What Are Medicare Part B Premiums?

Medicare Part B premiums are monthly fees that Medicare beneficiaries pay for insurance that covers medically necessary services and preventive services that aren't covered by Medicare Part A. Part B covers things like ambulance services, doctor visits, lab work, and medical equipment. By contrast, most people don't have to pay a premium for Medicare Part A.

Key Takeaways

  • Medicare Part B covers ambulance services, doctor visits, lab results, and certain medical equipment.
  • Part B also includes deductibles and copays.
  • In contrast to Part A, which is available to many people at no cost, Part B is paid for with monthly premiums.
  • Open enrollment for Medicare begins three months before the month of the individual's 65th birthday and continues three months after.

Understanding Medicare Part B Premiums

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, ambulance services, mental health costs, and durable medical equipment. There is a monthly fee for this program; the premium depends on your modified adjusted gross income as reported on your IRS tax return from two years ago. So, for example, you would use your 2018 income to determine your 2020 premiums.

Medicare Part B Costs for 2020
Individuals Married Filing Jointly  Married Filing Separately  Monthly Fee for 2020
$87,000 or less $174,000 or less $87,000 or less $144.60
Above $87,000 up to $109,000 Above $174,000 up to $218,000 N/A $202.40
Above $109,000 up to $136,000 Above $218,000 up to $272,000 N/A $289.20
Above $136,000 up to $163,000 Above $272,000 up to $326,000 N/A $376.00
Above $163,000 and less than $500,000 Above $326,000 and less than $750,000 Above $87,000 and less than $413,000 $462.70
$500,000 and above $750,000 and above $413,000 and above $491.60
Source: Medicare.gov. Note: Use income from two years ago to determine this year's premium.

Part B coverage has a deductible of $198 in 2020. After you meet the deductible, you typically pay 20% of the Medicare-approved amount for covered services. This is known as coinsurance. Medicare helps individuals when they may have serious health problems but lack funding for treatment.

Eligibility for Medicare Part B

In general, Medicare is available to U.S. citizens and permanent legal residents who:

  • Are age 65 or older
  • Are under age 65 and have a disability
  • Have End-Stage Renal Disease (ESRD)
  • Have Amyotrophic Lateral Sclerosis, also called Lou Gehrig's disease.

When you are first eligible for Medicare, you have a 7-month Initial Enrollment Period to sign up for Part A and/or Part B. If you're eligible when you turn 65, you can sign up during the 7-month period that:

  • Starts three months before the month you turn 65
  • Includes the month you turn 65
  • Ends three months after the month you turn 65

Medicare Part C

Medicare Part C—also called Medicare Advantage Plans—are offered by private companies approved by Medicare. If you participate in a Medicare Advantage Plan, the plan provides all of your Part A and Part B coverage, and it may provide extra coverage for things like vision, hearing, and dental. Unlike some private health insurance plans, such as Medigap, most Medicare Advantage Plans also include Medicare Part D (prescription drug) coverage. As is the case with any private health insurance policy, it's crucial to carefully consider every firm you're considering in order to acquire the best Medicare Advantage plan possible.

Medicare Part D

Medicare Part D prescription drug coverage is an optional benefit offered to anyone who has Medicare. If you choose not to get Medicare Part D coverage when you're first eligible, you may owe a late enrollment penalty if you join later, unless you have had other creditable prescription drug coverage, such as from an employer or spouse's employer.

The CARES Act of 2020

On March 27, 2020, President Trump signed into law a $2 trillion coronavirus emergency stimulus package called the CARES (Coronavirus Aid, Relief, and Economic Security) Act. It expands Medicare's ability to cover treatment and services for those affected by COVID-19. The CARES Act also:

  • Increases flexibility for Medicare to cover telehealth services.
  • Authorizes Medicare certification for home health services by physician assistants, nurse practitioners, and certified nurse specialists.
  • Increases Medicare payments for COVID-19–related hospital stays and durable medical equipment.

For Medicaid, the CARES Act clarifies that non-expansion states can use the Medicaid program to cover COVID-19–related services for uninsured adults who would have qualified for Medicaid if the state had chosen to expand. Other populations with limited Medicaid coverage are also eligible for coverage under this state option.