Medicare Part B is outpatient coverage that helps pay for doctor visits and other medical services and supplies. It’s something most seniors rely on and those approaching age 65 look forward to.
» Learn what Medicare Part B covers
But it does come with costs. There are premiums, deductibles, copays and, in some cases, penalties. The more you know what to expect, the better you can plan for your health care costs.
What Medicare Part B will cost you
Premiums:
Most people pay a standard monthly premium for Medicare Part B: $148.50 in 2021. That figure rises with income, however. In 2021, beneficiaries whose 2019 income exceeded $88,000 (individual return) or $176,000 (joint return) will pay a premium amount ranging from $207.90 to $504.90, depending on income. See the table below for a breakdown.
2021 Medicare Part B premiums
| Individual tax return (2019 income) | Joint tax return (2019 income) | Married & separate tax return (2019 income) | Monthly Medicare Part B premium |
|---|---|---|---|
| $88,000 or less | $176,000 or less | $88,000 or less | $148.50 |
| $88,000 to $111,000 | $176,000 to $222,000 | Not applicable | $207.90 |
| $111,000 to $138,000 | $222,000 to $276,000 | Not applicable | $297.00 |
| $138,000 to $165,000 | $276,000 to $330,000 | Not applicable | $386.10 |
| $165,000 to $500,000 | $330,000 to $750,000 | $88,000 to $412,000 | $475.20 |
| $500,000 and above | $750,000 and above | $412,000 and above | $504.90 |
Source: Medicare.gov
Deductible:
In 2021, the Part B annual deductible is $203. This is what you’ll pay before Medicare Part B coverage kicks in. The government usually adjusts the deductible amount each year.
Copays:
After you meet your deductible amount for the year, you will usually pay 20% of the Medicare approved amount of your bill. If your provider charges more than the Medicare-approved amount, your share of the bill may be more.
Penalty:
If you do not sign up for Medicare Part B during your initial enrollment period (the seven-month period starting three months before the month you turn 65) and you don’t have qualified insurance from another source, you’ll pay an extra 10% above the standard premium cost for every 12-month period you delayed. That extra premium can add up to a significant amount over the course of your retirement.
Medigap can help cover some costs
People who enroll in Original Medicare Part A and Part B often purchase Medicare Supplement Insurance, also called Medigap, to help pay for out-of-pocket costs. These policies often help with Part B copays or coinsurance, but they do not cover Part B premiums. Also, Medigap plans issued after Jan. 1, 2020, are not allowed to cover the Medicare Part B deductible.
Private insurers sell an array of standardized Medigap plans, with premiums regulated by the states. Your premiums may depend on where you live, what coverage you get and how old you are. Medigap plans are not used with Medicare Advantage plans.
The Medicare Advantage alternative
More than a third of people who sign up for Medicare choose a Medicare Advantage plan, also known as Medicare Part C.
» Learn how to compare Medicare Advantage plans
These policies, administered by private insurers, must provide the same coverage as Original Medicare. In addition, Medicare Advantage Plans may include prescription drug coverage and other benefits not included in Part A and Part B, such as dental and vision coverage.
Unlike Original Medicare, Medicare Advantage Plans often use a network of providers that plan members must use. In exchange, MA plans often cost less, with advertised premiums as low as $0 and limits on how much you will pay out-of-pocket. Be aware that in many cases, you will still have to pay the Medicare Part B premium.