Medicare Part B Premiums

Medicare Part B premiums are monthly fees that Medicare participants pay for medical insurance to cover services that are not covered in Medicare Part A. Part B covers things like doctor visits, lab work, and medical equipment. By contrast, Medicare Part A, or hospital insurance, does not require most people to pay a premium.

Medicare is a U.S. federal health program that is divided into two main parts, A and B. Part A covers a large portion of hospital-related costs for eligible people over the age of 65 and only includes medically necessary and skilled care, not custodial care. It can include hospital stays, hospices, and skilled nursing facilities.

Part B is optional and pays a portion of non-hospital provided medical care, such as doctor visits and other outpatient services. Part B also covers preventive services, ambulatory services, mental health costs, and specific medical equipment. There is a monthly fee for this program and premium amounts vary depending on the individual's income.

Part B coverage includes a deductible of $185 per year in 2019 (and $198 in 2020). The co-pay or coinsurance is 20%, meaning that you pay 20% of approved services. Medicare helps individuals when they may have serious health problems but lack funding for treatment.

Medicare subsidizes individuals who are: age 65 or older; a U.S. citizen or permanent legal resident for five years; disabled and have collected Social Security for a minimum of two years; undergoing dialysis for kidney failure or in need of a kidney transplant; or who have Amyotrophic Lateral Sclerosis, Lou Gehrig's disease.

In most cases, individuals apply for Medicare at the age of 65, but the enrollment period begins three months before the month of the 65th birthday and lasts three months after that, giving a seven-month window to enroll in Parts A, B, C, and D.

Medicare was expanded in 1997 and refined in 1999 to include Part C Medicare + Choice, now known as Medicare Advantage. Part C gives Medicare beneficiaries the opportunity to enroll in private health care plans and receive all Medicare services, including Part A and Part B, from a private provider. A menu of offerings is available with a variety of coverage options, co-payments, and monthly costs. Medicare Advantage also covers costs not provided by Parts A and B.

In 2006, Medicare expanded again to offer Part D, which is an optional insurance program for a monthly fee in exchange for prescription drug coverage. The monthly cost varies widely depending on coverage options. While Part D is a voluntary program, Medicare recipients must review their health care needs immediately upon eligibility because the cost of Part D increases each year for individuals who do not sign up immediately upon eligibility.