Medicare Part B Medical Insurance: Costs, Coverage and Benefits

In this article...
  • What is Medicare Part B, and how does it work? Find out how to enroll in Medicare's outpatient health insurance plan and get information on likely costs and limits to care.

Medicare is the primary federal health insurance program for U.S. citizens aged 65 and over. The program serves more than 60 million Americans and pays for all or part of their covered health services.

What Is Medicare Part B?

Medicare Part B is the outpatient care benefit offered to beneficiaries enrolled in Original Medicare. Part B is an optional benefit for Medicare enrollees, though many seniors are automatically signed up for the plan when they start receiving Social Security benefits at age 65. Some younger people may also qualify for Medicare Part B if they have an eligible condition such as End-Stage Renal Disease (ESRD), Lou Gehrig’s Disease (ALS) or if they receive disability benefits from Social Security or the Railroad Retirement Board.

Part B is one of two components of what’s called Original Medicare.

While Medicare Part A covers hospital inpatient services, Part B covers many of the outpatient services seniors need most often. Part B premiums vary somewhat, but the standard deductible is relatively low and stable.

Medicare Part B Covered Services

Medicare Part B covers two basic types of care, preventive services and medically necessary services and devices.

Preventive care is typically covered by Part B and includes most diagnostic tests ordered by a doctor, certain doctors office visits and health screenings. Flu shots and some other vaccines are also usually included as covered services for most seniors.

Medically necessary services covered under Part B are extensive and cover a wide range of care.

Part B pays most of the cost of a wide range of medical procedures done in an outpatient clinic or office visit. Ambulance rides are a provided benefit under Part B, though inpatient treatment at an emergency department is paid for as an element of Part A hospital insurance if you are admitted for inpatient care.

Durable medical equipment (DME) that is considered medically necessary can be covered by Part B. This can include orthopedic devices, mobility equipment such as wheelchairs and walkers, prosthetic devices, and medical appliances, such as CPAP machines. Part B may also pay for some disposable medical supplies, such as wound dressings and diabetes testing equipment.

Some specialist services are paid for under Part B. Physical and occupational therapy are contained within the Part B insurance framework, as are rehab services and some drug and alcohol counseling. Home visits from nurses and therapists are Part B services, as are education services such as diabetes education and helper animal training.

All of the above benefits come with different conditions and qualifications. You should check with your doctor about whether your treatment services are covered by Medicare.

What Is Not Covered by Part B

Medicare Part B coverage has its limits.

Part B does not pay for inpatient care services or for most prescription drugs.

Part B also has coverage restrictions that include:

  • Long-term custodial care for adults with cognitive or mental disabilities
  • Most routine dental care
  • Routine eye exams for glasses or contact lenses
  • Routine dental care and dentures
  • Most cosmetic procedures
  • Alternative medicine, such as acupuncture
  • Hearing aids, including fitting exams and device maintenance

Some foot care is available for enrollees with diabetes or pressure ulcers, but routine foot care is not covered by Part B.

Premiums, Copayments and Coverage Limitations

Medicare Part B charges a monthly premium for the services it offers, and most beneficiaries have a coinsurance requirement and annual spend-down that must be paid before the program can help with other costs.

In 2020, the standard monthly premium for Part B is $144.20. Enrollees who earned more than $87,000 a year in 2018 may have a surcharge imposed on their 2020 Part B premium, which can get as high as $347 a month for individuals who earn more than $500,000 a year in 2018.

Part B also has a standard deductible that must be paid before benefits can kick in. In 2020, the annual Medicare Part B deductible is $198. After this is paid out of pocket, Part B is able to pay for up to 80% of all remaining costs for medically necessary outpatient care.

Signing Up for Part B

Seniors who become eligible for Medicare on their 65th birthday can sign up for Medicare Part B at the same time they sign up for Part A. Seniors who receive Social Security pensions may be automatically signed up for Part B, with their monthly premiums deducted from the monthly payment.

Seniors who have not been automatically signed up for Part B may do so by contacting the Social Security Administration or visiting an SSA office in their area. New enrollees generally have an option to sign up for other optional Medicare coverage at the same time they apply for Part B coverage.

Alternative Ways to Take Part in Medicare Part B

Most seniors who get Medicare benefits get their coverage in the traditional way, through the Original Medicare program that was first created in 1965. Some beneficiaries, however, opt into a Medicare Advantage plan to receive their benefits.

Medicare Advantage, sometimes called Medicare Part C, combines all of the same coverage seniors get from Parts A and B, and charges a single monthly premium for all covered services. Part C plans are attractive for many seniors because they can include extra benefits not paid for by Original Medicare, such as dental and vision care. Many Part C plans also offer prescription drug coverage.

For more information on Medicare Part B and how to sign up, visit Medicare.gov or speak to a Medicare plan representative.