What a Medicare deduction is and why it matters

A Medicare deduction is the amount of money you pay out of your own pocket before Medicare starts to pay for your care. It is not a monthly fee — it is a yearly threshold. Once you reach that amount in a calendar year, Medicare covers a larger share of your costs, though you may still pay copayments or coinsurance on individual services.

Medicare has different deductibles depending on which part of coverage you use. Original Medicare (Part A and Part B) has separate deductibles for hospital stays and doctor visits. Medicare Advantage and Medigap plans set their own deductibles, which may be lower or higher than Original Medicare. Understanding which deductible applies to you matters because it affects how much you will spend before your coverage kicks in.

Key Takeaways

  • Medicare Part A (hospital insurance) has a deductible that applies to each benefit period, which is usually 60 days starting when you enter the hospital.
  • Medicare Part B (doctor and outpatient care) has an annual deductible that resets on January 1 each year.
  • Once you meet your deductible, you still pay coinsurance (a percentage of the cost) or copayments (a fixed dollar amount) for most services.
  • Medicare Advantage and Medigap plans have their own deductibles that may differ from Original Medicare amounts.
  • Deductible amounts change each year, so you should check your plan documents or call Medicare in December to learn the new amounts for January.

How Medicare Part A deductibles work

Medicare Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services. The Part A deductible applies per benefit period, not per year. A benefit period begins the day you enter the hospital and ends 60 days after you leave without receiving any inpatient hospital or skilled nursing care.

If you are hospitalized again after that 60-day gap, a new benefit period starts and you owe a new deductible. If you are hospitalized, discharged, and readmitted within 60 days, you are still in the same benefit period and do not owe another deductible — but you do owe a copayment for each additional day in the hospital after day 60.

The Part A deductible covers your first day in the hospital. After you meet it, Medicare pays the full cost of hospital care for days 1 through 60 of each benefit period. From day 61 to day 90, you pay a daily copayment. Beyond day 90, you enter "lifetime reserve days" and pay a higher daily copayment, though you have a limited number of these days available in your lifetime.

How Medicare Part B deductibles work

Medicare Part B covers doctor visits, outpatient care, medical equipment, and preventive services. The Part B deductible is an annual amount that resets on January 1 each year. You must pay this deductible before Medicare begins to pay its share of Part B services.

Once you meet the Part B deductible, Medicare typically pays 80 percent of the approved cost for most services, and you pay 20 percent as coinsurance. Some preventive services, such as annual wellness visits and cancer screenings, have no deductible and no coinsurance — Medicare covers them at 100 percent.

The Part B deductible applies to the services themselves, not to your monthly premium. Your premium is a separate payment you make whether or not you have used any services that year.

Deductibles in Medicare Advantage and Medigap plans

If you have a Medicare Advantage plan (Part C), the plan sets its own deductible structure. Some Advantage plans have no deductible, while others have a deductible that may be lower or higher than Original Medicare. Advantage plans must cover everything Original Medicare covers, but they can organize cost-sharing differently. You will find the deductible amount in your plan's Summary of Benefits or Evidence of Coverage document.

Medigap plans (supplemental insurance) work alongside Original Medicare and help pay the costs that Medicare does not cover — including deductibles and coinsurance. Most Medigap plans do not have a deductible themselves, though you still owe the Original Medicare deductibles before Medigap begins to help. Plan G and Plan N are exceptions; they have small deductibles of their own.

If you have Medigap coverage, you typically pay your Medigap premium and the Original Medicare deductible, then Medigap covers much of what comes after. This is why many people with Medigap have lower out-of-pocket costs than those with Original Medicare alone.

How deductibles change from year to year

Medicare adjusts deductible amounts annually, usually in October or November, to take effect on January 1. The new amounts are based on changes in healthcare costs. You can find the current year's deductibles on Medicare.gov or by calling 1-800-MEDICARE.

If you have a Medicare Advantage or Medigap plan, your plan will send you a notice of changes in the fall, showing any changes to your deductible for the coming year. This is also the time to review whether your current plan still meets your needs, since deductible changes may affect your out-of-pocket costs.

What to ask your doctor or Medicare

Before a procedure or service, ask your doctor's office whether the service is covered by Medicare and whether you have already met your deductible for the year. If you have not, ask for an estimate of what you will owe. Your doctor's office can often tell you whether a service counts toward your deductible or whether it is a preventive service that does not.

If you are unsure about your deductible or how much you owe, call 1-800-MEDICARE to speak with a representative. They can tell you your current deductible, how much you have paid toward it so far this year, and what you still owe. You can also log into your Medicare account at Medicare.gov to view your claims history and deductible status.

When to seek more information

Contact Medicare or your plan if you receive a bill that seems wrong or if you are unsure whether a service should have counted toward your deductible. If you have Original Medicare and a service was denied, you have the right to appeal. If you have Medicare Advantage or Medigap, your plan's customer service line can explain why a charge was applied and whether you can dispute it.

If you are turning 65 or newly enrolled in Medicare, review your plan documents carefully during your first year. Many people do not realize they have a deductible until they receive a bill, so understanding it upfront helps you budget for healthcare costs.

Frequently Asked Questions

Do I have to pay both a Part A and Part B deductible?

Yes. Part A and Part B have separate deductibles. You may meet both in the same year if you have both a hospital stay and doctor visits or other Part B services. They do not combine into one deductible.

What happens if I switch Medicare plans mid-year?

If you switch from Original Medicare to Medicare Advantage or vice versa, the deductible you have already paid toward one plan does not transfer to the other. You may owe a new deductible with your new plan, depending on when you switch and what services you have already used.

Does my Medigap plan pay my Medicare deductible?

Most Medigap plans pay the Medicare deductible after you meet it. However, you still owe the deductible first. Plans G and N have their own small deductibles, which you pay before the Medigap coverage begins.

Are preventive services subject to the deductible?

No. Medicare covers many preventive services at 100 percent with no deductible, including annual wellness visits, cancer screenings, and vaccinations. Your doctor's office can tell you whether a specific service is preventive or if it counts toward your deductible.

Can I see my deductible status online?

Yes. Log into your account at Medicare.gov to view your claims and see how much you have paid toward your Part B deductible. For Part A, you can also call 1-800-MEDICARE to ask about your current benefit period and deductible status.