Key Takeaways

• Medicare Part B includes monthly premiums, an annual deductible, and coinsurance that can lead to significant out-of-pocket expenses if you don’t plan ahead.

• Understanding what Part B doesn’t cover and how its costs add up over time can help you avoid surprise bills and make more informed decisions about supplemental coverage.

What Medicare Part B Covers—And What It Doesn’t

Medicare Part B primarily covers medically necessary outpatient care. This includes services such as doctor visits, outpatient surgeries, durable medical equipment (DME), lab work, preventive screenings, and certain home health services. Preventive care under Part B is broad and includes screenings for various cancers, cardiovascular conditions, and diabetes.

However, Part B does not offer coverage for everything you might assume is part of outpatient care. Some of the most notable exclusions include:

• Most prescription drugs (unless administered in a clinical setting)

• Routine dental exams, cleanings, or dentures

• Vision services such as eye exams or eyeglasses

• Hearing exams and hearing aids

• Long-term custodial care (help with daily living tasks)

• Cosmetic or elective procedures

This coverage gap is where many Medicare enrollees run into unexpected expenses.

The Standard Premium and Who Pays More

As of 2025, the standard monthly premium for Medicare Part B is $185. This is the amount most enrollees pay, but your actual cost could be higher. Medicare uses your modified adjusted gross income (MAGI) from two years prior to determine if you owe an Income-Related Monthly Adjustment Amount (IRMAA).

The IRMAA applies in 2025 if your 2023 income exceeded $106,000 as an individual or $212,000 as a couple filing jointly. These surcharges are tiered and increase progressively based on income. The higher your income, the more you’ll pay on top of the base premium.

Premiums are typically deducted directly from your Social Security benefits. If you aren’t receiving Social Security yet, you’ll be billed quarterly. Either way, this is a recurring cost that requires consistent budgeting.

The Annual Deductible in 2025

In 2025, you must meet a $257 annual deductible before Medicare Part B starts sharing costs for your care. This deductible applies to most services, with some exceptions such as certain preventive care.

This deductible resets every January 1. Importantly, any payments you made the prior year do not roll over. Once the deductible is met, Medicare pays 80% of the Medicare-approved amount for covered services, and you are responsible for the remaining 20%.

If you see multiple providers or receive multiple treatments early in the year, you may meet your deductible quickly. But even then, the 20% coinsurance that follows can still be a major factor in your yearly healthcare expenses.

Coinsurance: The 20% That Can Add Up Quickly

After your annual deductible is met, Medicare typically covers 80% of the cost of approved services. That leaves you responsible for 20% of each bill, with no out-of-pocket cap.

This 20% coinsurance might not seem like much at first, but it becomes more significant in certain situations:

• Recurring specialist visits or ongoing treatments

• Expensive diagnostic imaging (like CT or MRI scans)

• Outpatient surgeries or injections administered in a clinical setting

• Chemotherapy or other costly treatments

Unlike many private insurance plans, Medicare Part B does not include an annual out-of-pocket limit. That means your financial exposure for coinsurance costs can continue indefinitely during the year.

Part B Doesn’t Cover Hospital Stays—That’s Part A

One common misconception is that Medicare Part B covers all forms of medical treatment. It does not cover inpatient hospital stays. These are handled under Medicare Part A.

Part B only covers outpatient services and care that doesn’t require formal admission to a hospital. If you are admitted, your expenses fall under Part A’s benefit structure, which includes its own deductibles, coinsurance rules, and benefit periods.

So, if you only have Part B and no other form of coverage, you could be left responsible for major hospital-related expenses.

Doctor Participation and Assignment Impact Your Costs

Even when you’re receiving covered services, how much you pay can vary depending on your doctor’s relationship with Medicare.

• Participating Providers: Accept Medicare’s approved amount as full payment. You pay 20% coinsurance after your deductible.

• Non-Participating Providers: Do not accept assignment and may charge up to 15% above the Medicare-approved amount, called the “limiting charge.”

If your provider is non-participating, your costs can quickly exceed the expected 20%. Before scheduling care, ask your provider if they accept Medicare assignment.

