Medicare Part B, known as medical insurance, is a federal health insurance program designed to cover services beyond hospital stays. It covers a wide range of medical services and supplies necessary for the diagnosis or treatment of a medical condition. Part B is an elective program for most eligible individuals, requiring enrollment and a monthly premium. This coverage manages costs associated with outpatient care, medical equipment, and preventative health services.
Defining the Scope of Coverage
Medicare Part B covers a broad array of medically necessary services, which are those required to treat an illness, injury, or to improve the function of a malformed body part. This includes services provided by doctors and other healthcare professionals in an outpatient setting, such as office visits, surgeries, and diagnostic tests. Outpatient hospital services are also covered when you are not formally admitted as an inpatient.
A primary element of Part B is its coverage of preventative services, which are intended to help keep beneficiaries healthy and detect medical conditions early. These services include various screenings for diseases, such as diabetes and cardiovascular conditions. The coverage also includes an annual wellness visit, which focuses on developing or updating a personalized prevention plan based on your current health status.
Part B also pays for Durable Medical Equipment (DME), which is equipment that is medically required, can withstand repeated use, and is appropriate for use in the home. Examples of covered DME include walkers, wheelchairs, oxygen equipment, and hospital beds. The equipment must be considered reasonable and necessary for the beneficiary’s condition.
Understanding Beneficiary Costs
Beneficiaries are responsible for certain out-of-pocket costs, beginning with a standard monthly premium. For 2026, the standard monthly premium for Medicare Part B is set at $202.90. This amount is typically deducted automatically from a beneficiary’s Social Security payment, or the individual is billed directly on a quarterly basis if benefits are not yet received.
Before Part B coverage pays its share, beneficiaries must meet an annual deductible, which is $283 in 2026. Once the deductible is satisfied, the program generally pays 80% of the Medicare-approved amount for covered services and DME.
The beneficiary is responsible for the remaining 20% coinsurance. High-income earners may face the Income-Related Monthly Adjustment Amount (IRMAA). The IRMAA is an extra charge added to the standard premium, resulting in a higher total monthly payment based on the modified adjusted gross income reported on the tax return from two years prior.
Enrollment Periods and Penalties
Enrollment in Part B is governed by specific timing windows to avoid financial penalties. The Initial Enrollment Period (IEP) is the first opportunity to sign up, spanning seven months: the three months before, the month of, and the three months following your 65th birthday. Enrolling during this time ensures coverage begins without a late enrollment penalty.
If the IEP is missed, an individual must wait for the General Enrollment Period (GEP), which runs from January 1 through March 31 each year. Coverage for those who enroll during the GEP begins the month after enrollment. Waiting to enroll until the GEP can result in a permanent increase to the monthly premium.
An exception to the standard enrollment windows is the Special Enrollment Period (SEP). This is available to individuals who delay Part B because they, or their spouse, have health coverage through active employment. The SEP lasts for eight months, beginning the month after the employment ends or the group health coverage stops, whichever comes first. Using the SEP allows an individual to enroll without incurring the late enrollment penalty.
The late enrollment penalty is a permanent addition to the monthly premium. It is calculated as a 10% increase for every full 12-month period an individual was eligible for Part B but did not sign up and lacked qualifying coverage. This penalty is a lifelong financial consequence that applies for as long as the beneficiary has Part B.