What the annual deductible means

The annual deductible is the amount of money you must pay for health care services yourself before Medicare starts to pay its share. Once you reach that dollar amount in a calendar year, Medicare begins covering a portion of your costs. The deductible resets to zero on January 1 each year.

The deductible amount varies depending on which part of Medicare you have. Part A (hospital insurance) has one deductible. Part B (medical insurance) has a different one. If you have a Medicare Advantage plan or a Medigap policy, your deductible may be different still.

Understanding your deductible matters because it affects how much you actually spend before your insurance kicks in. Some services may be covered before you meet your deductible, and some may not be — the rules differ by part.

Key Takeaways

  • Part A has a deductible per hospital stay (not per year), and Part B has a yearly deductible that applies to doctor visits and outpatient services.
  • Some preventive services like screenings and vaccines are covered by Medicare with no deductible, even before you meet your annual amount.
  • Once you reach your Part B deductible, Medicare typically pays 80 percent of approved charges and you pay 20 percent for most services.
  • Medicare Advantage and Medigap plans set their own deductibles, which may be lower or higher than Original Medicare.
  • Deductible amounts change each year, so you should check the current year's amount when you review your coverage.

Part A deductible for hospital stays

Part A covers inpatient hospital care, skilled nursing facility care, and some home health services. The Part A deductible applies per hospital stay, not per year. This means you pay the deductible once when you enter the hospital, and it does not reset until you have been out of the hospital for 60 days in a row.

If you are readmitted to the hospital within 60 days of discharge, you do not pay a second deductible — you are considered part of the same hospital stay. If you are admitted after 60 days have passed, you pay the deductible again.

The Part A deductible amount changes annually. After you pay the deductible, Medicare covers all approved hospital charges for days 1 through 60 of your stay. For days 61 through 90, you pay a daily coinsurance amount. Beyond 90 days, costs rise significantly.

Part B deductible for doctor visits and outpatient care

Part B covers doctor visits, outpatient services, lab work, imaging, and durable medical equipment. The Part B deductible is a yearly amount that you must pay before Medicare begins to share the cost of these services.

Once you meet your Part B deductible in a calendar year, Medicare typically pays 80 percent of the approved charge for most services, and you pay the remaining 20 percent (called coinsurance). This 80/20 split continues for the rest of the year.

Some Part B services have different cost-sharing rules. Mental health services, for example, may have different coinsurance percentages. Preventive services covered under Part B — such as annual wellness visits, cancer screenings, and vaccines — are covered at no cost to you, even before you meet your deductible.

Services covered before you meet your deductible

Not everything requires you to pay toward your deductible first. Medicare covers certain preventive services with no deductible and no coinsurance. These include annual wellness visits, mammograms, colonoscopies, blood pressure checks, diabetes screenings, and most vaccines.

The full list of preventive services covered at no cost is available on Medicare.gov. If you are unsure whether a specific service is preventive, ask your doctor or call Medicare at 1-800-MEDICARE before your appointment.

Emergency room visits and urgent care are not preventive services, so they count toward your deductible. However, if you are admitted to the hospital from the emergency room, the emergency room charges may be bundled into your hospital bill and covered under Part A rules instead.

How deductibles work in Medicare Advantage and Medigap plans

If you have a Medicare Advantage plan (Part C), the plan sets its own deductible, which may be lower, higher, or the same as Original Medicare. Some Medicare Advantage plans have no deductible at all. You pay the deductible to the plan, not to Medicare.

If you have a Medigap policy (supplemental insurance), it works alongside Original Medicare. Medigap does not replace the Medicare deductible — you still pay it to Medicare first. However, some Medigap plans cover the deductible amount after you pay it, which effectively reduces your out-of-pocket cost.

The Medigap plan you choose determines how much of your deductible it covers. Plan G, for example, covers the Part B deductible. Plan N does not. Review your plan documents or call your insurance company to understand what your plan covers.

Tracking your deductible throughout the year

You are responsible for keeping track of how much you have paid toward your deductible. When you receive a bill from a doctor or hospital, the statement should show how much counts toward your deductible and how much you owe.

Medicare also sends you an Explanation of Benefits (EOB) after each service. The EOB shows what Medicare was billed, what the approved amount is, how much counts toward your deductible, and what you owe. Keep these documents so you know when you have reached your deductible.

If you use multiple providers or receive care in different settings, charges from all of them count toward the same deductible. For example, a doctor visit and lab work both count toward your Part B deductible in the same year.

What happens after you meet your deductible

Once you have paid your Part B deductible for the year, Medicare begins to pay its share of approved charges. For most services, Medicare pays 80 percent and you pay 20 percent coinsurance for the rest of the calendar year.

This coinsurance continues even after you meet your deductible. There is no annual out-of-pocket maximum in Original Medicare, which means your coinsurance costs can continue to add up throughout the year. This is one reason many people purchase Medigap coverage — to help pay the coinsurance amounts.

Part A has a different structure. After you pay the deductible, Medicare covers all approved inpatient hospital charges for the first 60 days. Beyond that, you pay daily coinsurance amounts that increase the longer you stay.

Frequently Asked Questions

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

Yes, if you use both hospital services and outpatient services in the same year, you pay both deductibles. They are separate and do not count toward each other. However, if you only use one type of service, you only pay that deductible.

What if I switch from Original Medicare to a Medicare Advantage plan mid-year?

When you switch plans, your deductible does not carry over. You start fresh with your new plan's deductible rules. Any amounts you paid toward your Original Medicare deductible do not count toward your Medicare Advantage deductible, and vice versa.

Are there any services that do not count toward my deductible?

Yes. Preventive services like screenings, vaccines, and annual wellness visits are covered with no deductible. Additionally, if you are in a Medicare Advantage plan, some plans cover certain services with no deductible at all. Check your plan documents or call your plan to see which services are exempt.

Can I see my deductible information online?

Yes. If you have a Medicare.gov account, you can log in to view your claims and see how much you have paid toward your deductible. You can also call Medicare at 1-800-MEDICARE to ask about your deductible status, or contact your insurance company directly.

What should I do if I think I was charged incorrectly toward my deductible?

Review your Explanation of Benefits carefully. If you believe a charge was applied incorrectly, contact the provider's billing department first to ask for an explanation. If you still disagree, you can file an appeal with Medicare. Your Explanation of Benefits includes instructions on how to appeal.