Timing and Penalties: The Price of Missing Your Window

When you become eligible for Medicare, you have a seven-month Initial Enrollment Period (IEP) to sign up. It starts three months before the month you turn 65, includes your birth month, and continues for three months after.

If you miss this window and don’t qualify for a Special Enrollment Period, you’ll pay a permanent late enrollment penalty. The penalty is 10% for every full 12-month period you were eligible but didn’t enroll, and it applies to your premium for as long as you have Part B.

This penalty doesn’t go away, and it can significantly increase your monthly premium over time.

Budgeting for Preventive and Diagnostic Services

Part B covers many preventive services at no cost to you, such as flu shots, screenings for cancers and cardiovascular conditions, and annual wellness visits. These are designed to catch conditions early, before they require more expensive treatments.

However, the moment a service shifts from preventive to diagnostic, your costs change. For instance:

• An initial screening mammogram may be covered in full.

• A diagnostic mammogram or biopsy triggered by that screening will result in 20% coinsurance.

Understanding this distinction helps you prepare for potential bills after routine checkups turn into diagnostic care.

Home Health and Durable Medical Equipment

Part B can help cover home health services, such as intermittent skilled nursing care, physical therapy, and speech-language pathology services. To qualify:

• Your doctor must certify that you are homebound and in need of skilled care.

• The services must be provided by a Medicare-approved agency.

Part B also covers durable medical equipment (DME) like walkers, hospital beds, blood sugar monitors, and oxygen equipment. Once your deductible is met, Medicare pays 80% of the approved cost, and you cover the remaining 20%.

Even standard equipment can result in substantial out-of-pocket expenses if used frequently or replaced often.

How Medicare Coordinates With Other Coverage

Medicare often works in tandem with other forms of insurance. Knowing how your policies coordinate can prevent delays or denials in payment.

Here’s how coordination works:

• Primary payer: Pays first and covers services up to its limits.

• Secondary payer: Covers some or all of the remaining balance.

If you have employer-sponsored insurance, retiree coverage, or Medicaid, your provider will follow a coordination of benefits process. Failing to understand this structure can result in unexpected bills if a claim is denied or partially paid.

Out-of-Pocket Limits: What Part B Doesn’t Have

Part B does not impose a cap on how much you can pay in a given year. That means:

• There’s no maximum limit to your coinsurance costs.

• No maximum on excess charges from non-participating providers.

• No built-in financial stop-loss to protect you in a high-use year.

This is a major reason why many Medicare enrollees choose to supplement their coverage with a Medigap plan or other insurance that helps control these out-of-pocket expenses.

When Costs Increase: Annual Adjustments to Watch

Every year, Medicare premiums and deductibles are reevaluated and typically increase. In 2025, the standard Part B premium rose from $174.70 in 2024 to $185. Similarly, the deductible increased to $257.

These changes are usually announced in the fall and take effect in January. If you’re living on a fixed income, these yearly increases can affect your ability to plan ahead.

Also note: IRMAA brackets are adjusted periodically. If your income changes due to events like selling property or withdrawing from retirement accounts, your premium could go up even if your health doesn’t change.

Why Knowing the Details Matters

Understanding the full scope of Medicare Part B helps you:

• Identify coverage gaps before they affect you

• Evaluate whether you need additional insurance

• Plan your medical care more efficiently

• Avoid surprise charges from misinterpreting your coverage

Part B is essential for outpatient care, but its costs can be unpredictable. Each appointment, procedure, or test has the potential to bring added charges unless you’re fully informed.

Taking Control of Your Medicare Budget in 2025

Being on Medicare doesn’t automatically mean healthcare becomes inexpensive or simple. Part B brings critical outpatient coverage, but it also introduces ongoing costs—monthly premiums, annual deductibles, coinsurance, and potential surcharges—that can grow over time.

You can reduce financial stress by reviewing your costs regularly, understanding how Part B interacts with other insurance, and preparing for changes each year. If you’re unsure how to proceed, getting professional support can make a significant difference.

To explore your options or ask questions about supplemental coverage, speak to a licensed agent listed on this website for clear, personalized guidance.