Medicare Part B Coverage Explained: What's Covered, What's Not, and the 20% Problem

What Is Medicare Part B?

Medicare Part B is the outpatient component of Original Medicare. While Part A covers hospital stays and inpatient services, Part B covers the medical side: physician services, outpatient procedures, diagnostic tests, preventive care, mental health services, and durable medical equipment (DME).

Unlike Part A, Part B is not free. You pay a monthly premium that is deducted automatically from your Social Security benefit. Enrollment in Part B is optional, but most beneficiaries who skip it and enroll later pay a permanent late enrollment penalty of 10% per year they went without coverage.

What Part B Covers

Part B is broader than most beneficiaries realize. It covers:

• Physician services: Office visits, specialist consultations, and services from any Medicare-participating doctor regardless of specialty
• Outpatient hospital services: Outpatient surgery, emergency department visits (when not admitted), observation services
• Preventive services: Annual Wellness Visit, cancer screenings, cardiovascular screenings, diabetes screening, flu shots, and other preventive services at no cost to you
• Mental health care: Outpatient therapy, psychiatric evaluation, and partial hospitalization programs
• Ambulance services: When medically necessary transportation to a hospital
• Durable medical equipment (DME): Wheelchairs, walkers, CPAP machines, home oxygen, blood glucose monitors when prescribed by a doctor
• Diagnostic tests: Lab work ordered by your doctor, X-rays, MRIs, CT scans, PET scans
• Physical, occupational, and speech therapy: When medically necessary and prescribed by a physician
• Second surgical opinions
• Diabetes supplies (when prescribed) and diabetes self-management training
• Telehealth services (expanded permanently post-pandemic)

What Part B Does Not Cover

The exclusions in Part B represent major financial exposures for beneficiaries. Part B does not cover:

• Routine dental care: Cleanings, fillings, extractions, dentures, or dental X-rays. Medicare only covers dental services that are medically necessary as part of a covered procedure (e.g., jaw reconstruction after cancer surgery).
• Routine vision care: Eye exams for glasses or contacts, eyeglasses, or contact lenses (except after cataract surgery)
• Hearing aids and routine hearing exams
• Long-term custodial care: Help with bathing, dressing, and daily activities in a nursing home or at home. This is a critical gap—the average nursing home costs over $90,000/year and Medicare covers none of it once skilled care is no longer needed.
• Most prescription drugs: Outpatient medications are covered by Part D, not Part B. Part B only covers drugs administered in a clinical setting (e.g., chemotherapy infusions, injections in the doctor's office).
• Care outside the United States (with limited exceptions)
• Cosmetic surgery
• Acupuncture (except for chronic low back pain, which Part B does cover)
• Most foot care (routine nail trimming, callus removal)

2026 Costs: Premium, Deductible, and Coinsurance

The 20% Coinsurance Problem

The most consequential feature of Medicare Part B is this: the 20% coinsurance never goes away. There is no out-of-pocket maximum under Original Medicare Part B. Every dollar Medicare approves generates a 20-cent obligation for you, indefinitely.

For most routine care, this is manageable. A $150 office visit leaves you owing $30. But for serious illness, the math gets frightening fast:

• A $50,000 outpatient chemotherapy regimen: you owe $10,000
• A $30,000 outpatient surgery: you owe $6,000
• A $100,000 course of outpatient dialysis: you owe $20,000

This is not a hypothetical. Beneficiaries facing cancer, kidney disease, or other serious conditions frequently accumulate five-figure Part B obligations in a single year with no ceiling.

Durable Medical Equipment

Part B covers DME when your doctor prescribes it as medically necessary and you use a Medicare-enrolled DME supplier. The 20% coinsurance applies after the deductible. Important rules:

• The supplier must be enrolled in Medicare and accept assignment, or you pay more than 20%
• Some DME is rented (e.g., oxygen equipment, CPAP machines for the first 13 months); others are purchased
• Prior authorization is required for certain high-cost DME items
• If your supplier is not Medicare-enrolled, Medicare pays nothing

Always verify that your DME supplier participates in Medicare before accepting equipment. Non-participating suppliers commonly result in surprise bills.

How to Avoid IRMAA Premium Surcharges

The Income-Related Monthly Adjustment Amount (IRMAA) increases your Part B premium if your income exceeds certain thresholds. Medicare uses your tax return from two years prior to set the premium.

If your income has dropped significantly—due to retirement, loss of a spouse, or other life event—you can appeal IRMAA using Form SSA-44. File it with your local Social Security office as soon as your income situation changes. The appeal can reduce your premium retroactively.

Closing the Gap with Medigap

The best time to enroll in a Medigap (Medicare Supplement) plan is during your six-month open enrollment window that starts the month you turn 65 and enroll in Part B. During this window, insurers cannot deny you coverage or charge you more due to pre-existing conditions.

Outside this window, you may face medical underwriting—meaning you can be denied or charged more based on your health history. The most popular Medigap plan is Plan G, which covers the Part B coinsurance, the Part A deductible, and skilled nursing coinsurance, leaving you responsible only for the $257 annual deductible.

• Medicare.gov — Part B Costs
• CMS — Medicare Part B Enrollment
• SSA Form SSA-44 — IRMAA Life-Changing Event Request
• KFF — Overview of Medicare Coverage