Understanding Medicare Part B Premiums, Deductibles, and Coinsurance

Last updated 4 months ago. Our resources are updated regularly but please keep in mind that links, programs, policies, and contact information do change.

Medicare Part B, which covers doctor visits, outpatient care, and other medical services, involves several types of costs: a monthly premium, an annual deductible, and coinsurance for services received.

This guide breaks down each of these costs for 2025, explains how they work, and explores programs available to help lower these expenses for eligible individuals.

What is Medicare Part B?

Medicare Part B is a core component of the federal health insurance program known as Original Medicare, alongside Part A (Hospital Insurance). Often referred to as Medical Insurance, Part B helps cover a wide range of medically necessary services and preventive care.

Coverage includes:

• Services from doctors and other healthcare providers: This covers visits to physicians, specialists, and other practitioners.
• Outpatient care: Services received in a hospital outpatient setting, clinic, or doctor’s office that do not require an overnight stay.
• Preventive services: Healthcare aimed at preventing illness or detecting it early, such as flu shots, COVID-19 vaccines, screenings for various conditions (like depression or cancer), and annual “Wellness” visits. Many preventive services are covered at no cost if received from a provider who accepts Medicare assignment.
• Durable Medical Equipment (DME): Medically necessary equipment prescribed by a doctor for home use, like wheelchairs, walkers, hospital beds, and oxygen equipment.
• Home health care: Certain skilled nursing or therapy services received at home.
• Ambulance services: Medically necessary transportation.
• Clinical research: Costs associated with participation in qualifying studies.
• Mental health services: Outpatient therapy, counseling, and substance use disorder treatment.
• Limited outpatient prescription drugs: Typically drugs administered in a clinical setting, like certain injections or infused drugs, some antigens, specific injectable osteoporosis drugs, blood clotting factors, and immunosuppressive drugs post-transplant. Notably, for beneficiaries using an insulin pump covered under Part B’s DME benefit, the cost for a month’s supply of covered insulin is capped at $35, and the Part B deductible does not apply.

Part B coverage is optional, but most beneficiaries choose to enroll. It complements Part A, covering services that Part A does not.

Beneficiaries typically pay a monthly premium for Part B, along with a deductible and coinsurance for services received. Individuals can receive their Part B benefits through Original Medicare or through a Medicare Advantage Plan (Part C), which is offered by private insurance companies approved by Medicare. Medicare Advantage plans must cover at least the same services as Original Medicare (Part A and Part B) but may have different rules regarding networks and cost-sharing.

For comprehensive details on what Part B covers, visit the official Medicare coverage page.

The Medicare Part B Standard Monthly Premium

Most individuals enrolled in Medicare Part B pay a standard monthly premium. This premium is a fixed amount paid each month, regardless of whether any Part B services are used during that month.

2025 Standard Premium

For 2025, the standard monthly premium for Medicare Part B is $185. This amount is set annually and can change from year to year.

How the Premium is Paid

The way beneficiaries pay their Part B premium typically depends on whether they receive benefits from Social Security or the Railroad Retirement Board (RRB).

Automatic Deduction: If a beneficiary receives Social Security or RRB benefits, the Part B premium is usually automatically deducted from their monthly benefit payment. This also applies to benefits from the Office of Personnel Management (OPM) for federal retirees.

Billing: If a beneficiary does not receive these benefits, or if their benefit amount is not large enough to cover the premium, they will receive a bill from Medicare, typically every three months. Options for paying this bill include using a Medicare account online, Medicare Easy Pay (automatic bank withdrawal), mail, or online bill pay through a bank. Information on payment methods is available at Medicare.gov Premium Payment Options.

Late Enrollment Penalty

Enrolling in Part B is optional, but delaying enrollment without having other creditable coverage (like from an active employer) can lead to a penalty. If an individual does not sign up for Part B when first eligible and doesn’t qualify for a Special Enrollment Period, they may face a late enrollment penalty.

Penalty Amount: The penalty is an additional 10% of the standard Part B premium for each full 12-month period the individual could have had Part B but did not enroll.

Duration: This penalty is not a one-time fee; it is added to the monthly Part B premium for as long as the individual has Part B coverage.

