This article was updated on February 28, 2020.
The Medicare Part B Wild Card
In 2017, Medicare Part B provided healthcare for 59 million beneficiaries and spent $708 billion. The cost of providing Medicare Parts B and D to beneficiaries continues to rise, in large part due to the costs of prescription drugs.
The Medicare Part B monthly premium that you pay can vary due to many factors, including incremental yearly increases, the amount of income you earn, whether you enrolled in Part B late and are paying a penalty (a 10% increase per year you enroll late), and whether or not you are on Social Security. On average, the Medicare Part B premium has gone up 7.7% each year since 1966.
What is Medicare Part B Coverage?
Medicare Part B helps cover medically necessary services and supplies needed for the diagnosis or treatment of your health condition. This includes outpatient services received at a hospital, doctor’s office, clinic, or other health facility. Medicare Part B also helps cover many preventive services to thwart illnesses or detect them at an early stage.
Medicare Part B Benefits
Medical services and supplies covered by Medicare Part B include (but may not be limited to):
- Doctor visits
- Clinical research
- Laboratory tests and X-rays
- Emergency ambulance services
- Mental health services
- Durable medical equipment (DME)
- Preventive services, such as pap tests, flu shots, and screenings
- Getting a second opinion before surgery
- Rehabilitative services, including physical therapy, occupational therapy, and speech-language pathology services
- Some outpatient prescription drugs
If in doubt, check to find out if Medicare covers a service or item.
Medicare Part B Costs
Medicare Part B involves costs. You’ll pay both a monthly premium and a yearly deductible for Medicare Part B. The monthly premium amount may vary depending on your specific situation:
- The standard Part B premium for 2020 is $198.
You may have to pay a higher premium if your yearly income is above a certain amount, as reported on your tax return from two years ago. In addition, if you didn’t enroll in Medicare Part B when you were first eligible, you may have to pay a late-enrollment penalty in the form of a higher premium, unless you’re eligible for a Special Enrollment Period.
- In addition to your monthly premium, you’ll pay $198 for the yearly Part B deductible in 2020.
For individual services and supplies, your Medicare Part B costs may vary. Some preventive services are completely covered if your provider accepts Medicare assignment. If the Medicare Part B deductible applies, you must pay all costs until you meet the yearly deductible amount before Medicare begins paying its share.
After your deductible is met, you typically pay 20% of the Medicare-approved amount for the service. You may also owe a copayment for certain outpatient services.
Alternatives to Original Medicare Part B
If you feel you might need extra help paying your expenses, you can purchase a Medigap plan to help cover expenses for drugs for a chronic illness or other medical needs.
There are also Medicare Advantage plans (Medicare through a private insurer that covers Parts A and B and sometimes D) if you choose not to go with Original Medicare. You may not have Medicare Advantage and Medigap at the same time.
These alternatives incur the same Part B premium costs (plus the extra premiums of these programs). However, with Medigap you have the peace of mind of knowing your extra costs are covered, and with Medicare Advantage there is a maximum limit on what you can spend out of pocket per year on Part A and B expenses.