Medicare Part B: The 20% Coinsurance Rule and What It Costs You

Medicare Part B coinsurance is 20% of the Medicare-approved amount for most covered services after you meet the annual deductible. In 2025, the Part B deductible is $257, and the standard monthly premium is $185.00. So if a doctor’s visit has an approved amount of $150, you pay $30 coinsurance (plus the deductible if you haven’t yet met it). The real threat: that 20% can pile up fast on big-ticket services like outpatient surgery, chemotherapy, or advanced imaging—potentially costing thousands of dollars with no annual cap in Original Medicare.

This 20% coinsurance rule applies only to Original Medicare. Medicare Advantage plans (Part C) set their own copays and out-of-pocket maximums. If you’re in a Medicare Advantage plan, your cost for a doctor visit might be a flat $10 copay rather than 20% coinsurance—but you are limited to the plan’s network and prior authorization rules. Always check your specific plan document.

How the 20% Coinsurance Works (With Examples)

After you’ve paid the Part B deductible, the 20% coinsurance applies to nearly all Part B services, including:

• Doctor visits (including specialists)
• Outpatient hospital services (emergency room, observation stays, same-day surgery)
• Durable medical equipment (wheelchairs, walkers, oxygen equipment)
• Physical, occupational, and speech therapy
• Clinical lab tests (most diagnostic lab services are covered at $0, but some still carry the 20%)
• Preventive services (most are covered at $0, but diagnostic versions of those same services are not)

Example costs in 2025 (Medicare-approved amounts are estimates; actual amounts vary by region and provider):

Service	Medicare-Approved Amount	Your 20% Coinsurance
Routine office visit	$150	$30
Outpatient knee replacement surgery	$5,000	$1,000
Annual chemotherapy infusion (one year)	$30,000	$6,000
MRI of the knee	$800	$160
Walker (purchase)	$250	$50

Key point: There is no out-of-pocket maximum in Original Medicare. If you have a year of frequent or expensive Part B services, your 20% share can easily exceed a few thousand dollars. That’s why many beneficiaries add a Medigap policy (covers the 20%) or enroll in Medicare Advantage (in-network out-of-pocket limits apply, typically $6,000–$9,000 in 2025).

The One Failure Mode Most People Miss (and How to Detect It Early)

The common failure: assuming 20% is a small copay, like the low copays you may have had through employer insurance. In reality, the approved amount for complex services can be huge, and you won’t know the exact figure until the claim is processed. Even worse, if you choose a provider who does not accept Medicare assignment, you can be billed up to an additional 15% above the approved amount (the limiting charge), and your 20% coinsurance is then based on that higher charge. That can turn a $1,000 procedure into a $1,150 approved amount, and you pay 20% of $1,150 = $230 instead of $200.

How to detect this early:

1. Review your Medicare Summary Notice (MSN) every quarter. The MSN shows every service billed, the approved amount, what Medicare paid, and what you owe. Look for “You may be billed” amounts that seem high.

2. Use the Medicare Procedure Price Lookup tool at Medicare.gov before any planned service. Enter the procedure code (ask your doctor for the CPT code) to see the national average approved amount and your estimated coinsurance.

3. Ask every provider: “Do you accept Medicare assignment?” If the answer is no, get a signed Advance Beneficiary Notice (ABN) before the service so you’re not blindsided.

4. Beware of hospital outpatient departments (HOPDs). Even a routine visit can carry a facility fee that inflates the approved amount. Asking to be seen at an independent clinic instead can sometimes lower your coinsurance.

Concrete verification step: Before scheduling any elective service, call the provider’s billing office and ask directly: “Are you a participating Medicare provider who accepts Medicare assignment?” Then confirm online at Medicare.gov/physiciancompare by searching the provider’s name and zip code. If the listing says “Accepts Medicare assignment: Yes,” you’re safe. If not, get the ABN in writing.

Do You Need Extra Coverage for the 20%?

Use this 5-item checklist to decide whether you should buy a Medigap plan or switch to Medicare Advantage to cap your Part B coinsurance exposure.

Check	Action
☐	Do you expect to have any year with more than $2,000 in Part B coinsurance? (Based on your health history.)
☐	Do you need to see specialists frequently or receive chemotherapy, dialysis, or infusion therapy?
☐	Do you travel often and want coverage nationwide without network restrictions?
☐	Can you afford a monthly Medigap premium (typically $100–$200 for Plan G in 2025) plus the Part B premium?
☐	Are you willing to accept a narrow provider network if you choose Medicare Advantage?

