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Medicare Part B provides coverage for medical needs such as outpatient care and doctor visits. This health insurance policy and Medicare Part A combine to make up what is known as Original Medicare. Eligibility for the federal health insurance program requires you to be over the age of 65, to have a disability or to have a life-threatening disease.
In 2022, the standard monthly premium for Part B is $170.10, which is either deducted from your Social Security benefits or paid out of pocket. Part B coverage makes sense for most individuals due to its cheap monthly premiums, but you should evaluate your current health insurance coverage before enrolling in the federal plan.
What is Medicare Part B and what does it cover?
Medicare Part B is a portion of Original Medicare, which is the federal health insurance program for individuals who are 65 and older or who have a qualified disability.
Part B is known as the medical insurance portion of Medicare, meaning it provides coverage for preventive and other medical services. Medicare Part A provides coverage relating to hospital expenses.
Some examples of Medicare Part B expenses include:
- Ambulance services
- Lab tests
- Doctor visits
- Some medical equipment
Medicare Part B eligibility and enrollment
Medicare Part B is available to U.S. citizens and legal residents who fall under one of the following criteria:
- Over the age of 65
- Under the age of 65 with a disability
- Have end-stage renal disease
- Have Lou Gehrig's disease (ALS)
If you contributed to Social Security while working and are getting benefits for at least four months prior to turning 65, you will be enrolled in Medicare Part A automatically. You'll also be enrolled in Part B, but you can choose to decline it since you must pay a separate monthly fee for Part B insurance.
If you do not receive benefits from Social Security, then you'll need to manually enroll in Medicare Part B. Enrollment begins three months before your 65th birthday and ends three months after the month you turn 65, for a total of seven months.
During this initial enrollment period, you can sign up for any part of Original Medicare. When you enroll before the month you turn 65, coverage begins on the first day of your birth month. If you sign up the month you turn 65 or in the final three months of your enrollment period, your Medicare policy will be effective on the first day of the following month.
If your birthday falls on the first day of the month, your seven-month enrollment period starts and ends one month sooner. It begins four months before you turn 65 and ends two months after your birth month. If you enroll during the four months before your 65th birthday, your Medicare policy begins a month earlier as well. For example, Medicare would start on June 1 for a person whose birthday falls on July 1.
If you delay enrolling in Medicare, you may have to wait for a general enrollment period (GEP) to apply, which runs from Jan. 1 to March 31 each year. Your coverage would start on July 1 following the GEP.
What does Medicare Part B cost in 2022?
Medicare Part B enrollees have to pay a monthly premium in order to be covered. For 2022, the standard premium for Medicare Part B is $170.10.
All individuals covered by Part B must pay this premium. If you receive Social Security, the Part B fee is deducted from your monthly benefit payment. Those not on Social Security receive a quarterly bill for their Part B premium.
Along with the standard premium, Part B has an income-based monthly adjustment. The adjustment varies based on your modified adjusted gross income (MAGI) reported on your federal income tax return. Your premium for 2022 is determined by your MAGI from the 2020 tax year.
For example, if you filed taxes individually and reported a 2020 adjusted gross income of $100,000, then your Part B premium for 2022 would be $238.10, based on the standard monthly premium amount of $170.10 plus an income adjustment of $68.
Premiums for Medicare Part B are based on your taxable income filed on your 2020 federal return. Income levels and monthly Part B rates are outlined below:
Individual taxable income
Joint taxable income
Monthly Part B premium
|$91,000 or less||$182,000 or less||$170.10|
|Above $91,000 up to $114,000||Above $182,000 up to $228,000||$238.10|
|Above $114,000 up to $142,000||Above $228,000 up to $284,000||$340.20|
|Above $142,000 up to $170,000||Above $284,000 up to $340,000||$442.30|
|Above $170,000 and less than $500,000||Above $340,000 and less than $750,000||$544.30|
|$500,000 or above||$750,000 or above||$578.30|
Medicare Part B rate changes: A history and some possible relief for 2022
Over the past decade, Medicare Part B rates have risen by an average of 6% annually. A key reason for rate hikes in recent years is the cost of specialty drugs covered by Part B. Because Medicare isn't authorized to negotiate drug prices, Medicare recipients shoulder those costs in the form of higher monthly premiums.
