Medicare Part B Sounds Like a Bargain—But These Costs Say Otherwise

Key Takeaways

• While Medicare Part B offers valuable coverage, the monthly premiums, annual deductible, and ongoing coinsurance can significantly impact your budget.

• Your income, enrollment timing, and use of outpatient services directly affect how much you pay for Part B—sometimes far beyond the standard premium.

What Medicare Part B Actually Covers

Medicare Part B is your gateway to outpatient care. It helps cover:

• Doctor visits (primary and specialists)

• Preventive screenings and vaccines

• Outpatient surgeries

• Durable medical equipment (DME)

• Mental health services (both inpatient and outpatient settings)

• Diagnostic tests (like MRIs, X-rays, and lab work)

• Ambulance services

This coverage makes it an essential part of Original Medicare. But while the benefits seem clear and valuable, the financial side often catches people off guard.

Monthly Premiums Aren’t Always the Same

As of 2025, the standard Medicare Part B premium is $185 per month. However, this rate isn’t universal. Your premium can rise if your income exceeds certain thresholds.

Income-Related Monthly Adjustment Amount (IRMAA)

If your modified adjusted gross income (MAGI) from two years ago (2023 for 2025 premiums) exceeds $106,000 for individuals or $212,000 for couples filing jointly, you will pay a higher premium.

• The surcharge is automatically applied by Social Security.

• The increase can push your monthly cost significantly above the $185 base rate.

This means your actual cost for Part B could range from $185 to over $500 monthly, depending on your income.

The Deductible Comes First

Before Medicare Part B pays for most services, you must meet an annual deductible. In 2025, that amount is $257.

You pay 100% of approved outpatient services until you meet this deductible. That includes things like:

• A routine doctor visit

• A blood test

• A same-day outpatient procedure

This upfront cost resets each calendar year.

20% Coinsurance Adds Up Quickly

Once you meet the deductible, Medicare Part B pays 80% of approved charges. You are responsible for the remaining 20%, with no annual cap unless you have supplemental coverage.

Common services that require 20% coinsurance include:

• Outpatient surgery at a hospital

• MRIs and CT scans

• Durable medical equipment like walkers or wheelchairs

• Chemotherapy

That 20% can become substantial. A $2,000 bill would leave you with $400 in out-of-pocket costs, and if you receive ongoing care, that percentage doesn’t stop building.

Emergency Services and Ambulance Rides Aren’t Fully Covered

If you require an ambulance or are treated at a hospital outpatient facility without being admitted, Part B applies. These services often come with substantial charges:

• Ambulance rides are typically subject to the deductible and 20% coinsurance.

• Observation status in a hospital (you are technically an outpatient) may lead to higher costs than expected.

Since there’s no out-of-pocket maximum under Original Medicare, these situations can be financially draining.

Preventive Services Are Free—but Follow-Up Care Is Not

Medicare Part B covers a wide range of preventive services with no out-of-pocket cost:

• Annual wellness visits

• Flu shots and other vaccines

• Screenings for cancer, diabetes, and heart conditions

However, if any abnormality is found and further tests or treatments are ordered, those services are billed separately. These follow-ups are subject to the deductible and coinsurance, which often leads to unexpected expenses.

Late Enrollment Can Cost You Permanently

If you delay enrolling in Medicare Part B without qualifying coverage (such as through an employer), you face a late enrollment penalty.

Here’s how it works:

• You pay an extra 10% for each full 12-month period you could have had Part B but didn’t sign up.

• The penalty is added to your monthly premium for as long as you have Part B.

For example, if you delayed enrollment by 24 months, your penalty is 20% of the base premium. In 2025, that means an extra $37 per month—for life.

This penalty doesn’t go away, even if your income drops later.

Gaps in Coverage Require Additional Planning

Part B does not cover:

• Prescription drugs (unless administered in a clinical setting)

• Routine dental, vision, or hearing care

• Long-term custodial care

• Services received outside the U.S. (with few exceptions)

If you rely solely on Part B and Part A, you could face thousands in out-of-pocket costs for services not covered.

Outpatient Care Can Still Lead to Inpatient-Level Costs

Part B applies to outpatient surgeries, same-day hospital procedures, and even some cancer treatments. In these scenarios, the 20% coinsurance alone can resemble the cost-sharing from a hospital stay.

In some cases, hospital facilities charge facility fees that are separate from provider fees, and both can trigger 20% coinsurance. This billing structure can double the costs you expect.

Annual Increases Should Be Expected

Medicare Part B costs change yearly. Premiums and deductibles are adjusted based on:

• Overall healthcare inflation

• Trust fund projections

• Federal policy changes

In 2024, the Part B premium was $174.70 and the deductible was $240. In 2025, both have increased—to $185 and $257 respectively. This trend is likely to continue, so budgeting for future increases is wise.

Appeals Are Possible—But Limited

If your income has dropped due to a life-changing event, you can request a reduction in your IRMAA amount.

Qualifying events include:

• Retirement

• Divorce

• Death of a spouse

• Loss of income-producing property

You must file Form SSA-44 with documentation. However, the process is not immediate and requires supporting evidence.

Supplemental Coverage May Be Essential

Because Medicare Part B doesn’t have an annual out-of-pocket limit, many people choose additional coverage to help reduce financial risk. These can include:

• Medicare Supplement (Medigap) plans

• Employer or retiree group coverage

• Medicaid (for low-income individuals)

Even with extra coverage, you should verify whether your plan helps with:

• Copayments and coinsurance

• Deductibles

• Services not covered by Original Medicare

Without it, you bear the full brunt of uncovered expenses.

Medicare Advantage Isn’t Part B Alone

Some people think Medicare Advantage (Part C) replaces Part B, but that’s not how it works. You must still be enrolled in both Parts A and B to join a Part C plan.

Part B premiums must still be paid even when enrolled in a Medicare Advantage plan. The costs may differ depending on the plan, but the requirement to pay Part B’s base premium remains unchanged.

Understanding Your Coverage Helps You Prepare

When you look at Medicare Part B on the surface, the base premium seems affordable. But when you add the deductible, coinsurance, coverage exclusions, and potential IRMAA adjustments, the total cost can surprise you.

You need to:

• Plan for coinsurance expenses

• Enroll on time to avoid penalties

• Know what services Part B does not cover

• Consider supplemental coverage to reduce risk

These steps will help you manage your healthcare budget more effectively and avoid costly surprises.

Prepare for More Than Just a Premium

Medicare Part B offers valuable outpatient coverage, but affordability depends on how well you understand the financial obligations it brings. Don’t let the relatively low base premium fool you into underestimating your costs. From income-based surcharges and late penalties to the lack of a spending cap, Part B can hit harder than expected.

Speak with a licensed agent listed on this website to understand your options, discuss supplemental coverage, and prepare a personalized Medicare plan that works for your health and financial goals.