Reviewed by Joseph Sacco, MD, ABFM, ACQ-HPM.
Dr. Joseph Sacco is a board-certified hospice and palliative medicine physician with over 40 years of experience. Currently serving as Chief Medical Officer at The Connecticut Hospice and as an assistant professor at the Yale School of Medicine, he has published in Health Affairs, AJHPM, and The New York Times and authored three books.
If Medicare Part A (or Hospital Insurance) is Medicare’s inpatient foundation, Part B (Health Insurance) is the coverage most people use day to day. Medicare Part B benefits cover the services that keep you out of the hospital: doctor visits, outpatient care, preventive screenings, lab work, and more.
However, Part B comes with a cost structure that catches many people off guard. Once your annual deductible has been met, Medicare pays 80% of approved costs. You’re responsible for the remaining 20%, with no annual cap on how much it can add up to. For routine care, that’s usually manageable. But for serious illness requiring ongoing treatment, it can grow expensive fast.
This post covers what Medicare Part B benefits include, what they’ll cost you, and how Medigap supplemental insurance can help fill gaps in coverage.
Important Takeaways
- Medicare Part B covers outpatient and physician services, preventive care, lab work, clinician-administered drugs, and durable medical equipment (DME).
- After the annual Part B deductible is met, you owe 20% coinsurance on most covered services with no out-of-pocket maximum.
- Medigap is private supplemental insurance that covers most of what traditional Medicare doesn’t, including the uncapped 20% coinsurance.
A Note on Terms You’ll See Throughout This Guide
Assignment: A doctor “accepts assignment” when they agree to charge no more than the Medicare-approved amount for services (aside from any deductible or coinsurance you owe). |
Copay: A fixed fee for a service, regardless of the total cost. Example: paying $50 for a doctor’s visit. |
Coinsurance: A percentage-based cost-share. Example: paying 20% of the cost of all medical appointments after meeting your deductible. |
Deductible: The out-of-pocket amount you owe before Medicare starts paying for eligible services. Example: In 2026, you will need to pay for $283 of eligible services before Part B coverage kicks in. |
Part B uses all three, depending on the service and the stage of your benefit period.
What Does Medicare Part B Cover?
Unlike Part A, which is largely defined by where care is delivered, Part B is defined by the type of service administered.
Part B covers two broad categories of services:
- Medically necessary services: Services and supplies used to diagnose or treat a health condition, as long as they meet accepted medical standards.
- Preventive services: Services that help prevent illness or identify health concerns early, when treatment may be most effective.
Most preventive services are available at no cost when provided by a healthcare provider who accepts Medicare assignment.
Inpatient and Outpatient Physician Services
Part B covers visits with your primary doctor in any setting: an office, clinic, or hospital. Even when you’re admitted as an inpatient, your physician’s professional fees are billed under Part B. The facility’s charges will fall under Part A. This means that a single hospitalization can generate cost-sharing under both parts at the same time.
Outpatient Hospital Services and Ambulatory Care
Part B covers care provided in hospital outpatient departments, including same-day and outpatient surgery. These services use hospital staff and facilities, but don’t require an overnight stay. If you have had a procedure at a hospital and gone home the same day, it was almost certainly billed as outpatient care under Part B.
Preventive Services
Part B covers a broad range of preventive screenings, including: mammograms, Pap tests, colorectal cancer screening (such as colonoscopy), and more. Most of these services are covered at no cost when administered by a healthcare provider who accepts Medicare assignment.
The Welcome to Medicare Visit
New Part B enrollees get a one-time “Welcome to Medicare” preventive visit. It includes:
- A health risk assessment
- Reading of your vital signs
- Review of your medical and family history
- Referrals for appropriate screenings
- Patient education and counseling
This visit must be scheduled within the first 12 months of enrollment. No cost-sharing applies, so if you’re newly enrolled, it’s best to take advantage of the visit.
Diagnostic Tests and Laboratory Services
Lab work, imaging, and other diagnostic testing ordered by your physician are covered under Part B. They are subject to the annual deductible and 20% coinsurance once that deductible is met.
Professionally Administered Drugs
Medications you can’t take at home (those given by infusion or injection in a doctor’s office, clinic, or hospital outpatient department) are covered under Part B, not Part D. This includes chemotherapy, certain biologic drugs, and other clinician-administered treatments.
The catch: These drugs are subject to the uncapped 20% Part B coinsurance. For expensive infusion therapies (thousands of dollars per infusion), that 20% can add up quickly. That’s the kind of cost Medigap is designed to cover.
Durable Medical Equipment (DME)
Part B covers medically necessary equipment for use at home, including:
- Oxygen equipment
- Hospital beds
- Walkers and canes
- Wheelchairs
- Diabetes testing supplies
A physician’s prescription is required for all covered DME.
Home Health Services
Part B covers many of the same home health services as Part A (skilled nursing, physical therapy, occupational therapy, and speech-language pathology), but under different qualifying conditions.
