2.3 Medicare Part B — Medical Insurance

Why This Section Matters

While Part A cost-sharing revolves around hospital stays that most beneficiaries only experience occasionally, Part B touches nearly every beneficiary every month — the premium is typically deducted directly from Social Security checks. Agents are expected to know the current premium, the deductible, what counts as a covered preventive service, and — critically — how the late enrollment penalty works, since this is a frequent source of client complaints and complaint tracking module (CTM) escalations.

What Part B Covers

Medicare Part B (Medical Insurance) covers medically necessary services and supplies needed to diagnose or treat a condition, plus many preventive services. Covered categories include:

• Physician services — office visits, specialist visits, surgeon fees.
• Outpatient hospital care — emergency room visits, outpatient surgery, observation status.
• Durable medical equipment (DME) — wheelchairs, walkers, oxygen equipment, hospital beds for home use.
• Clinical laboratory services — blood tests, urinalysis, some screenings.
• Ambulance transportation, when medically necessary.
• Outpatient mental health services.
• Preventive and screening services — annual wellness visits, many cancer screenings, cardiovascular screenings, diabetes screenings, and vaccines.

What Part B Does Not Cover

This gap list is heavily tested because Medicare Advantage plans often advertise these as "extra benefits," and agents must be able to explain accurately why a client needs a supplemental product or an MA plan to get them:

• Routine dental care (cleanings, dentures, extractions)
• Routine vision care (eye exams for glasses, most eyewear)
• Hearing aids and routine hearing exams
• Long-term custodial care (help with bathing, dressing, eating when that is the only care needed)

2026 Part B Costs at a Glance

Once a beneficiary meets the $283 annual deductible, Original Medicare pays 80% of the Medicare-approved amount for most Part B services, and the beneficiary is responsible for the remaining 20% coinsurance — with no annual out-of-pocket cap, unless the beneficiary has a Medigap policy or is enrolled in an MA plan (which is required to include a MOOP).

Preventive Services: the "$0 Cost-Sharing" Rule

Congress designated a specific list of preventive services that Medicare covers with no deductible and no coinsurance, as long as the provider accepts Medicare assignment. The best-known example is the Annual Wellness Visit: a beneficiary who has had Part B for more than 12 months can get one Wellness Visit every 12 months at no cost. This visit is a prevention-planning conversation, not a full physical exam — if the provider performs additional diagnostic tests or treats a new problem during the same visit, that additional care can trigger the normal deductible and coinsurance. This nuance is a classic exam trap: "free preventive visit" does not mean "every service performed that day is free."

The Part B Late Enrollment Penalty (LEP)

A beneficiary who delays Part B enrollment past their Initial Enrollment Period (IEP) without qualifying for a Special Enrollment Period (typically because they had creditable employer group health coverage) faces a permanent premium penalty:

• 10% increase in the Part B premium for each full 12-month period the beneficiary was eligible but did not enroll.
• This penalty is added to the premium for as long as the beneficiary has Part B — it never expires, unlike Part D's penalty, which is also permanent but calculated differently (percentage of the national base beneficiary premium, covered in Chapter 8).
• The penalty does not apply to someone who delayed enrollment because they had creditable coverage through a current employer (their own or a spouse's), as long as they enroll within 8 months of that employment or coverage ending, using a Part B Special Enrollment Period.

IRMAA — Income-Related Premiums

Higher-income beneficiaries pay more than the standard $202.90 premium through the Income-Related Monthly Adjustment Amount (IRMAA), an income-based surcharge added on top of the standard premium in graduated tiers. IRMAA is based on modified adjusted gross income (MAGI) from the tax return filed two years prior (2026 premiums use 2024 MAGI), and it applies separately to Part B and Part D. Agents should know that IRMAA exists and is income-graduated — exact dollar brackets shift annually and are a lower testing priority than the structural fact that it is a surcharge based on a two-year-old tax return, not current income.

Worked Scenario

Mr. Diaz turned 65 in March 2024 but kept working with employer coverage through his company, delaying Part B enrollment. He retired and lost that coverage in September 2025, and used his 8-month Part B Special Enrollment Period to enroll without any late enrollment penalty. Contrast this with Mr. Kim, who had no employer coverage, was eligible for Part B in 2022, and did not enroll until 2026 — having gone three full 12-month periods without qualifying coverage, Mr. Kim now pays a permanent 30% penalty on top of his standard 2026 premium.

Common Traps to Avoid

• Assuming the Annual Wellness Visit is a full physical exam — it is a prevention-planning visit, and additional services performed the same day may not be free.
• Confusing the Part B penalty (10% per 12-month period, tied to the standard premium) with the differently-calculated Part D penalty.
• Forgetting that employer group coverage (not COBRA, not retiree coverage) is what protects someone from the Part B penalty during a delay.
• Assuming Part B fills the dental/vision/hearing gap — it does not; this gap is precisely why MA "extra benefits" and stand-alone dental/vision products exist.