When you think of Medicare Part B, it’s easy to focus on the basics: coverage for doctor visits, outpatient care, and preventive services. However, what often goes unnoticed are the hidden costs that can surprise you. Understanding these can help you plan your healthcare budget better and avoid unexpected expenses down the road.
Premiums: More Than Just One Payment
Medicare Part B requires a monthly premium. In 2024, the standard premium is about $174.70 per month. While many assume this is a fixed cost, it’s important to note that higher-income individuals may have to pay more. If your income is above a certain threshold—$103,000 for individuals or $206,000 for couples—you’ll pay what's called an Income-Related Monthly Adjustment Amount (IRMAA). This adjustment can significantly increase your monthly payment, depending on your income bracket. Learn more about IRMAA and Medicare premiums.
To avoid surprises, you should review your yearly income and how it affects your Medicare Part B premiums. Many retirees who sold property or drew from retirement accounts have been caught off guard by higher premiums.
Deductibles: The Annual Start-Up Cost
Like most insurance plans, Medicare Part B comes with an annual deductible. For 2024, this deductible is $240. This means that before Medicare starts paying for your doctor visits or outpatient services, you will need to cover the first $240 yourself. After that, Medicare usually covers 80% of the costs, but the deductible is a cost that resets every year.
This deductible might not seem like much, but if you have frequent healthcare needs early in the year, the expenses can pile up quickly. Find out more about your Medicare deductible and cost sharing.
Coinsurance and Copayments: Ongoing Costs
Medicare Part B generally covers 80% of your medical services, leaving you responsible for the remaining 20%. This is known as coinsurance. While 20% might not sound significant, it can quickly add up if you require frequent or expensive care, like specialist visits or outpatient surgeries.
For example, if you need a medical procedure that costs $1,000, you’ll be responsible for $200. Over time, these coinsurance payments can put a strain on your budget, especially if you need ongoing care for chronic conditions.
Additionally, some services may require a copayment, a flat fee you pay at the time of service. These small amounts, like $10 or $20 for a visit, can accumulate and become a significant out-of-pocket cost over time. Understand how coinsurance and copayments work with Medicare.
Coverage Gaps: What Medicare Part B Doesn’t Cover
While Medicare Part B covers a wide range of services, there are significant gaps in coverage. For example, it does not cover dental care, vision exams, or hearing aids—expenses that become more important as we age. These gaps mean you might need to pay for these services out of pocket or consider additional insurance plans like Medicare Advantage or Medigap to help fill in the holes.
For instance, a simple dental cleaning can cost upwards of $100 without insurance, and the cost of a new pair of prescription glasses can easily exceed $200. Hearing aids, which are often needed by older adults, can run into thousands of dollars. If you need regular dental, vision, or hearing care, these hidden costs can become a burden. Learn more about Medigap policies and how they can help cover additional costs.
Late Enrollment Penalties: A Lifetime Fee
Many people don’t realize that delaying Medicare Part B enrollment can lead to lifelong penalties. If you don’t sign up for Medicare Part B when you’re first eligible and don’t have other credible insurance, you may face a penalty. This penalty is an additional 10% added to your premium for every year you were eligible but didn’t enroll.
For example, if you delay enrolling for two years, you’ll pay 20% more on your monthly premium for as long as you have Medicare Part B. This is not a one-time fee but a lifetime surcharge, making it crucial to enroll on time unless you have a valid reason for delaying, such as employer-provided health insurance.
Protect Yourself from Unexpected Costs
Given the various hidden costs of Medicare Part B, it’s wise to explore supplemental insurance options. Medigap policies or Medicare Advantage plans can help cover the out-of-pocket expenses that Part B doesn’t. Medigap plans, for instance, can cover deductibles, copayments, and coinsurance, while Medicare Advantage plans often bundle dental, vision, and hearing care with traditional Medicare coverage.
Taking a proactive approach to your Medicare planning will help you avoid the financial strain of unexpected medical expenses.
Explore your supplemental insurance options and manage your healthcare budget effectively.
To better navigate the complexities of Medicare and avoid unexpected costs, take a Medicare class with GetSetUp!
Reviewed By: Keith Gilbert