Medicare Part B covers outpatient medical services, which in practice means most of the care you receive outside a hospital stay: doctor visits, preventive screenings, lab tests, outpatient surgeries, mental health services, durable medical equipment, and certain prescription drugs administered in clinical settings. It is sometimes called “medical insurance” to distinguish it from Part A’s hospital coverage, and for most seniors it represents the piece of Medicare they interact with most frequently. But the details of what falls inside and outside Part B’s boundaries can be surprising, and the cost-sharing structure catches many people off guard.
Doctor Visits and Specialist Care
The backbone of Part B is coverage for visits to physicians and specialists. Whether you are seeing a primary care doctor for a routine checkup, a cardiologist for a heart condition, or a dermatologist for a suspicious mole, Part B pays its share. The standard arrangement is that Medicare covers 80 percent of the approved amount after you meet the annual deductible, and you pay the remaining 20 percent as coinsurance. That 20 percent has no cap, which is one reason many seniors carry supplemental insurance.
Part B also covers diagnostic tests ordered by your doctor, including blood work, urinalysis, X-rays, CT scans, and MRIs. If your doctor refers you to a specialist, the specialist visit is covered under the same terms. Second opinions before surgery are covered, and in some cases Medicare will pay for a third opinion if the first two disagree.
Telehealth has become a meaningful part of how seniors access Part B services. Before the pandemic, very few Medicare beneficiaries used telehealth for primary care. Among roughly 200,000 beneficiaries in one study, only about 1,400 used telehealth before 2020, compared to nearly 74,000 during the pandemic. Psychiatry and neuropsychiatry specialties showed the highest telehealth adoption, with over half of neuropsychiatry services delivered remotely.1PubMed Central. Shifting Patterns in Primary Care Telehealth Utilization Among Medicare Beneficiaries and Providers Many of those expanded telehealth flexibilities have been extended by Congress beyond the public health emergency, so video visits remain a covered Part B benefit for a wide range of services.
Preventive Services and Screenings
When Medicare launched in 1965, it explicitly excluded preventive care. The original program was designed to cover treatment for illness, not to keep people from getting sick in the first place.2PubMed. Politics of prevention: expanding prevention benefits in the Medicare program That philosophy changed over the following decades through a series of legislative expansions, and today Part B covers a substantial list of preventive services, many of them at no cost to you when provided by a participating provider.
The most visible of these is the Annual Wellness Visit, introduced in 2011 as part of the Affordable Care Act. This is not a head-to-toe physical exam but rather a structured visit focused on creating or updating a personalized prevention plan. It involves health risk assessments, a review of your medical and family history, cognitive screening, and a schedule of recommended screenings and vaccinations. Despite being free to beneficiaries, many clinicians and patients still do not participate in the visit, which means a significant number of seniors miss out on a benefit designed specifically for them.3PubMed Central. Adoption and Value of the Medicare Annual Wellness Visit: A Mixed-Methods Study
Cancer screenings are another major category. Part B covers mammograms for breast cancer, colonoscopies and other tests for colorectal cancer, lung cancer screening with low-dose CT for qualifying individuals, Pap smears and pelvic exams for cervical and vaginal cancers, and prostate cancer screening. Coverage policies for these screenings generally follow recommendations from the U.S. Preventive Services Task Force, though the specific age thresholds and intervals can vary by test. Researchers have noted that these screening policies can unintentionally contribute to health disparities, since groups with higher cancer risk may benefit from earlier or more frequent screening than current guidelines recommend.4Journal of the American College of Radiology. Relationships Between Health Care Disparities and Coverage Policies for Breast, Colon, and Lung Cancer Screening
Other covered preventive services include flu shots, pneumococcal vaccines, hepatitis B shots for at-risk individuals, cardiovascular disease screening blood tests, diabetes screening, depression screening, and bone density measurements for people at risk of osteoporosis. Medicare also covers diabetes self-management training, which has been a reimbursable outpatient benefit since 2000 and is designed to help beneficiaries learn to manage their condition through diet, exercise, and medication adherence.5PubMed. Use of Medicare’s Diabetes Self-Management Training Benefit When these preventive services are coded correctly and provided by an accepting provider, you should owe nothing out of pocket.
Outpatient Therapies
Part B covers physical therapy, occupational therapy, and speech-language pathology services when they are medically necessary and ordered by a doctor. You can receive these in a therapist’s office, a hospital outpatient department, or, in some cases, your home. The standard 80/20 cost-sharing applies after your deductible.
Congress has historically set annual spending caps on outpatient therapy, and while these caps have been modified and eventually repealed, the legacy system is worth understanding. For years, if your therapy costs exceeded a set dollar threshold in a calendar year, your claims faced additional documentation requirements and manual review. In 2011, for example, the cap was $1,870 for physical therapy and speech-language pathology combined, and a separate $1,870 for occupational therapy.6Physical Therapy. Refinements of the Medicare Outpatient Therapy Annual Expenditure Limit Policy The Bipartisan Budget Act of 2018 permanently repealed those hard caps, replacing them with a threshold above which claims automatically trigger a medical review. So there is no longer a dollar limit that cuts off your therapy coverage, but high-cost cases still get extra scrutiny from Medicare.