If you check 3 or more boxes, a Medigap plan (especially Plan G, which covers Part B coinsurance) is a strong fit. If you check fewer, Original Medicare alone may be manageable—but you still have no cap, so monitor your MSNs yearly.

Practical implication: If you are healthy and rarely see a doctor, sticking with Original Medicare alone might cost you less in total premiums than a Medigap plan. However, a single unexpected hospitalization or cancer diagnosis can flip that math overnight. The decision comes down to your risk tolerance and whether you can absorb a $5,000–$10,000 coinsurance bill in a bad year.

Realistic trade-off: Medigap Plan G gives you unlimited provider choice and predictable costs (flat monthly premium, no surprise copays), but you pay a monthly premium regardless of whether you use care. Medicare Advantage plans have lower or $0 monthly premiums and an out-of-pocket cap, but you must stay in-network and get prior approvals. Miss a network specialist referral, and you could end up paying the full cost—not just 20%—for an out-of-network service. There is no single right answer; your travel habits, health conditions, and budget determine the best fit.

3 Practical Tips to Reduce Your 20% Coinsurance Burden

Tip 1: Always Use Providers Who Accept Assignment

Action step: Before scheduling any service, confirm the provider is enrolled in Medicare and accepts assignment. Check online at Medicare.gov/physiciancompare or call 1-800-MEDICARE.

Common mistake: Assuming that “Medicare provider” means they accept assignment. Many providers are non-participating and can charge up to the limiting charge, increasing your coinsurance.

Tip 2: Buy a Medigap Plan G (or Plan N) the First Time You’re Eligible

Action step: During your Medigap Open Enrollment Period (the 6 months starting when you’re 65+ and enrolled in Part B), you can buy any Medigap plan without medical underwriting. Compare premiums for Plan G in your area using Medicare.gov/plan-compare.

Common mistake: Waiting until you have a health event to buy Medigap. After the open enrollment window, insurers can deny coverage or charge higher rates based on your health.

Tip 3: Check If You Qualify for a Medicare Savings Program (MSP)

Action step: Visit Medicare.gov or your state Medicaid office to see if your income and resources fall below the MSP limits. In 2025, the QMB program (covers Part B premiums and coinsurance) has income limits of roughly $1,275/month for individuals and $1,724/month for couples, with resource limits of $9,920 (single) and $13,740 (couple).

Common mistake: Assuming you make too much. Some states have higher income thresholds, and a slight excess may still qualify via spend-down. Don’t skip applying.

When IRMAA Makes the 20% Even More Expensive

If your modified adjusted gross income (MAGI) in 2023 is above certain thresholds, you’ll pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of the standard Part B premium. In 2025, the standard Part B premium is $185.00 per month. IRMAA surcharges range from $70.40 to $419.30 per month for Part B. This doesn’t change the 20% coinsurance, but your total cost (premium plus coinsurance) shoots up.

2025 Part B IRMAA Brackets (based on 2023 MAGI)	Monthly Premium
Single filer $106,000 or less / Married joint $212,000 or less	$185.00
Single $106,001–$167,000 / Married joint $212,001–$334,000	$255.40
Single $167,001–$200,000 / Married joint $334,001–$400,000	$325.90
Single $200,001–$500,000 / Married joint $400,001–$750,000	$396.40
Single $500,001+ / Married joint $750,001+	$604.30

For example, a single filer with MAGI over $106,000 and less than or equal to $167,000 pays a total Part B premium of $255.40 each month. Over a year, that’s an extra $844.80 in premiums alone—plus you still owe the 20% coinsurance on services.

What you can do: If you’ve had a life-changing event (retirement, divorce, loss of income, death of a spouse), you can file form SSA-44 to request a reconsideration of IRMAA. Otherwise, factor the surcharge into your budget when deciding whether a Medigap plan is worth it.

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Next steps:

1. Compare Medigap plans (especially Plan G) and Medicare Advantage plans at Medicare.gov/plan-compare by entering your zip code.

2. Use the Medicare Procedure Price Lookup tool to estimate coinsurance for specific services you expect to use.

3. Call 1-800-MEDICARE or your State Health Insurance Assistance Program (SHIP) for free, personalized help.

Disclaimer: Medicare rules, premiums, deductibles, and IRMAA brackets change each year. The examples above are based on 2025 figures. Always verify current amounts with Medicare.gov or your plan documents. This information is for educational purposes and is not a substitute for professional insurance, legal, or financial advice.