Example: If someone delayed enrollment for two full years (24 months) without qualifying for a Special Enrollment Period, their monthly premium would include a 20% penalty (10% x 2). For 2025, this would mean paying the $185 standard premium plus a $37 penalty (20% of $185), for a total monthly premium of $222.

Details on avoiding penalties can be found at Medicare.gov Avoiding Penalties.

Income-Related Monthly Adjustment Amount (IRMAA)

While most people pay the standard Part B premium, beneficiaries with higher incomes are required to pay an additional amount on top of the standard premium. This extra charge is known as the Income-Related Monthly Adjustment Amount, or IRMAA. Fewer than 8% of people with Medicare pay IRMAA.

How IRMAA is Determined

Social Security uses the Modified Adjusted Gross Income (MAGI) reported on an individual’s IRS tax return from two years prior to determine if IRMAA applies and at what level. For 2025 premiums, the income reported on 2023 tax returns is used. MAGI includes adjusted gross income plus certain tax-exempt interest.

2025 Part B IRMAA Thresholds and Premiums

The following table shows the 2025 income thresholds based on 2023 tax returns and the corresponding total monthly Part B premium (standard premium + IRMAA):

Notification and Payment

Social Security notifies beneficiaries by letter if they are subject to IRMAA. The IRMAA amount is typically deducted from Social Security benefits along with the standard premium. If not deducted, Medicare sends a separate bill for the IRMAA amount.

Changes in Income

Because IRMAA is based on income from two years prior, a significant decrease in income due to certain life-changing events (like marriage, divorce, death of a spouse, work stoppage/reduction, loss of income-producing property, etc.) might qualify an individual for a reduction or elimination of their IRMAA. Beneficiaries experiencing such events should contact Social Security to request a new determination based on more current income information. Information is available at Social Security’s IRMAA Reduction Page.

The Medicare Part B Annual Deductible

Before Medicare begins to pay its share for most Part B-covered services, beneficiaries must first pay a certain amount out-of-pocket each calendar year. This amount is the Medicare Part B annual deductible.

2025 Part B Deductible

The annual deductible for Medicare Part B in 2025 is $257.

How the Deductible Works

Beneficiaries must pay this $257 out-of-pocket for the cost of covered Part B services before Medicare starts paying its portion. This deductible applies once per calendar year. Once the deductible is met, the beneficiary typically pays coinsurance (usually 20%) for subsequent covered services for the remainder of the year.

It’s important to note that the deductible does not apply to all Part B services. For example, many preventive services, like the annual Wellness visit or certain screenings, are covered without needing to meet the deductible first, provided the provider accepts Medicare assignment. However, if additional tests or services that are not part of the preventive benefit are performed during the same visit, the deductible and coinsurance may apply to those extra services. The deductible also does not apply to the $35 monthly cap for insulin used in covered pumps.

Beneficiaries can track their progress toward meeting the deductible by reviewing their Medicare Summary Notices (MSNs), which are sent by Medicare after services are received and processed.

Medicare Part B Coinsurance

After the annual Part B deductible has been met, beneficiaries share the cost of most covered services with Medicare. This cost-sharing is known as coinsurance.

Standard Coinsurance Amount

For most Part B-covered services, the standard coinsurance amount is 20% of the Medicare-approved amount for that service. Medicare pays the remaining 80%.

How Coinsurance Works

Applies After Deductible: Coinsurance payments begin only after the $257 annual Part B deductible for 2025 has been met.

Based on Medicare-Approved Amount: The 20% is calculated based on the fee schedule amount that Medicare determines is appropriate for the service. Providers who accept “assignment” agree to accept this amount as full payment and cannot bill beneficiaries for more than the deductible and the 20% coinsurance. If a provider does not accept assignment, they may charge more (up to a legal limit), potentially increasing the beneficiary’s out-of-pocket costs.

Applies to Most Services: The 20% coinsurance applies to a wide range of services, including doctor visits (even during a hospital inpatient stay), outpatient therapy, durable medical equipment (DME), outpatient mental health care (after the deductible), and covered Part B prescription drugs.

