Medicare Part B Premium
Medicare is a federally funded program that provides health insurance to people 65 and older, as well as people with certain disabilities regardless of age. In 1965, Congress established this program as part of the Social Security Program. The goal of Medicare was to provide coverage to people aged 65 and up who did not have any health insurance, to begin with. It has now expanded to include people with end-stage renal disease and amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease. While the program helps with the cost of health care, it does not cover all medical expenses, particularly those associated with most long-term care. Medicare consists of Original Medicare, Medicare Advantage Plan, and Plan D. Medicare Part B is a part of Original Medicare
Original Medicare (also known as traditional Medicare) is divided into two parts that cover the vast majority of your medical needs. Part A of Medicare covers hospitalization, skilled nursing facilities, hospice, and home health care services. Medicare Part B covers Outpatient medical care, such as doctor visits, x-rays, bloodwork, and routine preventative care.
Read this article for a complete insight into medicare part B and its premium for high-income beneficiaries.
Part B of Medicare is referred to as “medical insurance” because it covers doctor visits and medical care received outside of the hospital. To be covered by Medicare Part B, treatment must be deemed medically necessary or preventative, just as it is with Medicare Part A.
While Part A is required for some people on disability or receiving other forms of government assistance, Medicare Part B is not. However, if you do not sign up when you are first eligible, you may face late enrollment penalties.
The eligibility rules for Part B depend on whether a person is eligible for premium-free Part A or whether the individual has to pay a premium for Part A coverage.
Individuals who are eligible for premium-free Part A are also eligible to enroll in Part B once they are entitled to Part A. Enrollment in Part B can only happen at certain times.
Individuals who must pay a premium for Part A must meet the following requirements to enroll in Part B:
Part B is a voluntary program that requires the payment of a monthly premium for all months of coverage.
Individuals already receiving Social Security or RRB benefits at least 4 months before being eligible for Medicare and residing in the United States (except residents of Puerto Rico) are automatically enrolled in both premium-free Part A and Part B. People who are automatically enrolled have the choice of whether they want to keep or refuse Part B coverage. People living in Puerto Rico who are eligible for automatic enrollment are only enrolled in premium-free Part A; they must actively enroll in Part B to get this coverage.
Individuals who are not receiving a Social Security or RRB benefit are not automatically enrolled. Individuals who previously refused Part B, or who terminated their Part B enrollment, may enroll (or re-enroll) in Part B only during certain enrollment periods. In most cases, if someone does not enroll in Medicare Part B (Medical Insurance) when first eligible, they will have to pay a late enrollment penalty for as long as they have Part B.
Premium Part B coverage can be voluntarily terminated because premium payments are required. Premium Part B coverage ends due to:
Groups that are automatically enrolled in Original Medicare are:
It’s important to note that, while you’ll be automatically enrolled, Part B is voluntary. If you want, you can postpone Part B. This could happen if you’re already covered by another plan through work or a spouse.
Keep in mind that not everyone who qualifies for original Medicare will be automatically enrolled. Some will need to register with the SSA office:
Medicare Part B covers outpatient medical services:
The basic medically-necessary services covered include:
Medicare Part B covers a wide range of medical services, from routine services like flu shots and X-rays to major expenses like organ transplants, delicate surgery to repair serious injuries, costly cancer treatments, and many others. It also covers a variety of preventive measures (such as tests and screenings), which are frequently provided at no charge to you. However, there are some services that Part B does not cover.
If you’re enrolled in the original Medicare program, these gaps in coverage include:
Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.
Each year the Medicare Part B premium, deductible, and coinsurance rates are determined according to the Social Security Act. The standard monthly premium for Medicare Part B enrollees will be $170.10 for 2022, an increase of $21.60 from $148.50 in 2021. The annual deductible for all Medicare Part B beneficiaries is $233 in 2022, an increase of $30 from the annual deductible of $203 in 2021.
Some recipients will not pay the full standard premium because of a “hold harmless” provision that prevents Part B premiums from rising faster than their Social Security cost-of-living adjustment, or COLA. Others, on the other hand, will pay more than the standard rate due to income-adjusted surcharges.
