Medicare Part B – enrollee benefits and coverage costs

What is Medicare Part B?

Medicare Part B provides coverage of services provided by doctors, outpatient hospital services and other healthcare providers, as well as some home health services and durable medical equipment.

What does Medicare Part B cover?

Part B pays for a broad range of medically necessary services that aren’t picked up by inpatient coverage – even though they might be received while a person is hospitalized – including ambulance services, certain surgical procedures, dialysis, mental health care, physical therapy, transplants, chemotherapy and radiation, urgently needed care and more.

In addition, Part B covers diagnostic tests (such as MRIs, CT scans, EKGs, and x-rays) and a host of preventive medical services, such as pap tests, HIV screening, glaucoma tests, hearing tests, diabetes screening, and colorectal cancer screenings. Part B also pays the costs of durable medical equipment such as wheelchairs, hospital beds, and oxygen equipment, and for drugs that are taken by infusion (most drugs are covered under Medicare Part D, but drugs administered via infusion are covered under Part B instead).

See if your test, item or service is covered by Medicare.

What is the Medicare Part B premium for 2023?

The premium tends to increase from year to year, but for 2023, it declined for the first time in more than a decade. For most enrollees, the 2023 premium is $164.90/month. (See below for an overview of how Part B premiums have changed over the years.)

The reduction in premiums for 2023 was due to lower-than-anticipated Part B spending in 2022, leaving the government with a surplus that could be used to reduce Part B premiums for 2023. This was partly because of lower-than-expected spending on Aduhelm, the new Alzheimer’s drug that’s given by infusion in a doctor’s office. (Most medications are covered under Medicare Part D, rather than Part B. But drugs that are provided via in-office infusions are covered under Part B instead, which is why Aduhelm affected Part B premiums.)

Part B premiums can be covered by Medicaid if the beneficiary is eligible for both programs. And high-income enrollees pay more than the standard premiums for Part B.

Can I get Medicare Part B for free?

Some enrollees can get Medicare Part B for free. There are essentially three ways this is possible, and although they aren’t applicable to most Medicare beneficiaries, it’s useful to know what options are available for covering the cost of the premiums. Here are the scenarios:

• Your income and assets are low enough to qualify for a Medicare Savings Program that covers the cost of Part B. Medicare Savings Programs are run by each state’s Medicaid office, and eligibility does vary from one state to another.
• You or your spouse are continuing to work and the employer offers a QSEHRA or an ICHRA that reimburses your Part B premiums.
• You enroll in a Medicare Advantage plan that has a “giveback” rebate that covers the entire Part B premium. Giveback rebates are not the norm, but do tend to be available in most areas. However, they can vary from as little as 10 cents per month to as much as the full premium. So it’s important to understand that most enrollees who get a giveback rebate do still have to pay something for Part B.
  

What is the 2023 IRMAA Part B surcharge?

Part B enrollees with income above $97,000 (single) / $194,000 (married) pay higher premiums than the rest of the Medicare population in 2023. (This threshold was $85,000/$170,000 prior to 2020, but it was adjusted for inflation starting in 2020.) The 2023 Part B premiums for high-income beneficiaries range from $230.80/month to $560.50/month.

This income-related monthly adjustment amount (IRMAA) is based on your income tax return from two years ago. That’s the most recent tax return they have on file at the start of the plan year (eg. when the 2023 plan year begins, the most recent tax returns on file are for 2021, so 2021 income is used to determine IRMAAs for 2023). But if a life-change event has reduced your income since then, there’s an appeals process available. You can use it to request that the income-related premium adjustment be changed or eliminated without having to wait for it to reflect on a future tax return.

What is the Part B deductible?

Enrollees who receive treatment during the year must also pay a Part B deductible, which decreased to $226 in 2023 (down from $233 in 2022, but still higher than the $203 deductible that applied in 2021). After the deductible, enrollees also pay 20% of the Medicare-approved amount for care that’s covered under Part B. (See below for an overview of how the Part B deductible has changed over time.)

