Medicare Part B is the medical insurance piece of Medicare

Medicare Part B is the part of Medicare that works like traditional medical insurance — it covers doctor visits, outpatient care, lab tests, and preventive services. You pay a monthly premium for Part B, and it picks up a percentage of the cost after you meet your deductible. Part B is optional, but most people who are may be able to access for Medicare sign up for it because the alternative is paying the full cost of medical care out of pocket.

Part B is different from Part A, which covers hospital stays and skilled nursing care. Part A is usually free if you or your spouse paid Medicare taxes for at least 10 years. Part B costs money every month — the standard premium in 2024 is $164.90, though it can be higher if your income is above a certain threshold. If you delay signing up for Part B when you first become may be able to access, you may pay a permanent penalty, so the timing matters.

Key Takeaways

  • Medicare Part B covers doctor visits, outpatient services, lab work, imaging, and preventive care — the things you would normally see a doctor for outside a hospital.
  • You pay a monthly premium for Part B, a yearly deductible, and then a percentage of the cost (usually 20 percent) after the deductible is met.
  • Part B is optional, but if you delay signing up past your initial enrollment window, you will owe a higher premium for as long as you have Medicare.
  • Many people pair Part B with either a Medigap policy (which covers the costs Part B does not) or a Medicare Advantage plan (which replaces Part B and Part A with a single plan).

What Part B actually pays for

Part B covers the doctor and outpatient services you use most often. This includes visits to your primary care doctor or a specialist, lab tests and blood work, X-rays and other imaging, physical therapy and occupational therapy, mental health counseling, and preventive services like annual wellness visits and cancer screenings. If your doctor orders a test or procedure, Part B usually covers it as long as your doctor accepts Medicare and the service is medically necessary.

Preventive services are covered at no cost to you — you do not pay the 20 percent coinsurance for things like mammograms, colonoscopies, flu shots, or blood pressure checks if they are done for prevention rather than to treat an existing problem. This is one of the better deals in Part B, because prevention is often the most affordable way to catch problems early.

Part B does not cover dental care, vision care, hearing aids, or long-term care. It also does not cover prescription drugs — that is Part D. If you need any of those services, you either pay out of pocket or buy additional coverage.

How much Part B costs and how it works

Part B has three layers of cost: the monthly premium, the yearly deductible, and coinsurance. The monthly premium is deducted from your Social Security check if you receive benefits, or you pay it directly to Medicare if you do not. The standard premium changes each year; in 2024 it is $164.90 per month, but higher-income beneficiaries pay more.

Once you have paid your yearly deductible (which is $240 in 2024), Medicare pays 80 percent of the approved amount for most services, and you pay 20 percent. The approved amount is what Medicare has decided a service is worth — it is not always what your doctor charges. If your doctor does not accept Medicare, you may owe the difference between what Medicare pays and what the doctor charges, which can be substantial.

There is no out-of-pocket maximum under Part B alone, which means your costs can keep rising if you need a lot of care. This is why many people buy a Medigap policy to cover the 20 percent coinsurance, or they choose a Medicare Advantage plan instead, which does have an out-of-pocket maximum.

Part B versus Medicare Advantage: which one you have matters

If you enroll in Original Medicare (Part A and Part B), you can see any doctor who accepts Medicare anywhere in the country. You have more freedom to choose, but you also have more out-of-pocket costs because of the 20 percent coinsurance.

If you choose a Medicare Advantage plan instead, you are replacing Part B with a private insurance plan run by an insurance company. Medicare Advantage plans usually have lower monthly premiums and an out-of-pocket maximum, which means your costs are capped. The trade-off is that you usually have to use doctors in the plan's network, and you may need prior approval from the insurance company before certain services. Medicare Advantage plans also include prescription drug coverage (Part D), whereas Original Medicare Part B does not.

You cannot have both Original Medicare Part B and a Medicare Advantage plan at the same time. You choose one or the other during your initial enrollment period or during the annual open enrollment period in the fall.

When you can sign up for Part B and what happens if you miss the important date

Your initial enrollment period is the seven-month window that starts three months before the month you turn 65 and ends three months after. If you sign up during this window, your coverage starts the month you turn 65 (or the month you become may be able to access if you are under 65 and on disability). If you miss this window, you can still sign up during the general enrollment period from January 1 to March 31 each year, but your coverage will not start until July 1, and you will owe a higher premium.

The penalty is 10 percent of the standard premium for each full year you delayed signing up. If you waited two years past your initial enrollment period, you would pay 20 percent more than the standard premium, and you would pay that higher amount for as long as you have Medicare. The only exception is if you had other health insurance (like coverage through an employer) when you turned 65 — in that case, you have eight months after that coverage ends to sign up for Part B without a penalty.

How Part B works with other coverage

If you have Part B and want to reduce your out-of-pocket costs, you have two main options: buy a Medigap policy or switch to a Medicare Advantage plan.

A Medigap policy is supplemental insurance sold by private insurance companies. It covers some or all of the costs that Part B does not — the deductible, the 20 percent coinsurance, and sometimes copays for emergency room visits. Medigap policies are standardized, which means a Plan G from one company covers the same things as a Plan G from another company. The price varies by company and by your age and location. Medigap does not cover prescription drugs, so you would still need to enroll in Part D separately.

If you have Part B and Medigap, you keep your freedom to see any doctor who accepts Medicare, and your out-of-pocket costs are predictable. The downside is that Medigap premiums can be high, and you are paying both a Medicare premium and a Medigap premium.

Frequently Asked Questions

Do I have to take Part B when I turn 65?

Part B is optional, but if you delay signing up past your initial enrollment period and do not have other health insurance, you will owe a permanent 10 percent penalty on your premium for each year you waited. If you are still working and have health insurance through your employer, you can delay Part B without penalty as long as you sign up within eight months of losing that coverage.

What if my doctor does not accept Medicare?

You can still see the doctor, but you may owe the full cost yourself. Some doctors accept Medicare but do not accept "assignment," which means they do not agree to the Medicare-approved amount. If a doctor does not accept assignment, they can charge up to 15 percent more than the Medicare-approved amount. You should always ask whether a doctor accepts Medicare and assignment before scheduling an appointment.

Does Part B cover prescription drugs?

No. Prescription drug coverage is Part D, which is separate. You can enroll in Part D when you first become may be able to access for Medicare, or during the annual open enrollment period. If you delay Part D without having other drug coverage, you will owe a penalty when you do sign up.

Can I switch from Part B to Medicare Advantage later?

Yes. You can switch during the annual open enrollment period from October 15 to December 7 each year, and your new coverage starts January 1. If you switch back to Original Medicare Part B after being in Medicare Advantage, you have the right to buy a Medigap policy without waiting or paying a higher premium, as long as you explore within 63 days of losing the Medicare Advantage plan.

What happens to Part B if I move to another state?

Part B works the same way in every state — you can see any doctor who accepts Medicare anywhere in the country. Your premium may change slightly depending on where you live, but your coverage does not change. If you have a Medicare Advantage plan, you may need to switch plans when you move, because most plans only cover care in specific geographic areas.