Remember that the government will use your tax return from two years ago to determine whether you will pay those monthly adjustments. So it would be your 2020 return for 2022. To request a reduction in that income-related amount due to a life-changing event such as retirement, the Social Security Administration has a form you can fill out.
The increases in the 2022 Medicare Part B premium and deductible are due to the rising prices and utilization throughout the healthcare system driving higher premiums year over year, along with expected increases in the intensity of care provided.
Congressional action to significantly reduce the increase in the 2021 Medicare Part B premium resulted in the continuation of the $3.00 per beneficiary per month increase in the Medicare Part B premium (which would have ended in 2021) through 2025.
Additional contingency reserves have been set aside as a result of the uncertainty surrounding the potential use of the Alzheimer’s drug Aduhelm by Medicare recipients. CMS launched a National Coverage Determination analysis process in July 2021 to determine whether and how Medicare will cover Aduhelm and other drugs used to treat Alzheimer’s disease. Because that process is still ongoing, there is uncertainty about how such drugs will be covered and used by Medicare beneficiaries in 2022. While the outcome of the coverage determination is unknown, and our projection in no way implies what the coverage determination will be, we must plan for the possibility of coverage for this high-cost Alzheimer’s drug, which, if covered, could result in significantly higher Medicare program expenditures.
Premiums for high-income beneficiaries who file individual tax returns with modified adjusted gross income and Beneficiaries who file joint tax returns with modified adjusted gross income:
(All figures in USD)
| Individual tax return | Married file jointly | Adjustment | Payment |
| 91K or less | 182K or less | 0 | 170.10 |
| Above 91K up to 114K | Above 182K up to 228K | 68 | 238.10 |
| Above 114K up to 142K | Above 228K up to 284K | 170.10 | 340.20 |
| Above 142K up to 170K | Above 284K up to 340K | 272.20 | 442.30 |
| Above 170K and less than 500K | Above 340K and less than 750K | 374.20 | 544.30 |
| 500K or more | 750K or more | 408.20 | 578.30 |
Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:
| File married & separate tax return | Adjustment | Payment |
| 91K or less | 0 | 170.10 |
| Above 91K up to 409K | 374.20 | 544.30 |
| Above 409k | 408.20 | 578..30 |
Your monthly premium is the amount you pay for Part B coverage each month. The standard Part B monthly premium for 2022 is $170.10. Higher-income individuals may be required to pay higher monthly premiums. Your annual income is calculated using your tax return from two years ago. So this is your 2020 tax return for 2022. There is also a late enrollment penalty, which can affect your monthly Part B premium. You will be responsible for this if you did not enroll in Part B when you were first eligible. When you are required to pay the late enrollment penalty, your monthly premium may increase by up to 10% of the standard premium for every 12 months that you were eligible for Part B but did not enroll.
A deductible is what you need to pay out-of-pocket before Part B starts to cover services. For 2022, the deductible for Part B is $233.
Coinsurance is the percentage of the cost of a service that you pay out of pocket after meeting your deductible. This is typically 20 percent for Part B.
A copay is a set amount that you pay for a service. Copays aren’t typically associated with Part B. However, there are some cases where you may need to pay one. An example is if you use hospital outpatient services.
An out-of-pocket maximum is a limit on how much you’ll have to pay out of pocket for covered services during the year. Original Medicare doesn’t have an out-of-pocket maximum.
When all medical bills are totaled, Medicare pays only about half of the total. This is due to three factors. For starters, Medicare does not cover all major medical expenses; for example, it does not cover routine physical examinations, some medications, glasses, hearing aids, dentures, and some other expensive medical services.
Second, Medicare only pays a portion of what it determines to be the proper amount for medical services (known as the approved charges). Furthermore, when Medicare determines that a particular service is covered and the approved charges for it, Part B medical insurance typically pays only 80% of those approved charges; you are responsible for the remaining 20%.
