There are four basic parts of Medicare: A, B, C, and D. Each part helps pay for certain medical services. Here are 5 things to know about Part B:

#1  Part B is the second of two parts of what is considered “Original Medicare”. (Part A is the other).

#2  Most people have to pay a premium for Part B. The standard monthly Part B premium in 2020 is $144.60.  Monthly premium payments may be less than the standard amount if you enrolled in Part B in 2019 or earlier and your premium payments are deducted from your Social Security check.  Your premium may be more than the standard amount based on your income. You will pay an income-related monthly adjustment amount (IRMAA) if your reported income from 2018 was above $87,000 for individuals or $174,000 for couples. Part B charges a penalty if you don’t sign up when you are first eligible and you don’t have a valid waiver like employment-based coverage. The penalty is 10% of the monthly premium amount for each full 12-month period that you could have had Part B but didn’t sign up for it. The penalty is added to your monthly premium payment for as long as you’re enrolled in Part B.

#3  Medicare Part B helps pay for doctor visits and outpatient care.  This includes, for example, wellness visits, preventive care, lab services, diagnostic tests, physical therapy, diabetic screenings, mental healthcare, durable medical equipment, ambulatory surgery center services, ambulance and emergency room services.

#4  Part B benefits include both a deductible and coinsurance. The annual Part B deductible is indexed annually; $198 in 2020.  For coinsurance, beneficiaries generally pay 20% of the Medicare-approved amount for the covered services utilized.  There is no annual out-of-pocket maximum!  (See #5 Medicare Supplement). Medicare pays the remaining 80%.

#5  Most people either add a Medicare Supplement (Medigap) Plan or they opt to enroll in a Medicare Advantage Plan.  Both of these options in different ways can serve to limit liability, extend benefit periods, and cover some out of pocket costs (like deductible and coinsurance) associated with both Medicare Parts A and B.


You can read about Medicare Part A in this previous post — Medicare Basics: 5 Things to Know About Medicare Part A..