Exceptions: Some services have different cost-sharing. For example, many preventive services have $0 coinsurance. Clinical lab services also typically have $0 coinsurance. For services received in a hospital outpatient department, beneficiaries might pay a separate hospital copayment in addition to the 20% coinsurance for the doctor’s service; this copayment generally won’t exceed the Part A inpatient hospital deductible.

No Annual Limit: Under Original Medicare, there is no annual limit on the total amount a beneficiary might pay in coinsurance throughout the year, unless they have supplemental coverage like a Medigap policy. Medigap policies are specifically designed to help cover these out-of-pocket costs like deductibles and coinsurance.

How Part B Costs Work Together: An Example

Understanding how the monthly premium, annual deductible, and coinsurance interact throughout the year can clarify total out-of-pocket expenses under Original Medicare Part B. Consider this hypothetical scenario for a beneficiary, Ms. Lee, in 2025:

Ms. Lee’s Situation: She is enrolled in Original Medicare Part A and Part B, pays the standard Part B premium, and does not have supplemental insurance like Medigap or qualify for a Medicare Savings Program. Her income is below the threshold for IRMAA.

Monthly Premium: Every month throughout 2025, Ms. Lee pays the standard Part B premium of $185. This payment is required regardless of her healthcare usage. This premium is likely deducted from her Social Security benefits. Total annual premium cost: $185/month * 12 months = $2,220.

January – Annual Wellness Visit: Ms. Lee has her annual “Wellness” visit. This is a preventive service. Her doctor accepts Medicare assignment. She pays $0 for the visit itself, as the Part B deductible and coinsurance do not apply to this specific preventive service.

March – Doctor Visit for Illness: Ms. Lee gets sick and visits her primary care physician. The Medicare-approved amount for the visit is $150. Since she hasn’t paid anything towards her Part B deductible yet this year, she pays the full $150 out-of-pocket. This $150 now counts towards her $257 annual deductible. Remaining deductible: $257 – $150 = $107.

May – Specialist Visit & Lab Tests: Ms. Lee sees a specialist for a consultation. The Medicare-approved amount for the specialist visit is $200. She also has related lab tests done, with a Medicare-approved amount of $50.

• Specialist Visit Cost: She first pays the remaining $107 of her deductible. For the rest of the specialist visit cost ($200 – $107 = $93), Medicare pays 80% ($74.40), and Ms. Lee pays the 20% coinsurance ($18.60). Her total out-of-pocket for this visit is $107 (remaining deductible) + $18.60 (coinsurance) = $125.60. Her deductible is now met for the year.
• Lab Test Cost: Covered clinical laboratory services generally have $0 cost-sharing under Part B. Ms. Lee pays $0 for the lab tests.

July – Durable Medical Equipment (DME): Ms. Lee’s doctor prescribes a standard walker. The Medicare-approved amount for the walker is $100. Since her deductible is already met, Medicare pays 80% ($80), and Ms. Lee pays the 20% coinsurance ($20).

October – Flu Shot: Ms. Lee gets her annual flu shot. This is a preventive service with $0 cost-sharing. She pays $0.

Summary of Ms. Lee’s 2025 Part B Costs

• Premiums: $2,220 ($185 x 12)
• Deductible Paid: $257 (paid via March and May visits)
• Coinsurance Paid: $18.60 (May specialist visit) + $20 (July DME) = $38.60
• Total Annual Out-of-Pocket: $2,220 + $257 + $38.60 = $2,515.60

This example illustrates that costs are incurred throughout the year, starting with the consistent monthly premium, followed by out-of-pocket payments until the deductible is met, and then 20% coinsurance for most subsequent services. Without supplemental coverage, there is no cap on the total coinsurance Ms. Lee might pay if she requires extensive Part B services during the year.

Help with Part B Costs: Medicare Savings Programs (MSPs)

For beneficiaries with limited income and resources, paying Medicare Part B premiums, deductibles, and coinsurance can be challenging. Fortunately, state-administered programs called Medicare Savings Programs (MSPs) can provide significant financial assistance. These programs are jointly funded by federal and state governments but managed at the state level, often through the state Medicaid agency.

There are four main types of MSPs, each with different eligibility requirements and levels of assistance:

Qualified Medicare Beneficiary (QMB) Program

Offers the most comprehensive assistance.

