Medicare Part B Premiums

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.

Understanding Medicare Part B Premiums

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

Part B is optional and pays a portion of nonhospital-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 (MAGI) as reported on your federal tax return from two years ago. So, for example, you would use your 2019 income to determine your 2021 premiums.

Medicare Part B coverage has an annual deductible of $203 in 2021 and $233 in 2022. 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.

Please note that Medicare Part A doesn't have a monthly premium for most people, but the deductible is $1,484 for 2021 and $1,556 for 2022. Part A  pays for inpatient hospital stays and nursing care, and there are usually no coinsurance costs for hospital stays of 60 days or less.

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 seven-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 seven-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—is 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.

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 that which your employer or spouse's employer may provide.

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.