Learn how Medicare premiums, deductibles and coinsurance changed for 2023.

Does everyone have to pay the Part B deductible?

No, not everyone pays the Part B deductible. People who don’t receive services under Medicare Part B (or who only receive deductible-free services, such as vaccines), do not have the pay the deductible. And although most Medicare beneficiaries do receive services that are covered under Part B, some of them do not have to pay the Part B deductible:

• Medigap plans C and F cover the deductible (which is why those plans are no longer available to people who become newly eligible for Medicare after the end of 2019, under the terms of the Medicare Access and CHIP Reauthorization Act; the idea is that there will be less unnecessary utilization of health care if all Original Medicare enrollees are subject to the Part B deductible, but critics argue that it could also hinder access to necessary care).
• Enrollees who have Medicaid, employer-sponsored health coverage, or retiree health benefits from an employer generally don’t have to pay the Part B deductible, as the other coverage picks up some or all of the cost.
• Some Medicare Advantage plans have no deductibles and low copays. Medicare Advantage enrollees pay the Part B premium plus the Medicare Advantage premium, and then the Medicare Advantage insurer wraps the Part A and B (and in most cases, Part D) benefits into one plan for the enrollee, with cost-sharing that can differ greatly from the standard Original Medicare cost-sharing.

But according to a Kaiser Family Foundation analysis, about 19% of Original Medicare beneficiaries only have Medicare Parts A and B. They don’t have Medigap coverage, employer-sponsored coverage, retiree health benefits from a former employer, or Medicaid. These enrollees — along with beneficiaries who have a Medigap plan other than C or F — have to pay the full Part B deductible if and when they need services that are covered under Medicare Part B.
[hio_question question="How do I enroll in Part B?"]If you are already receiving Social Security or Railroad Retirement benefits, you will be notified three months prior to your 65th birthday that you are about to become a Part A enrollee, and that Part B is an option. You’ll receive the Part B card at the same time as the Part A card.

If you choose not to enroll in Part B, you must return the card (which means you’re rejecting Part B coverage; more on that below) or the premium will automatically start to be deducted from your Social Security checks. If you keep the card, Part B coverage kicks in the month you turn 65.

If you’re not already receiving Social Security or Railroad Retirement benefits, you’ll have an opportunity to enroll in Medicare B (along with Part A) during a seven-month window that includes the three months before the month you turn 65, the month you turn 65, and the following three months.  If you enroll in the three months prior to the month you turn 65, your coverage will be effective the month you turn 65.

It’s important to note that if you fail to enroll in Part B during your seven-month enrollment period, the program will offer you another opportunity to enroll each succeeding year (January 1 – March 31), with coverage effective the month after you enroll (note that the effective date used to be July 1, but this changed as of 2023, under the BENES Act). The catch? If and when you do eventually enroll in Part B, for each year that you were eligible for Part B but turned it down, your monthly premium will be increased by 10%, and the higher rate will be in place for as long as you have Part B.

So if you wait three full years to enroll after your initial enrollment period, you’ll pay premiums that are 30% higher than the normal price, for as long as you have Part B coverage (generally, for life). The penalty does not apply, however, if you delay your Part B enrollment because you have other coverage in place from a current employer or your spouse’s current employer.

Should I delay Part B enrollment?

If you have health insurance through your current employer, or through your spouse’s current employer, you may want to delay enrollment in Part B. You’ll need to check with your employer or HR department to make sure that your employer-sponsored coverage will pick up where Part A leaves off, but assuming it does, you may want to delay enrolling in Part B, since it has a premium.

This article explains more about what you need to know before making the decision to delay Part B.

Can I reject Part B altogether?

Part B is optional. You can choose to skip it altogether and avoid the premiums. But that means you’re on the hook for the full cost of any services that would otherwise be covered under Part B. For healthy enrollees, that might amount to the occasional office visit and nothing more. But if you end up needing extensive outpatient care — such as kidney dialysis, chemotherapy, radiation, physical therapy, etc. — your bills could add up quickly.