Part B Medicare Insurance: What You Pay

Medicare Part B is medical insurance intended to help you pay doctor bills for treatment either in or out of the hospital, as well as many of the other medical expenses you incur when you're not in the hospital. The other main parts of traditional Medicare are Part A (hospital insurance) and Part D (prescription drug coverage).

(Part C, also known as Medicare Advantage, combines Parts A and B, and often Part D as well, and offers services through an HMO or PPO.)

Eligibility for Medicare Part B

If you're either a U.S. citizen or a resident of the United States who has been here lawfully for five consecutive years, and you're 65 or older, you're eligible to enroll in Medicare Part B medical insurance. This is true whether or not you're eligible for Part A hospital insurance.

If you're under age 65, you can be eligible for Medicare Part B if you're receiving Social Security disability insurance (SSDI) or you have end-stage renal disease.

Medicare Part B Monthly Premiums

Everyone who enrolls in the Part B program has to pay a monthly premium. The premium is raised most years on January 1. For 2024, the basic monthly Part B premium is $174.70. But people with higher income (over $103,000 for individuals and $206,000 for couples) pay an additional monthly surcharge, as detailed in the chart in our update on 2024 Medicare costs.

If, in the prior two years, you've become widowed or divorced, or had a significant drop in income because of retirement or reduced work hours, you can contact Medicare and request an adjustment of the surcharge on your premium.

Medicare Part B Deductible Amounts

Before Medicare pays anything under Part B medical insurance, you must pay a deductible amount of your covered medical bills for the year. The Part B deductible amount is currently $240 per year (in 2024).

Medicare keeps track of how much of the deductible you've paid in a given year. It generally does a good job of keeping track, but it's always a good idea to keep your own records and double-check the accounting.

If you're a Medicare Advantage member, you do have to pay the monthly Part B premium, but you don't have to pay the Part B deductible.

How Much Does Medicare Part B Pay?

When all medical bills are added up, on average, traditional Medicare pays for only about half the total. There are three reasons for this. First, Medicare doesn't cover all major medical expenses; for example, it doesn't cover routine physical examinations, some medication, glasses, hearing aids, dentures, and some other costly medical services.

Second, Medicare pays only a portion of what it decides is a reasonable amount—called the approved charges—for medical services. In addition, when Medicare decides that a particular service is covered and determines the approved charges for it, Part B medical insurance usually pays only 80% of those approved charges; you're responsible for the remaining 20%.

Third, the approved amount may seem reasonable to Medicare, but it's often considerably less than what the doctor actually charges. If your doctor or other medical provider doesn't accept "assignment" of the Medicare-approved charges, you're personally responsible for the difference.

Here are the details on how this works.

Medicare Pays Only 80% of Most Approved Charges

For most services, Part B medical insurance pays only 80% of what Medicare decides is the approved charge for a particular service or treatment. You're responsible for paying the other 20% of the approved charge, called your "coinsurance amount." And unless your doctor or other medical provider accepts assignment, you're also responsible for the difference between the Medicare-approved charge and the amount the doctor or other provider actually charges, subject to the legal limit discussed below.

Assignment of Medicare-Approved Amounts

In most instances, Medicare pays 80% of the approved amount of doctor bills; you (or your medigap plan) pay the remaining 20%, if your doctor accepts assignment of that amount as the full amount of your bill.

Most doctors who treat Medicare patients will accept assignment. Some doctors and facilities have signed up in advance with Medicare, agreeing to accept assignment on all Medicare patients. They are called "Medicare participating doctors" and are paid slightly higher amounts by Medicare than nonparticipating doctors.

Other doctors haven't agreed to accept assignment on all patients, but will do so on some claims, on a case-by-case basis. Unfortunately, many doctors—particularly specialists who have to compete less for patients because they are highly sought after—don't accept assignment at all. When deciding on a doctor, find out in advance whether the doctor always takes assignment of the Medicare-approved amount, or if the doctor is willing to take assignment on your bills.