Part A home health typically follows a hospital or skilled nursing facility (SNF) stay. Part B covers these services for homebound patients who haven’t been recently hospitalized, when a physician orders and certifies the need.
If you’re homebound and need skilled care at home, Medicare likely covers it. Whether it’s through Part A or Part B depends on your recent care history.
However, it’s worth repeating that neither Part A nor Part B covers custodial care (routine, non-skilled help with daily activities), whether at home or in a nursing facility. If care isn’t skilled and medically necessary, Medicare doesn’t cover it.
What Does Medicare Part B Cost?
While Part A front-loads most of its costs in per-stay deductibles, Part B cost-sharing comes in three forms: a monthly premium, an annual deductible, and coinsurance on most covered services.
Part B Monthly Premium
The majority of Part B enrollees (roughly 92%) pay the standard monthly premium of $202.90 in 2026. This rate applies to single filers with a Modified Adjusted Gross Income (MAGI) of $109,000 or less and married couples filing jointly with a MAGI of $218,000 or less.
The IRS determines your MAGI based on the federal tax return you filed two years earlier. Enrollees with incomes above the base limits pay an additional Income-Related Monthly Adjustment Amount (IRMAA). The adjustment increases by income tier. In 2026, the maximum total Part B premium is $689.90 per month for single filers with a MAGI of $500,000+ and joint filers with a MAGI of $750,000+.
As with Part A, beneficiaries with limited income may receive Part B premium-payment assistance from a Medicare Savings Program (MSP).
Part B Annual Deductible
The Part B deductible for 2026 is $283. Once this deductible has been met, Medicare pays its 80% share for the rest of the year’s Part B-covered services.
Services that count toward meeting this deductible include:
- Physician visits (in any setting)
- Outpatient hospital services
- Diagnostic tests and imaging
- Durable medical equipment
- Clinician-administered drugs
- Outpatient surgical procedures
Part B 20% Coinsurance
Once the $283 annual deductible has been met, Part B covers 80% of Medicare-approved costs for most services. You are responsible for the remaining 20%.
While that might be manageable for routine preventive care, remember that there’s no annual out-of-pocket cap. Unlike most commercial insurance, traditional Medicare doesn’t limit what you can owe in a given year. A course of chemotherapy or ongoing infusion therapy could mean owing thousands—or tens of thousands—of dollars in coinsurance. Skilled home health services are the one exception; no copay or coinsurance applies there.
The Blood Deductible
The “blood deductible” applies under both Part A and Part B. In an outpatient setting, the first three pints of blood you receive are your financial responsibility. This is on top of the Part B deductible and 20% coinsurance. (You can arrange for replacement blood to be donated on your behalf, though handling and delivery charges may still apply.)
After the first three pints, Medicare covers any additional blood needed that year. As noted in our post on Part A, hospitals measure blood in units rather than pints, but Medicare treats them as equivalent for billing purposes.
What Is Medigap?
Medigap, also called Medicare Supplement Insurance, is insurance designed to cover the cost-sharing gaps that traditional Medicare leaves you responsible for: deductibles, copays, and coinsurance under Parts A and B.
Medigap is private insurance, not a government program. While Medigap policies are subject to federal and state regulation, and participating insurance companies work directly with Medicare to process cost-sharing, they are sold and funded entirely by private companies.
To purchase a Medigap policy, you need to have original Medicare (also called traditional Medicare; both Parts A and B). Medigap’s role is specific: it reimburses your cost-sharing after Medicare pays its share. It doesn’t replace Medicare or expand what it covers; it simply covers your portion of the costs Medicare leaves behind.
What Does Medigap Cover?
All Medigap plans include a core set of benefits:
- Part A hospital coinsurance: Medigap covers the $1,736 deductible for hospitalization days 1–60, the $434 daily copay for days 61–90, and the $868 daily copay for days 91–150 (using “Lifetime Reserve Days,” discussed in our blog on Medicare Part A).
- 365 additional hospital days: Medigap plans cover 365 additional days of hospitalization beyond Medicare’s 150-day limit, paid in full.
- Part B coinsurance: Medigap covers the uncapped 20% copay for all Part B services (except skilled home care services, which don’t incur a copay).
Medigap plans help protect against the unlimited financial liability that traditional Medicare creates. Without Medigap, repeat hospital stays, a prolonged hospitalization, or an extended course of Part B-billed treatment can create a substantial financial burden, since traditional Medicare has no out-of-pocket maximum.
What Does Medigap NOT Cover?
Medigap only supplements what traditional Medicare covers. It doesn’t extend to long-term care, custodial care, dental or vision care, hearing aids, or prescription drugs. (For prescriptions, you’ll need a separate Part D plan.)
What Does Medigap Cost?
In 2023, the average Medigap monthly premium was $217. However, what you’ll pay depends on your plan, your insurer, and where you live. You can compare the costs of Medigap plans on Medicare’s website.
