Medicare Part B costs you a monthly premium, an annual deductible, and coinsurance on most services

Medicare Part B is hospital insurance that 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 meet before Medicare starts paying its share, 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 $164.90, the annual deductible is $240, and you typically pay 20 percent of the cost for doctor visits and other services. However, your premium may be higher if your income was above a certain level two years ago — this is called an Income-Related Monthly Adjustment Amount (IRMAA).

If you did not sign 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 delayed, and it stays with you for life.

Key Takeaways

  • The 2024 standard Part B premium is $164.90 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 coinsurance of 20 percent on most covered services after that.
  • If you delayed signing up for Part B past age 65 without a valid reason, you will owe a permanent 10 percent penalty on your premium for each year you waited.
  • Part B premiums and deductibles increase most years; you can find the current amounts on Medicare.gov or by calling 1-800-MEDICARE.

How the monthly premium works

Your Part B premium comes out of your Social Security payment each month automatically, unless you chose a different payment method when you signed up. If you have not yet claimed Social Security, Medicare will bill you directly.

The standard premium covers the cost of the program nationwide. Most people pay the same amount, but if your modified adjusted gross income (MAGI) from two years ago was above $97,000 as a single filer or $194,000 as a married couple filing jointly, you will pay a higher premium. The higher amount, called IRMAA, can range from $230.80 to $560.50 per month in 2024, depending on your income bracket.

Medicare sends you a notice each year in December showing your premium for the following year. If your income dropped because you retired, lost a job, or had another life event, you can request that Medicare recalculate your IRMAA using your current year's income instead of the two-year-old figure.

The annual deductible and coinsurance

Before Medicare Part B starts to pay for your care, you must pay the annual deductible out of your own pocket. In 2024, that deductible is $240. Once you have paid $240 toward covered services in a calendar year, Medicare begins to share the cost with you.

After you meet the deductible, you typically pay 20 percent coinsurance on covered services, and Medicare pays 80 percent. This applies to doctor office visits, lab tests, imaging (X-rays and CT scans), and durable medical equipment like wheelchairs or oxygen. Some preventive services, such as annual wellness visits and cancer screenings, have no coinsurance — you pay nothing after the deductible.

Coinsurance is different from a copay. A copay is a flat dollar amount you pay at each visit (for example, $15 for a doctor visit). Part B does not use copays; it uses coinsurance, which means your cost depends on what the service actually costs Medicare.

Income-related premiums (IRMAA) and how to challenge them

If Medicare calculates that your income is above the threshold, you will receive a notice called an Initial information Notice telling you your new premium amount and the income figure Medicare used. The thresholds for 2024 start at $97,000 for single filers and $194,000 for married couples filing jointly. Each income bracket above that triggers a higher premium tier.

You have the right to challenge this calculation if your income has changed since the year Medicare is using. Life events that count include retirement, loss of a job, death of a spouse, divorce, or a significant drop in income from investments or rental property. You must request a recalculation within 60 days of receiving the notice. Medicare will ask you to submit documents such as your most recent tax return, a letter from your employer, or a Social Security statement showing your current income.

If Medicare approves your request, they will recalculate your premium using your current year's income instead. This can lower your premium when ready, and Medicare may refund overpayments from earlier months in the same year.

Late enrollment penalties and how they work

If you did not sign up for Part B when you first became may be able to access — usually at age 65 — you may owe a permanent penalty. The penalty is 10 percent of the standard Part B premium for each full 12-month period you were may be able to access but did not enroll. If you delayed for three years, your penalty would be 30 percent of the standard premium, added to your monthly bill for life.

There are exceptions. If you were covered by a group health plan through your own job or your spouse's job, you do not owe a penalty, even if you delayed past 65. You have eight months after that job coverage ends to sign up for Part B without penalty. If you were not a U.S. citizen or permanent resident, the rules also differ.

If you believe you have a valid reason for the delay, you can request that Medicare waive the penalty. Contact Social Security or Medicare to discuss your situation and ask whether you may have access to for an exception.

What Part B covers and does not cover

Part B covers doctor visits (both in-office and telehealth), lab tests, imaging, physical therapy, mental health services, and durable medical equipment. It also covers some preventive services at no cost, including annual wellness visits, cancer screenings, and vaccines.

Part B does not cover dental care, vision exams, hearing aids, or long-term care in a nursing home. It also does not cover prescription drugs — that is covered under Part D. If you need these services, you can purchase a separate Medigap policy or a Medicare Advantage plan that may include them.

How premiums and deductibles change year to year

Medicare Part B costs are set by Congress and typically increase each year based on inflation and the cost of medical services. The 2024 premium of $164.90 and deductible of $240 are higher than 2023 amounts. You will receive a notice in December each year showing your premium for the following year, so you can plan your budget.

If you are on a fixed income and the increase is significant, you may be protected by a rule called Government Pension Offset (GPO) or Windfall Elimination Provision (WEP) if you receive a government pension. However, most people see their premium increase along with the cost of living.

Frequently Asked Questions

Can I reduce my Part B premium if my income drops?

Yes. If you experience a life event such as retirement, job loss, or death of a spouse, you can request that Medicare recalculate your IRMAA using your current income instead of the two-year-old figure. You must submit the request within 60 days of receiving your premium notice and provide documentation of the income change.

What happens if I cannot afford my Part B premium?

If your income is very low, you may be able to get help paying your premiums through your state's Medicaid program or a program called may have access to Medicare Beneficiary (QMB). Contact your state Medicaid office or call 1-800-MEDICARE to learn whether you may be may be able to access.

Do I have to pay the Part B deductible every year?

Yes. The deductible resets on January 1 each year. Once you have paid $240 toward covered services in 2024, Medicare begins to cover 80 percent of most services for the rest of that calendar year. The deductible applies again starting January 1, 2025.

Is there a limit to how much I pay out of pocket for Part B?

Part B itself does not have an out-of-pocket maximum. However, if you have a Medigap policy or Medicare Advantage plan, those plans may have limits on what you pay. Original Medicare (Part A and Part B together) does have limits on hospital costs, but not on doctor and outpatient services.

Why is my Part B premium higher than my neighbor's?

Your premium is likely higher because your income is above the standard threshold. Medicare uses your modified adjusted gross income from two years ago to set your premium. If your income was $100,000 and your neighbor's was $80,000, you would pay IRMAA and they would pay the standard premium.