Medicare has a lower approved fee schedule for doctors, clinics, and outpatient hospital departments who aren't participating Medicare providers (it pays those doctors 5% less for the same services). However, if a doctor (or clinic) doesn't accept assignment, the doctor can charge you an additional amount above the Medicare-approved amount (15%).

Legal Limit on Amounts Charged by Doctors and Hospitals

By law, a doctor or other medical provider can bill you no more than what's called the "limiting charge," which is set at 15% more than the amount Medicare decides is the approved charge for a treatment or service. That means you might be personally responsible—either out of pocket or through supplemental insurance—for the 20% of the approved charges that Medicare doesn't pay, plus any amount the doctor charges, up to the 15% limiting charge.

Regardless of how much the doctor or other medical provider charges non-Medicare patients for the same service, you can be charged no more than 15% over the amount Medicare approves for that service.

But remember, Medicare pays non-participating doctors, clinics, and outpatient hospital departments only 95% of the Medicare-approved amount for a participating Medicare provider, so the limiting charge is based on this amount. Because of this, it works out that a non-participating doctor's total fee can actually be no more than 9.25% of what a participating Medicare provider would charge.

Note that this legal limit doesn't apply to outpatient hospital charges (see our article on Medicare payments for outpatient hospital services).

When Medicare Pays 100% of Approved Charges

Medicare Part B pays 100% of the approved charges rather than the usual 80% for several types of treatments and medical providers. In these categories, such as lab tests and vaccinations, you're not required to pay the regular 20% coinsurance amount.

In most of the categories (see below), medical providers have to accept assignment of the Medicare-approved charges as the full amount, so you actually pay nothing at all. And you don't need to meet your deductible before getting these services.

For a list of all services covered by Part B, see our article on Part B Medicare coverage.

Clinical Laboratory Services

Medicare pays 100% of its approved amount for such laboratory services as blood tests, urinalyses, and biopsies. And the laboratory must accept assignment, except in Maryland where a hospital lab can bill you, as an outpatient, for a 20% coinsurance amount.

Home Health Care

Whether you receive home health care under Part A or Part B, Medicare pays 100% of the charges, and you're not responsible for paying your yearly deductible. However, if you receive medical equipment—a wheelchair, chair lift, special bed—from the home health care agency, you must pay the 20% coinsurance amount.

Vaccinations

Medicare pays the full 100% of its approved charges for the following vaccinations:

• influenza
• pneumonia
• hepatitis B, and
• COVID-19.

The yearly deductible doesn't apply to these services, but medical providers aren't required to accept assignment for these vaccines, so you might have to pay a 15% charge on top of the amount Medicare approves.

Part D prescription drug plans (and Medicare Advantage plans with a drug plan) cover all other vaccines when prescribed by a physician.

Preventive Care Screenings

Medicare Part B pays 100% of the Medicare-approved amount for certain covered preventive screening examinations appropriately prescribed by a physician. You do need to get the preventative care or screening at a participating provider. Medicare will cover the following at 100%:

• annual physical exams
• annual depression screenings
• mammogram screenings (not diagnostic mammograms) for women over age 35
• gynecological exams every two years for women who are at risk of cancer
• bone density tests every two years for women at risk of osteoporosis
• preventative annual prostate screenings for men age 50 or older
• screening tests for cardiovascular disease and diabetes for patients at risk
• one or more hepatitis C screenings if you're at risk, and
• colorectal cancer screenings at certain intervals (including fecal occult blood tests, sigmoidoscopies, and colonoscopies, but not barium enemas).

How to Pay the 20% of Part B Costs Not Covered by Medicare

Traditionally, many Medicare enrollees covered the 20% coinsurance costs through a private supplemental "medigap" insurance policy, but an increasingly large percentage of people avoid the charges by joining a Medicare Advantage managed care plan. People with lower income might have the 20% paid by a state Medicaid program or Medicare Savings Program.

Signing Up for Medicare Part B

There are specific time periods that you can sign up for Part B. When you can or should sign up for Part B depends on your age and whether you or your spouse are still working. For more information, see Nolo's article on Medicare enrollment periods and coverage start dates.

_{Updated November 30, 2024}