Why Medicare Part B Comes With Monthly Premiums—and Still Doesn’t Cover Everything

Key Takeaways

• Medicare Part B charges a monthly premium because it covers ongoing outpatient care, which accounts for a substantial portion of healthcare usage in retirement.

• Even with a monthly premium, Part B still doesn’t cover everything—you are responsible for deductibles, coinsurance, and many services Medicare excludes.

What Medicare Part B Covers—And Why You Need It

Unlike Medicare Part A, which focuses on hospital stays and is often premium-free for most people, Part B provides coverage for ongoing medical care. This includes:

• Doctor visits (primary and specialist)

• Preventive services (like screenings and flu shots)

• Outpatient care (diagnostic tests, lab work, and same-day surgeries)

• Durable medical equipment (such as walkers and wheelchairs)

• Mental health outpatient care

• Some home health services

In short, Part B is essential for maintaining your day-to-day health. It helps you manage chronic conditions, catch potential problems early, and stay in touch with your doctors without facing the full cost out of pocket.

The 2025 Monthly Premium—And Why It Exists

For 2025, the standard monthly premium for Medicare Part B is $185. This amount can be higher if your income exceeds certain thresholds due to the Income-Related Monthly Adjustment Amount (IRMAA).

Why does Part B come with a premium at all? Because it pays for ongoing, high-volume healthcare services. Unlike hospital insurance, these costs recur more frequently. The monthly premium helps fund:

• Physician services

• Outpatient diagnostic labs and imaging

• Preventive screenings and vaccinations

• Emergency room visits not requiring admission

Medicare recipients typically have Part B premiums deducted from their Social Security benefits. If you’re not receiving Social Security, you’ll be billed quarterly.

Part B Doesn’t Cover Everything

While Part B gives you access to a wide range of services, it still leaves you with costs and gaps to manage. Here are some major limitations:

1. You Still Pay a Deductible and Coinsurance

In 2025, the annual Part B deductible is $257. Once you meet that, you usually pay 20% of the Medicare-approved cost for most services. There is no annual out-of-pocket cap on what you might spend.

This can add up, especially if you need frequent visits to specialists or require high-cost imaging like MRIs.

2. You Pay the Full Cost for Some Services

Part B does not cover:

• Routine dental, vision, or hearing care

• Prescription drugs you take at home (those are generally covered under Part D)

• Long-term custodial care (such as assistance with bathing or dressing)

• Cosmetic surgery

• Most chiropractic services

If you need these services, you either pay out of pocket or find other coverage.

3. Coverage Is Limited for International Care

Except in very rare cases, Medicare Part B doesn’t pay for medical care received outside the United States. If you plan to travel or live abroad, you may need supplemental insurance.

How Enrollment Affects Your Premium

You can first enroll in Part B during your Initial Enrollment Period (IEP), which is a 7-month window surrounding your 65th birthday: three months before, the month of, and three months after.

If you delay enrollment without qualifying for a Special Enrollment Period (SEP), you’ll likely face a permanent late enrollment penalty. The penalty adds 10% to your monthly premium for every 12-month period you delay signing up. For example, waiting two years could mean paying 20% more every month—for life.

SEPs apply if you or your spouse are still working and covered by an employer group plan. Once that coverage ends, you have an 8-month window to sign up without penalty.

Coordination With Other Coverage

Part B often works together with other types of coverage:

• Medicare Part A: Together, they form Original Medicare.

• Part D: For prescription drug coverage.

• Medigap: Private supplemental insurance that helps cover your Part B coinsurance and deductible.

• Employer/Union Coverage: If you’re still working past 65.

How you coordinate Part B with these options can greatly affect your total healthcare costs and access to services. For example, Medigap plans help manage Part B’s out-of-pocket expenses but require you to stay enrolled in both Part A and B.

Premium Adjustments Based on Income

Higher-income individuals pay more for Part B through IRMAA. These adjustments are based on your Modified Adjusted Gross Income (MAGI) from two years prior. For 2025, the thresholds begin at $106,000 for individuals and $212,000 for couples filing jointly.

The Social Security Administration uses your IRS tax return from 2023 to determine your 2025 IRMAA. If your income has dropped significantly due to life-changing events (retirement, divorce, etc.), you can request a reconsideration.

What to Do If You Can’t Afford the Premium

If the standard premium is unaffordable, you may qualify for help through:

• Medicare Savings Programs (MSPs): These state-run programs help cover Part B premiums and sometimes deductibles and coinsurance.

• Medicaid: If your income and assets are low enough, you may qualify for full dual eligibility.

• Extra Help: While primarily for Part D, this program sometimes works alongside MSPs.

Apply through your state Medicaid office or Social Security to see if you qualify.

What Happens if You Drop Part B?

Some people consider dropping Part B to save money—especially if they don’t use healthcare services often. But this move can be risky:

• You may not be allowed to re-enroll until the General Enrollment Period (January 1–March 31), with coverage beginning in July.

• You may face lifetime penalties.

• You could be left without coverage for essential outpatient services.

You should never drop Part B without discussing it with a licensed agent or Medicare expert to understand the full implications.

Coverage Doesn’t Start Immediately Unless You Act Early

If you enroll during the first three months of your Initial Enrollment Period, your Part B coverage starts the month you turn 65. If you enroll later in the window, your start date will be delayed by 1 to 3 months.

This is critical to know because if you have no other insurance during this gap, you could be fully responsible for your healthcare costs.

Why So Many People Pair Part B With Other Options

Because Part B only covers 80% of approved services and excludes critical areas like prescriptions and dental care, most enrollees add other forms of coverage.

Common choices include:

• Part D: For prescription drugs

• Medigap: For cost-sharing protection

• Employer/Retiree Plans: For people with access to group coverage

These additions help limit out-of-pocket costs and offer a more complete safety net.

Annual Changes You Should Watch For

Each year, Medicare adjusts the Part B premium, deductible, and IRMAA brackets. These updates are typically announced in the fall and go into effect on January 1 of the following year.

You should check for these updates annually to:

• Budget for higher premiums or deductibles

• Plan your income to manage IRMAA brackets

• Review your overall Medicare strategy

Staying Covered Takes Planning

Understanding what you’re paying for—and what you’re not getting—is key to making the most of Medicare Part B. While the monthly premium may feel like a financial burden, the protection it offers can be significant. However, it’s not automatic or complete. You need to:

• Enroll at the right time to avoid penalties

• Pair Part B with other coverage to fill the gaps

• Monitor your income to avoid unexpected surcharges

• Explore financial assistance if you qualify

Working with a licensed agent listed on this website can help you make confident, informed decisions tailored to your situation.