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Do I Have to Pay a Premium for Medicare Part B?

I Have to Pay a Premium for Medicare Part B

Medicare Part B medical insurance helps pay for a wide range of healthcare services including doctor visits, preventive care, lab tests, durable medical equipment and more. While Medicare Part A hospital coverage is usually premium-free, you do have to pay a monthly premium for Part B coverage.

Below we’ll explain what the standard Medicare Part B premiums are, how they are calculated, and what factors may increase or decrease the amount you pay each month for this important coverage.

What is Medicare Part B?

Medicare Part B is supplemental medical insurance that covers medically-necessary services and supplies received on an outpatient basis. Some examples of what Part B helps pay for include:

  • Doctor office visits
  • Preventive care like cancer screenings and annual wellness visits
  • Lab tests, x-rays and diagnostic services
  • Outpatient surgeries
  • Physical therapy, occupational therapy and speech therapy
  • Durable medical equipment like wheelchairs and walkers
  • Mental health services
  • Ambulance transportation

Basically, Part B covers a wide range of healthcare services you receive outside of an inpatient hospital setting. It is an essential component of Original Medicare (Part A and Part B) for covering these costs.

Standard Medicare Part B Premiums

Unlike Part A which is usually premium-free, pretty much everyone pays a monthly premium for Medicare Part B coverage.

In 2023, the standard monthly premium for Medicare Part B is $164.90. This means most Medicare beneficiaries will pay this base amount each month for their Part B coverage.

The Part B premium increases slightly most years to keep pace with healthcare cost inflation. For example, the standard monthly premium was $170.10 in 2022. The premium for 2023 reflects a lower than average cost-of-living adjustment of just 3.8%.

So expect to pay around $165 per month for your Part B coverage if you are subject to the standard premium rate. This premium is automatically deducted from your Social Security check each month if you qualify for premium-free Part A at age 65.

Part B Deductible

In addition to the monthly premiums, you must pay the Medicare Part B deductible once each year before coverage kicks in.

In 2023, the Medicare Part B deductible is $226. This is the amount you’ll pay out-of-pocket for covered Part B services before Medicare starts picking up its share of the costs.

Similar to premiums, the Part B deductible usually increases a small amount each year. Paying your deductible plus monthly premiums gives you access to the many essential healthcare services covered under Medicare Part B.

Late Enrollment Penalties

If you do not sign up for Medicare Part B when you are first eligible, you may have to pay a late enrollment penalty if you enroll at a later date. This penalty is equal to 10% of the current standard Part B premium for every 12-month period that you delayed enrolling.

For example, if you wait 2 years to enroll in Part B, the late penalty will make your monthly premium 20% higher (2 years x 10% per year). This late enrollment surcharge must be paid each month for as long as you have Part B coverage.

To avoid this penalty, make sure to enroll in Medicare Part B during your initial enrollment window which spans the 3 months before through 3 months after you turn 65. Have your Part B coverage start the month you turn 65 or the month after your group health insurance ends, whichever is first.

Higher income seniors may have to pay more than the standard premium each month for their Medicare Part B coverage. This is known as income-related monthly adjustment amounts (IRMAA).

If your income as reported on your IRS tax return from 2 years ago is above $97,000 as a single tax filer or $194,000 as a joint filer, you’ll pay the standard premium plus an IRMAA surcharge. Here are the 2023 Part B premium brackets:

  • $97,000 or below – $164.90 per month
  • $97,001 to $123,000 – $230.80 per month
  • $123,001 to $153,000 – $329.70 per month
  • $153,001 to $183,000 – $428.60 per month
  • $183,001 to $499,999 – $504.90 per month
  • $500,000 and above – $578.30 per month

As you can see, high earners can pay over 3 times more than the base premium. The Social Security Administration will use your most recent tax return to determine if you owe an income-related premium.

Financial Help Paying Premiums

If you have limited income and assets, your state Medicaid program may be able to help pay your monthly Part B premiums. This financial assistance is available through the Medicare Savings Programs.

To qualify, you must have monthly income below $1,549 for an individual or $2,080 for a couple in 2023. Asset limits also apply. Talk to your Medicaid office for details on available Medicare premium assistance programs.

Low-income Medicare beneficiaries may also qualify for additional cost sharing support through Medicaid or the Medicare Extra Help program. This can lower prescription drug costs and deductibles.

Should You Enroll in Part B?

Medicare Part B is optional, but almost all enrollees elect to get Part B coverage. It is very difficult to cover outpatient medical costs without Part B benefits.

Unless you have very comprehensive health coverage through an employer, union or the VA, you should strongly consider enrolling in Medicare Part B during your initial enrollment period to avoid penalties. Most beneficiaries find the monthly premium very reasonable for the coverage received.

Review the Part B coverage details and premium costs each year during Medicare open enrollment to decide if Part B fits within your healthcare budget. For most American seniors, paying the Part B premium is essential for accessing needed medical care.

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Do I have to pay a premium for Medicare Part B coverage?

Yes, you typically have to pay a premium for Medicare Part B coverage. The amount you pay can vary depending on your income level and other factors.

How much does Medicare Part B cost?

The standard premium for Medicare Part B is $148.50 per month in 2021. However, higher-income individuals may have to pay an income-related monthly adjustment amount (IRMAA) in addition to the standard premium.

What is the difference between Medicare Part B and Medicare Advantage plan?

 Medicare Part B is the part of Original Medicare that covers medical services and supplies, while Medicare Advantage plans are offered by private insurance companies and provide an alternative way to receive your Medicare benefits.

Can I have both Medicare Part B and a Medicare Supplement plan?

Yes, you can have both Medicare Part B and a Medicare Supplement plan. A Medicare Supplement plan, also known as Medigap, helps cover some of the out-of-pocket costs that Medicare Part B doesn’t cover. How do I sign up for Part B?

 You can sign up for Part B during your Initial Enrollment Period (IEP), which is usually a seven-month period that begins three months before your 65th birthday. If you have delayed enrollment, you can sign up during the General Enrollment Period (GEP) from January 1 to March 31 each year.

What is the cost of Medicare supplements?

 The cost of Medicare supplements, or Medigap plans, can vary depending on the insurance company and the specific plan you choose. It’s important to compare different plans and their costs before making a decision.

Am I eligible for Medicare?

A: You are eligible for Medicare if you are 65 years or older and a U.S. citizen or a permanent legal resident who has lived in the U.S. for at least five continuous years.

What does Medicare Supplement insurance cover?

 Medicare Supplement insurance, or Medigap, can help cover certain out-of-pocket costs of Original Medicare, such as deductibles, coinsurance, and copayments.

Does Medicare cover prescription drugs?

Original Medicare (Part A and Part B) generally does not cover prescription drugs. However, you can enroll in a Medicare Part D plan to get prescription drug coverage.

How do I get Medicare Part D coverage?

To get Medicare Part D coverage, you can enroll in a stand-alone Medicare Part D prescription drug plan or choose a Medicare Advantage plan that includes prescription drug coverage.

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