The annual deductible and coinsurance

Before Medicare Part B starts paying for most services, you must pay a $240 deductible in 2024. This resets every January. Once you have paid $240 out of pocket for covered services, Medicare then pays 80 percent of the Medicare-approved amount, and you pay the remaining 20 percent (called coinsurance).

This 20 percent coinsurance applies to doctor visits, lab work, imaging, and most outpatient procedures. However, some services have different cost-sharing: preventive care (like annual wellness visits and cancer screenings) is covered at 100 percent with no deductible or coinsurance. Mental health visits are also covered at 80/20 after the deductible.

The deductible and coinsurance only explore to services that Medicare considers medically necessary. If a doctor orders something Medicare deems not medically necessary, you pay the full cost yourself.

Late enrollment penalties and when they explore

If you did not sign up for Part B when you first became may be able to access at 65, and you did not have other health coverage (such as employer insurance or TRICARE), you owe a permanent penalty. The penalty is 10 percent of the standard Part B premium for each full 12-month period you could have had Part B but did not.

For example, if you delayed for three years, your penalty is 30 percent of the standard premium — meaning you would pay an extra $52.41 per month forever. This penalty does not go away even if you move to a different state or change your circumstances.

You can avoid the penalty if you had creditable coverage (employer health insurance, TRICARE, or certain other plans) during the time you were not enrolled in Part B. You must be able to show proof of that coverage when you enroll.

What happens if you cannot afford Part B

If your income is low, your state may help you pay Part B premiums through the Medicare Savings Program (also called Medicaid Buy-In in some states). This is a joint federal-state program, and the rules vary by state. Some states cover the full premium; others cover part of it.

To learn whether you may have access to, contact your state Medicaid office or call 1-800-MEDICARE. You will need to provide proof of income and citizenship. Processing usually takes 30 to 60 days.

If you are enrolled in both Medicare and Medicaid (called "dual may be able to access"), Medicaid typically pays your Part B premium automatically once you are approved.

How costs differ if you have a Medigap or Medicare Advantage plan

If you have a Medigap (supplemental insurance) plan, you still pay the Part B premium to Medicare, but Medigap covers some or all of your deductible and coinsurance. The amount depends on which Medigap plan you choose. You also pay a separate monthly premium to the Medigap insurance company.

If you have a Medicare Advantage plan instead of Original Medicare, you still pay the Part B premium, but your deductible and coinsurance work differently. Most Advantage plans have lower or no deductibles, but they limit which doctors you can see and may require referrals. Costs vary widely by plan and by region.

Neither Medigap nor Medicare Advantage changes your Part B premium amount — that stays the same. They only affect what you pay out of pocket when you use services.

Costs you should budget for beyond the premium

The monthly premium is only the beginning. Once you start using services, you will also owe the annual deductible ($240 in 2024) and then 20 percent coinsurance on most services. A single doctor visit might cost $150 to $300 out of pocket depending on what tests or procedures are done.

Some services have no coinsurance but do have other costs. For example, durable medical equipment (like wheelchairs or oxygen) is covered at 80/20 after the deductible, but you may have to rent or buy it upfront and then submit a claim for reimbursement.

If you see many doctors or have frequent lab work, your coinsurance can add up quickly. This is why many people buy Medigap coverage — to cap their out-of-pocket costs.

Frequently Asked Questions

Can my Part B premium go down if my income drops?

Yes. If your income fell significantly in 2023 or 2024 (for example, you retired or lost a spouse), you can file an appeal with Social Security within 60 days of receiving your IRMAA notice. You will need to provide proof of the income change, such as a recent tax return or a death certificate.

Do I have to pay Part B if I am still working and have employer insurance?

No. If your employer has 20 or more employees and offers health insurance, you can delay Part B without penalty. However, you must enroll within eight months of losing that employer coverage, or you will owe a late penalty.

What is the difference between the Part B deductible and coinsurance?

The deductible is a fixed amount ($240 in 2024) you pay first before Medicare helps. Coinsurance is the percentage (usually 20 percent) you pay for each service after you have met the deductible. If a doctor visit costs $100, you pay the full $100 toward your deductible; once the deductible is met, you would pay $20 coinsurance on a $100 visit.

Will my Part B costs increase every year?

Yes. Medicare adjusts the premium and deductible each year based on inflation and program costs. The 2024 amounts are higher than 2023. You will receive a notice in the mail each October or November telling you the new amounts for the following year.

What if I cannot pay my Part B premium?

Contact Medicare at 1-800-MEDICARE to discuss your situation. You may be able to set up a payment plan, or you may may have access to for the Medicare Savings Program if your income is low. Do not ignore the bill — if you stop paying, Medicare can disenroll you from Part B.