Every Medigap plan letter is federally standardized, meaning the benefits within each letter are identical regardless of which insurer sells it. Medigap Plan A from one company covers exactly the same things as Medigap Plan A from another. The only difference is price.
Premiums for the same plan letter can vary significantly between insurers, so when comparing policies, make sure you’re looking at the same letter across companies, not different letters at different price points.
A Note for Connecticut Residents
Connecticut requires community-rated premiums (also called “no-age-rated premiums”). This means that all policyholders pay the same rate, regardless of age or health status. Community-rated states help keep Medigap accessible and comparably priced even outside of the initial Open Enrollment window.
Non-Participating and Opt-Out Providers
Most healthcare providers accept Medicare’s approved amounts for services (“assignment”), but not all. Here’s what to know.
Non-participating providers don’t accept Medicare assignment on all claims. Their Medicare-approved amount is set at 95% of the standard fee schedule, and they can charge up to 115% of that reduced figure. Medicare pays its 80% share based on the lower rate, leaving the patient responsible for the remaining 20% coinsurance and any excess charges* up to that limit.
*Excess charges: The fees a doctor who treats Medicare patients but doesn’t accept assignment can bill above Medicare’s approved rates. Federal law caps these charges at 15% above the Medicare-approved amount. Whether your Medigap plan covers excess charges depends on your plan letter. Be sure to confirm this if you have or expect to have a relationship with a non-participating healthcare provider.
Opt-out providers have removed themselves from participation in Medicare entirely. They set their own fees, and neither Medicare nor Medigap pays anything toward those services.
Medigap Plan Options
Medigap plans are federally standardized and sold by private insurers. There are eight plan letters: A, B, D, G, K, L, M, and N. Most of these policies allow you to visit any provider that accepts Medicare.
- Plan A is the most basic. It covers Part A hospital coinsurance, 365 additional hospital days, Part B coinsurance, and the first three pints of blood. It does not cover the Part A hospital deductible, the Part B deductible, skilled nursing facility coinsurance for days 21–100, or foreign-travel emergencies.
- Plan G is the most popular and comprehensive plan available to new enrollees. In addition to everything Plan A covers, it adds the Part A hospital deductible, skilled nursing facility coinsurance for days 21–100, and foreign-travel emergency care (80% after a $250 deductible, up to a $50,000 maximum). The only remaining cost for Plan G enrollees, beyond the monthly premium, is the annual Part B deductible. After that’s met, Plan G covers virtually everything else.
- Plan F covers everything Plan G does, plus the Part B deductible. However, Plan F premiums run about $632 per year higher than Plan G. For most people, paying the $283 deductible out of pocket is the better deal.
Other plan letters vary in how they handle deductibles, copays, and coinsurance. To compare plans and premiums in your area, you can use Medicare’s Medigap comparison tool here. The official Centers for Medicare & Medicaid Services (CMS) booklet, “Choosing a Medigap Policy,” includes a full benefit comparison chart and is available as a free download.
Medigap Enrollment
Unlike Medicare enrollment, which happens annually, Medigap’s Open Enrollment Period generally occurs only once. Your six-month window starts the first month you’re 65 or older and your Part B coverage is active.
It’s often in your best interest to treat the Open Enrollment Period like a deadline. During this period, insurers cannot reject your application or charge you more because of your health history. They also cannot use medical underwriting (evaluating your medical history to determine your eligibility or premium).
Once those six months pass, those protections largely disappear. Outside the window, a policy may cost more or may not be available to you at all, unless you qualify for specific exceptions. (As mentioned above, Connecticut residents pay community-rated premiums, so health history doesn’t affect what you pay, regardless of when you enroll).
To purchase a Medigap policy, you must have original Medicare (Parts A and B). For more details on timing, Medicare’s website outlines when you can buy a Medigap policy.
What Comes Next
With Parts A and B in place, you have the foundation of traditional Medicare. The remaining decisions, Medicare Advantage (Part C) and prescription drug coverage (Part D), are the subject of the next posts in this series.
The short preview: Medicare Advantage is an alternative way to receive all your Medicare benefits through a single private plan, often with lower premiums but with trade-offs in provider flexibility and cost predictability. Whether it’s the right fit depends on your health, your finances, and how much you value being able to see any Medicare-accepting provider, anywhere in the country.
More on that shortly—no complimentary dinner required.
The Connecticut Hospice is a Medicare-certified, nonprofit hospice, acute care, and palliative care provider serving patients and families across Connecticut. For questions about Medicare and hospice coverage, read more about how Medicare covers hospice care here.
Read the Rest of the Series
Learn about the different parts of Medicare: what types of care they cover, what they cost, how to enroll, and more.
Medicare Basics: Medicare Eligibility Requirements, Costs, and What to Expect
Understanding eligibility, premiums, and what each part covers is the foundation for making smart Medicare decisions.
Medicare Part A Explained: Coverage, Costs, and the Catches
Medicare Part A coverage includes hospitals, skilled nursing, rehab, and home health. Here’s what to know.