For seniors recovering from joint replacement, stroke, or other conditions requiring extended rehabilitation, this change was significant. If your therapist determines ongoing treatment is medically necessary and documents it properly, Part B will continue to cover it even when costs are substantial.
Mental Health Services
Part B covers outpatient mental health care, including visits with psychiatrists, psychologists, clinical social workers, and other licensed mental health professionals. Services covered include individual and group therapy, diagnostic evaluations, medication management when provided by a psychiatrist, and partial hospitalization programs for intensive outpatient psychiatric care.
Mental health coverage under Part B has expanded considerably since the program’s early years. When Medicare broadened its mental health benefits by eliminating annual outpatient treatment limits and extending direct reimbursement to clinical psychologists and social workers, per capita mental health spending under Part B more than doubled in inflation-adjusted terms.7PubMed Central. Trends in Medicare Part B mental health utilization and expenditures: 1987-92 More recently, Medicare has worked to bring mental health cost-sharing in line with other medical services. For years, beneficiaries paid a higher coinsurance rate for outpatient mental health visits than for other doctor visits. That disparity was phased out, and today the coinsurance for mental health visits is the same 20 percent that applies to other Part B services.
Substance use disorder treatment also falls under Part B’s mental health umbrella, including outpatient counseling, medication-assisted treatment, and screening for alcohol misuse. Given the telehealth expansion discussed earlier, many of these services can now be accessed remotely, which has been particularly valuable for seniors in rural areas or those with mobility challenges.
Prescription Drugs Administered in Clinical Settings
Part B and Part D divide the prescription drug world in a way that confuses many people. Part D is the standalone drug plan that covers medications you pick up at a pharmacy. Part B covers drugs that are administered to you by a health care provider, typically through injection or infusion in a doctor’s office, hospital outpatient department, or sometimes at home.
This category is not small. In 2016, Medicare Part B spending on prescription drugs reached $29.1 billion, with the bulk going to medications administered by injection or infusion.8JAMA Internal Medicine. Analysis of Proposed Medicare Part B to Part D Shift With Associated Changes in Total Spending and Patient Cost-Sharing for Prescription Drugs Think chemotherapy drugs infused at an oncology clinic, biologic medications for autoimmune conditions, certain osteoporosis injections, and some vaccines. Part B also covers oral anti-cancer drugs if the same drug is available in an injectable form, as well as certain immunosuppressive drugs for transplant recipients.
The cost-sharing math for Part B drugs can be steep. Because you pay 20 percent coinsurance with no annual out-of-pocket maximum, expensive infused medications can produce very large bills. The median annual patient cost-sharing for brand-name Part B drugs was about $4,700 in one analysis, and for some drugs it ran well over $9,000 a year.8JAMA Internal Medicine. Analysis of Proposed Medicare Part B to Part D Shift With Associated Changes in Total Spending and Patient Cost-Sharing for Prescription Drugs This is one of the areas where supplemental insurance or Medicaid dual eligibility makes the biggest practical difference. Without additional coverage, a senior receiving a biologic infusion every few weeks can face thousands of dollars in coinsurance.
Durable Medical Equipment and Ambulance Services
Part B covers durable medical equipment, sometimes abbreviated as DME, when your doctor orders it for use in your home. This includes items like wheelchairs, hospital beds, walkers, oxygen equipment, CPAP machines for sleep apnea, and blood sugar monitors for diabetes. The equipment must be medically necessary and prescribed by your provider. Medicare pays 80 percent of the approved amount, and you pay 20 percent. For some equipment, Medicare rents rather than purchases, so you may receive monthly rental payments rather than a single purchase.
Ambulance services are also a Part B benefit when ground or air ambulance transportation is medically necessary and other forms of transportation would endanger your health. The key word is “medically necessary.” If you could safely travel by car but choose an ambulance for convenience, Medicare will not cover it. Emergency ambulance trips to the nearest appropriate hospital are generally covered without question. Non-emergency ambulance transport requires a physician’s written order certifying that it is medically necessary.
Part B additionally covers prosthetic devices like artificial limbs and eyes, corrective lenses after cataract surgery, therapeutic shoes for people with diabetes and severe foot disease, and some home health services when you are homebound and need skilled nursing care or therapy on an intermittent basis.
What Part B Does Not Cover
The gaps in Part B catch many seniors by surprise, and the most notable ones involve services that most people consider basic health care. Medicare explicitly excludes routine dental care, routine eye exams and eyeglasses, and hearing exams and hearing aids.9JAMA. Consideration of Dental, Vision, and Hearing Services to Be Covered Under Medicare These exclusions date back to the original 1965 legislation and have persisted despite repeated calls for change.
The dental exclusion is particularly consequential. Because dental care is not covered, Medicare beneficiaries are significantly more likely to seek emergency department care for non-traumatic dental problems compared to people with commercial insurance.9JAMA. Consideration of Dental, Vision, and Hearing Services to Be Covered Under Medicare Emergency rooms can manage pain and infection but generally cannot perform the definitive dental work needed to fix the underlying problem, creating a cycle of repeat visits that is expensive for Medicare and miserable for the patient.