Costs Covered: Pays the Part A premium (if applicable), the Part B premium ($185/month in 2025), and Part A and B deductibles, coinsurance, and copayments. Essentially, QMB eliminates most out-of-pocket costs for Medicare-covered services. Providers are not allowed to bill QMB recipients for Medicare cost-sharing.

2025 Limits: Monthly income below $1,325 (individual) or $1,783 (couple); Resources below $9,660 (individual) or $14,470 (couple).

Specified Low-Income Medicare Beneficiary (SLMB) Program

Costs Covered: Pays the Part B monthly premium ($185/month in 2025). This saves beneficiaries $2,220 annually in 2025. Beneficiaries are still responsible for deductibles and coinsurance.

2025 Limits: Monthly income below $1,585 (individual) or $2,135 (couple); Resources below $9,660 (individual) or $14,470 (couple).

Qualifying Individual (QI) Program

Costs Covered: Pays the Part B monthly premium ($185/month in 2025). Similar savings to SLMB ($2,220 annually in 2025). Enrollment is limited and granted on a first-come, first-served basis; beneficiaries must reapply each year.

2025 Limits: Monthly income below $1,781 (individual) or $2,400 (couple); Resources below $9,660 (individual) or $14,470 (couple).

Qualified Disabled and Working Individuals (QDWI) Program

Costs Covered: Pays the Part A premium only, for certain working individuals with disabilities who lost premium-free Part A due to returning to work.

2025 Limits: Monthly income below $5,302 (individual) or $7,135 (couple); Resources below $4,000 (individual) or $6,000 (couple).

Eligibility and Applying

Income/Resource Limits: The limits listed above are for 2025 and are based on federal guidelines. Income limits are slightly higher in Alaska and Hawaii. Importantly, some states may use higher limits or different rules for counting income and resources. Resources generally include things like bank accounts, stocks, and bonds, but typically do not include a primary home, one car, burial plots, furniture, or personal items.

Automatic Qualification for Extra Help: Qualifying for QMB, SLMB, or QI also automatically qualifies the beneficiary for Extra Help, a program that assists with Medicare Part D prescription drug costs.

How to Apply: Individuals should contact their State Medical Assistance (Medicaid) office to apply for MSPs. Even if income or resources seem slightly above the listed federal limits, applying is recommended as state-specific rules might allow qualification. State Medicaid office contact information can be found via the Medicaid Beneficiary Resources page.

More information on MSPs is available at Medicare.gov Medicare Savings Programs and in publications like “4 Programs That Can Help You Pay Your Medical Expenses” and “Need help paying your Medicare costs?”.

Staying Informed About Your Part B Costs

Managing Medicare Part B expenses requires staying aware of the key cost components and how they might change. Remember the three main costs associated with Part B under Original Medicare:

• Monthly Premium: The standard premium is $185 in 2025, but can be higher due to the Income-Related Monthly Adjustment Amount (IRMAA) based on income, or due to a late enrollment penalty.
• Annual Deductible: Beneficiaries must pay $257 out-of-pocket for covered services in 2025 before Medicare begins paying its share.
• Coinsurance: After the deductible is met, beneficiaries typically pay 20% of the Medicare-approved amount for most covered services, with Medicare paying the other 80%.

These amounts (standard premium, IRMAA thresholds, deductible) are subject to change each year. It is crucial to use official Medicare resources to get the most current figures.

Reviewing your Medicare Summary Notices (MSNs) is a good way to track your healthcare services, see how much Medicare paid, monitor your progress toward meeting the annual deductible, and verify the amounts you may owe. MSNs can be received electronically for faster access.

For the latest information and assistance:

• Medicare Costs Overview: Visit Medicare.gov Medicare Costs
• Medicare Savings Programs (Help with Costs): Visit Medicare.gov Medicare Savings Programs
• “Medicare & You” Handbook: Access the official guide electronically or download the PDF at Medicare.gov Medicare & You. Handbooks are mailed each fall but electronic access provides the most current information.
• Contact Medicare: Call 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048.
• Contact Social Security (for Premium/IRMAA questions): Call 1-800-772-1213. TTY users can call 1-800-325-0778.

Our articles make government information more accessible. Please consult a qualified professional for financial, legal, or health advice specific to your circumstances.