Medicare Part B
Medical Insurance.
The 20% Nobody
Plans For.
Part B covers the outpatient side of Medicare: doctors, labs, preventive care, and durable equipment. The premium is well-known. What most people miss is that the 20% coinsurance has no annual ceiling.
The Exposure That Catches People Off Guard
After you meet the Part B deductible ($257 in 2025), Medicare pays 80% of the approved amount for most covered services. You pay the remaining 20%.
That sounds manageable until you do the math on a serious illness. A $200,000 cancer treatment course leaves you with $40,000 in Part B coinsurance. A major surgery with extended outpatient follow-up can generate tens of thousands in 20% obligations with no cap.
Original Medicare does not have a Maximum Out-of-Pocket limit. There is no point in the calendar year where Medicare begins paying 100%. This is why many people on Original Medicare add a Medicare Supplement (Medigap) plan, which picks up that 20% and in many cases the Part A deductible as well.
2025 Part B at a Glance
What Part B Covers
Part B is broader than most people realize, covering most of what happens outside the hospital walls.
Physician Services
Visits to doctors who accept Medicare assignment, whether in their office, a clinic, hospital outpatient setting, or via telehealth.
Outpatient Hospital Services
Same-day surgical procedures, observation stays, and emergency department visits that don't result in a formal inpatient admission.
Preventive Care
Annual wellness visits, flu shots, cardiovascular screenings, cancer screenings (mammograms, colonoscopies), diabetes prevention, and more, many covered at 100% with no cost-sharing.
Mental Health Services
Outpatient therapy, psychiatry, and counseling. Part B covers 80% of approved amounts after the deductible.
Durable Medical Equipment
Walkers, wheelchairs, blood sugar monitors, oxygen equipment, and other medically necessary items when ordered by a physician and provided by a Medicare-enrolled supplier.
Ambulance Services
Emergency transportation when other transport would endanger your health. Also covers some non-emergency ambulance trips when medically necessary.
Higher Earners Pay More: IRMAA
The Income-Related Monthly Adjustment Amount (IRMAA) adds a surcharge to Part B (and Part D) premiums for beneficiaries whose income exceeds certain thresholds. IRMAA is based on your reported income from two years prior.
| 2025 Individual MAGI | Monthly Part B Premium |
|---|---|
| Up to $106,000 | $185.00 (standard) |
| $106,001 – $133,000 | $259.00 |
| $133,001 – $167,000 | $370.00 |
| $167,001 – $200,000 | $480.90 |
| $200,001 – $500,000 | $591.90 |
| Above $500,000 | $628.90 |
IRMAA thresholds are doubled for married filing jointly. Applies to Part D as well.
Enrollment Timing and the Late Penalty
Your Initial Enrollment Period (IEP) is the 7-month window centered on your 65th birthday month. Starting Part B during the month you turn 65 or in the 3 prior months means your coverage begins the first of your birthday month.
If you miss the IEP and don’t qualify for a Special Enrollment Period, you must wait for the General Enrollment Period (January 1 – March 31 each year), with coverage starting July 1. And the late enrollment penalty applies.
The Part B late enrollment penalty is 10% added to your monthly premium for each full 12-month period you were eligible but didn’t enroll. This penalty is permanent, it applies for as long as you have Part B.
Exception: If you have creditable coverage through active employment (your own or a spouse’s employer with 20+ employees), you have a Special Enrollment Period when that coverage ends, no penalty applies if you enroll within 8 months.
The 20% Gap Has a Solution
Medicare Supplement plans exist specifically to fill the coinsurance gap Part B leaves behind. What’s available, what it costs, and whether it makes sense for your situation depends on your ZIP code, health, and budget. Let’s look at it together.