Third, the approved amount may seem reasonable to Medicare, but it is often considerably less than what the doctor charges. If your doctor or other medical provider does not accept the assignment of the Medicare charges, you are personally responsible for the difference.
Part B medical insurance pays only 80% of what Medicare determines to be the approved charge for a particular service or treatment. The remaining 20% of the approved charge, known as your coinsurance amount, is your responsibility. Furthermore, unless your doctor or another medical provider accepts the assignment, you are responsible for the difference between the Medicare-approved charge and the amount charged by the doctor or other provider, subject to the legal limit discussed below.
In most cases, Medicare covers 80 percent of the approved amount of doctor bills; you or your Medigap plan cover the remaining 20% of your doctor’s assignment of that amount as the full amount of your bill. The vast majority of doctors who treat Medicare patients will accept assignments. Some have pre-registered with Medicare and agreed to accept assignments on all Medicare patients. They are known as Medicare-participating doctors, and they are paid slightly more by Medicare than non-participating doctors.
Other doctors have not agreed to accept assignments on all patients but will do so on a case-by-case basis on some claims. Unfortunately, many doctors, particularly specialists who must compete for fewer patients, refuse to accept any assignments at all. When deciding on a doctor, find out in advance whether the doctor always takes assignment of the Medicare-approved amount, or if he or she is willing to take assignment on your bills.
For doctors, clinics, and outpatient hospital departments that are not participating Medicare providers, Medicare has a lower approved fee schedule (it pays those doctors 5 percent less for the same services). However, if a doctor (or clinic) declines an assignment, the doctor may charge you an amount over the Medicare-approved amount (15 percent ).
A doctor or other medical provider is not permitted by law to charge you more than the “limiting charge,” which is set at 15% more than the amount Medicare determines is the approved charge for a treatment or service. That means you could be personally liable (either out of pocket or through supplemental insurance) for the 20% of approved charges that Medicare does not cover, plus any amount the doctor charges up to the 15% limiting charge. Regardless of how much a doctor or other medical provider charges non-Medicare patients for the same service, you cannot be charged more than 15% more than what Medicare authorizes for that service.
However, keep in mind that Medicare only pays non-participating doctors, clinics, and outpatient hospital departments 95% of the Medicare-approved amount for a participating Medicare provider, so the limiting charge is based on this amount. As a result, a non-participating doctor’s total fee cannot exceed 9.25 percent of what a participating Medicare provider would charge.
Note that this legal limit does not apply to outpatient hospital charges
There are several types of treatments and medical providers for which Medicare Part B pays 100% of approved charges rather than the usual 80%, and for which the yearly Part B deductible does not apply. You are not required to pay the standard 20% coinsurance amount in these categories. In the majority of cases, the provider accepts the assignment of the Medicare-approved charges as the full amount, so you pay nothing.
Whether you receive home health care through Part A or Part B, Medicare pays 100% of the charges, and you are not responsible for your yearly deductible. However, if you receive medical equipment from a home health care agency (wheelchair, chair lift, special bed), you must pay the 20% coinsurance amount.
For laboratory services such as blood tests, urinalyses, and biopsies, Medicare pays 100 percent of the approved amount. And, except in Maryland, where a hospital lab can bill you for a 20% coinsurance amount as an outpatient, the laboratory must accept assignments.
Medicare Part B pays 100% of the Medicare-approved amount for any covered preventive screening examination appropriately prescribed by a physician.
Medicare pays the full 100% of its approved charges for these vaccinations, and the yearly deductible does not apply. However, the provider is not required to accept the assignment, so there may be an additional 15% charge on top of the amount Medicare approves.
Now that you’ve gone through this article you must be familiar with Medicare Part B and its premium. Medicare Part B helps cover medical services like doctors’ services, outpatient care, and other medical services that Part A doesn’t cover. Part B helps pay for covered medical services and items when they are medically necessary. Since Medicare offers different plans, it is of utmost importance that you go through the alternatives and then purchase an insurance plan. Better yet, you can pair your Medicare premium B with some other plan for extra coverage.
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