Other services not covered by Part B include long-term custodial care in a nursing home, most cosmetic surgery, routine foot care in most cases, care received while traveling outside the United States, and acupuncture for conditions other than chronic low back pain. Some Medicare Advantage plans (Part C) offer supplemental benefits like dental, vision, and hearing that original Medicare does not, which is one reason those plans have grown in popularity.
The Observation Status Problem
One of the most confusing coverage issues in Medicare involves hospital observation status. If you go to the emergency room and are kept in the hospital for monitoring, you might assume you have been admitted as an inpatient. But hospitals sometimes classify patients as being under “observation,” which is technically an outpatient status. The distinction matters enormously for your wallet.
Inpatient hospital stays are covered under Part A. Observation stays are covered under Part B. Because Part B has different cost-sharing rules, the financial exposure changes. More critically, Medicare only covers a subsequent stay in a skilled nursing facility if you have had a qualifying inpatient hospital stay of at least three consecutive days. Days spent under observation status do not count toward that three-day requirement. A senior who spends four days in the hospital under observation, then needs skilled nursing care for rehabilitation, may discover that Medicare will not pay for the nursing facility at all.
Federal law now requires hospitals to notify you if you have been in observation status for more than 24 hours, through what is called the MOON notice (Medicare Outpatient Observation Notice). If you receive one and believe you should be formally admitted, you can ask the medical team to reconsider or, after discharge, file an appeal. This is an area where awareness can save you tens of thousands of dollars.
How Medigap Interacts with Part B
Because Part B’s 20 percent coinsurance has no annual cap, many seniors with Original Medicare purchase a Medigap (Medicare Supplement Insurance) policy to cover some or all of the cost-sharing. Medigap plans are sold by private insurers and come in standardized letter-designated plans. The most comprehensive ones cover the Part B coinsurance entirely, meaning you pay nothing beyond your Medigap premium for most covered services.
That peace of mind comes with a trade-off at the system level. Research using data on the full population of Medicare beneficiaries found that having Medigap coverage increases an individual’s total Medicare spending by about 22 percent.10American Economic Association. Externalities and Taxation of Supplemental Insurance: A Study of Medicare and Medigap When patients face little or no cost-sharing at the point of care, they tend to use more services. Whether that additional utilization represents overuse or simply care that people without supplemental coverage are forgoing is a matter of ongoing debate.
For the individual senior, though, the decision comes down to risk tolerance and personal finances. If you are healthy and comfortable absorbing occasional 20 percent coinsurance charges, going without Medigap saves you the monthly premium. If you have chronic conditions requiring frequent specialist visits or expensive infused medications, the coinsurance exposure without supplemental coverage can be severe. There is no right answer that applies to everyone.
Finding Providers Who Accept Part B
Part B only works if you can find providers who accept it. The vast majority of physicians do participate in Medicare, but participation comes in different flavors. A “participating” provider accepts the Medicare-approved amount as full payment for all covered services. A “non-participating” provider still takes Medicare but can charge up to 15 percent more than the approved amount, and you pay the excess. A small number of providers opt out of Medicare entirely and enter private contracts with patients, meaning Medicare pays nothing for their services.
The opt-out phenomenon has drawn attention over the years, but research examining it found that very few providers found opting out attractive, and the departure of this small group did not appear to create access problems for beneficiaries overall.11PubMed Central. Provider Opt-Out Under Medicare Private Contracting Providers who opted out tended to differ from those remaining in Medicare in terms of specialty and practice characteristics. In practice, opt-out is most common among psychiatrists and certain procedural specialists, so the access impact is concentrated in particular fields rather than spread broadly across medicine.
You can check whether a specific provider participates in Medicare through the Medicare.gov provider directory, or simply ask the office before scheduling. If you see a non-participating provider, ask in advance what the excess charge will be so you are not surprised by the bill. And if a provider has opted out entirely, know that neither Medicare nor your Medigap policy will pay any portion of the bill, and the full cost rests with you under a private contract.
Part B Premiums and Income-Related Adjustments
Unlike Part A, which most people receive premium-free based on their work history, Part B requires a monthly premium. The standard premium is set annually by the Centers for Medicare and Medicaid Services and is typically deducted directly from your Social Security check. For 2025, the standard Part B monthly premium is $185.00, up from $174.70 in 2024.
Higher-income beneficiaries pay more. Medicare uses your tax return from two years prior to determine whether you owe an Income-Related Monthly Adjustment Amount, commonly called IRMAA. The surcharges kick in at modified adjusted gross incomes above $106,000 for individuals and $212,000 for married couples filing jointly, and they increase in tiers. At the highest income level, the total monthly Part B premium can exceed $590. If your income has dropped significantly since the tax year Medicare is using, due to retirement, a spouse’s death, or another qualifying life event, you can request that the Social Security Administration use more recent income data instead.
In addition to the premium, Part B has an annual deductible, which is $257 for 2025. Once you meet that deductible, the standard 80/20 cost-sharing applies to most services. Preventive services covered at 100 percent, like the Annual Wellness Visit and many screenings, are exempt from the deductible entirely.