In 2022, the standard Medicare Part B premium jumped by $21.60 — the largest dollar increase in the program's history. The rate went up partly to pay for an expensive new Alzheimer's drug called Aduhelm, which the Food and Drug Administration (FDA) approved at a very high cost. But in a rare move, the drug maker greatly reduced the price of Aduhelm — after Part B premiums were established for 2022.
Due to the decreased drug price, Centers for Medicare & Medicaid Services (CMS) is looking into lowering the 2022 Part B rate. Reducing the rate would be unprecedented and would provide relief to Medicare recipients this year, but long-term solutions are needed. One option being discussed by Congress is the Elijah E. Cummings Lower Drug Costs Now Act, which would cap drug prices and empower Medicare to negotiate costs.
Medicare Part B late enrollment fee
It is important to note that if you don't sign up for Medicare Part B during the initial enrollment period when you are first eligible, you may have to pay a late enrollment fee of up to 10% for each 12-month period that you are not enrolled.
For example, say you're in the first income bracket and would pay the standard Part B rate of $170.10. But you signed up for Medicare Part B exactly 12 months after your initial enrollment period. You would be required to pay an additional $17.01 each month for Medicare Part B ($170.10 x 10% = $17.01), for a total of $187.11. If you wait two years to enroll, your rate increases by 20% based on the Part B premium in effect that year.
Medicare Part B deductible
Medicare Part B comes with an annual deductible amount that must be met before coinsurance or copay benefits kick in. In 2022, the deductible amount is $233, meaning that after you pay out of pocket for expenses that total $233, cost sharing begins.
Typically, after you reach the deductible for the year, you are required to pay 20% of Medicare Part B approved expenses out of pocket.
For example, say you went to the doctor for a screening that cost you $150, then had a separate therapy visit that cost you $83. The total cost of these medical expenses adds up to $233, meaning you would have met your Medicare Part B deductible for the year. Then, later in the year you had another screening that cost you $150. Since you already met your deductible, you would pay just 20%, or $30 ($150 x 20% = $30), while Medicare would pay the remaining $120.
Should I enroll in Medicare Part B as soon as I'm eligible?
If you've paid into Social Security, you typically are enrolled in Medicare Part B automatically at age 65. To help you decide whether you should keep — or enroll in — Part B, you should review your health insurance circumstances before you turn 65. This will help you determine if Medicare Part B makes sense for your situation. For example, if you're covered by a qualified employer health plan, you can delay your Part B enrollment and remain on the employer plan without incurring a late enrollment penalty.
Before you decide to postpone Medicare Part B, you should confirm with your company's benefits manager that the health plan is a qualified health insurance plan as defined by the IRS. You'll also want to be sure and sign up for Part B promptly once your employer coverage ends to avoid potential late enrollment penalties at that time.
If you do enroll in Medicare Part B, you may want to consider a Medicare supplement policy to fill the coverage gaps.
Is there an alternative to Original Medicare?
Another Medicare plan type to consider is Medicare Advantage. These plans, sold through private health insurance companies, provide Medicare Part A, Part B and supplemental coverage, and often offer added benefits like dental and vision. Medicare Advantage policies can simplify your overall experience by having just one insurer to manage your health care needs, but they can sometimes be more expensive compared to Original Medicare.
If you're considering a Medicare Advantage policy, keep the following in mind:
- You must enroll in and keep both Medicare Part A and Part B to join a Medicare Advantage plan.
- If you enroll in Medicare Advantage when you first become eligible, the same Medicare enrollment periods apply.
Frequently asked questions
Can I get financial help for the cost of Medicare Part B?
Your state may be able to help you pay your Medicare Part B premium through programs such as Medicaid, the Medicare Savings Programs (MSP) and the Program of All-inclusive Care for the Elderly (PACE).
Can I enroll in Part B during a Special Enrollment Period (SEP)?
You may be able to enroll in Part B during an SEP if you postponed Medicare due to having employer-sponsored coverage, whether on your own or through your spouse. The SEP allows you to enroll in Medicare without a late penalty.
How can I avoid Part B late enrollment penalties?
You can avoid Medicare Part B late enrollment penalties by making sure you apply for Medicare when you first become eligible, during your initial enrollment period. If you're delaying enrollment because you have employer coverage, be sure it is a qualified health plan.