Medicare Part B Premium

What Is the Medicare Part B Premium?

The Medicare Part B premium is a monthly fee that Medicare beneficiaries pay if they choose to enroll in it to supplement the services available to most seniors for free with Medicare Part A.

• Medicare Part A is hospital insurance. It is available primarily to U.S. citizens and permanent residents age 65 and older. Most pay no premium for it.
• Medicare Part B covers other medically necessary services and preventative care like doctor's services, lab tests, and outpatient care. Most pay a flat monthly premium for it, which is adjusted annually.

There is also a Medicare Part D, which covers prescription costs. It is available from insurance companies that are approved to offer it.

(There is a Medicare Part C. More commonly called Medicare Advantage, it is for people who choose to enroll with a private health insurer to get Medicare services plus any additional benefits they choose to pay for.)

Understanding Medicare Part B Premiums

Medicare is a U.S. federal health insurance program that is funded by a wage tax. That is the amount labeled as FICA, for Federal Insurance Contributions Tax, on a standard paycheck.

Medicare Part A, which is free to most of those who are eligible for coverage, covers hospital-related costs as well as costs for treatment at skilled nursing facilities, hospice care, and home health care.

There is an annual deductible for Part A. You'll pay a maximum of $1,484 out of pocket in 2021 and $1,556 in 2022. There is no coinsurance payment unless a hospital stay exceeds 60 days.

Part B is insurance for outpatient medical care such as doctor visits, preventative services, ambulance services, mental health costs, and the cost of durable medical equipment.

The standard monthly fee for Part B is $148.50 in 2021 and $170.10 in 2022. It is higher for Medicare recipients who have higher incomes.

The annual deductible for Part B is $233 for 2021 and $233 in 2022. In addition, the patient pays 20% of the bill as a coinsurance payment.

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 choose to 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, most Medicare Advantage plans 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.