How Medicare's Annual Deductible Works and What You Pay

What the Medicare Annual Deductible Is

The Medicare annual deductible is the amount of money you must pay out of your own pocket for covered services before Medicare starts to pay its share. Once you reach that amount in a calendar year, Medicare begins covering a percentage of your costs — though you may still owe copayments or coinsurance on top of that.

The deductible amount changes each year and differs depending on which part of Medicare you have. Part A (hospital insurance) has one deductible. Part B (medical insurance) has a separate deductible. Part D (prescription drug coverage) has its own deductible. If you have a Medicare Advantage plan (Part C), the deductible rules are set by that specific plan and may differ from Original Medicare.

The deductible resets on January 1 each year, meaning any amount you paid toward it in December does not carry forward. This matters most if you reach your deductible late in the year — you will start over at zero on January 1.

Key Takeaways

Part A, Part B, and Part D each have their own separate annual deductibles, and you must meet each one independently.
The deductible amount changes yearly and is set by Medicare; you can find the current year's amounts on Medicare.gov or by calling 1-800-MEDICARE.
Once you meet your deductible, Medicare pays its share, but you typically still owe copayments or coinsurance for each service.
If you have a Medicare Advantage plan, your deductible rules are determined by your plan, not by Original Medicare, and may be lower or higher.
The deductible resets every January 1, so costs you paid in late December do not count toward next year's deductible.

How Part A and Part B Deductibles Work Differently

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 calendar year. A benefit period begins when you enter a hospital and ends after you have been out of the hospital or skilled nursing facility for 60 consecutive days. If you are hospitalized again after that 60-day window, a new benefit period starts and you owe a new deductible.

Part B covers doctor visits, outpatient services, medical equipment, and preventive care. The Part B deductible is a calendar-year deductible, meaning it resets on January 1 regardless of when you used services. You pay this deductible once per year, and then Medicare typically covers 80 percent of approved services while you pay 20 percent coinsurance.

The two deductibles are separate. Meeting your Part A deductible does not reduce what you owe for Part B, and vice versa. If you use both hospital and outpatient services in the same year, you will pay both deductibles.

Part D Prescription Drug Deductible

If you have a Part D prescription drug plan, it has its own annual deductible that you must meet before the plan begins to pay for most drugs. Not all drugs count toward the deductible — some plans cover certain preventive medications at no cost before you meet the deductible, and generic drugs may have lower or no deductible requirements depending on your plan.

Once you meet the Part D deductible, you enter a phase where you pay a copayment or coinsurance for each prescription. If your total drug costs reach a certain threshold (called the "initial coverage limit"), you enter the "coverage gap" or "donut hole," where you pay a higher share of drug costs. After you spend enough out of pocket to reach the catastrophic coverage threshold, Medicare covers most of the cost for the rest of the year.

Part D deductibles vary by plan. Some plans have no deductible, while others may have a deductible of several hundred dollars. You choose your Part D plan during the annual enrollment period, and the deductible amount is listed in each plan's details.

Medicare Advantage Plan Deductibles

If you have a Medicare Advantage plan (Part C), the deductible rules are set by your insurance company, not by Medicare. Some Advantage plans have no deductible at all. Others have a deductible that applies to all services, or separate deductibles for different types of care — for example, one deductible for in-network doctor visits and a different one for hospital stays.

Advantage plans must cover everything Original Medicare covers, but they can structure cost-sharing differently. Your plan documents will clearly state what your deductible is, when it applies, and what services are subject to it. If you are unsure, call the plan's customer service number on your insurance card.

What Happens After You Meet Your Deductible

Once you have paid your deductible for the year, Medicare begins to share the cost of covered services with you. However, meeting the deductible does not mean Medicare pays everything. You will still owe copayments (a fixed dollar amount per service) or coinsurance (a percentage of the cost).

For Part B services, after you meet the deductible, Medicare typically pays 80 percent and you pay 20 percent coinsurance. For Part A hospital stays, after you meet the deductible, you pay a copayment for each day you stay in the hospital beyond a certain number of days. The exact cost-sharing structure depends on the type of service and which part of Medicare covers it.

If you have a Medigap supplemental insurance policy or Medicaid, those programs may help pay your copayments and coinsurance after you meet your Medicare deductible. This is one reason many people purchase supplemental coverage — to reduce their out-of-pocket costs after the deductible is met.

Finding Your Current Deductible Amounts

The deductible amounts for each year are published by Medicare and are available on Medicare.gov under the "Costs" section. You can also call 1-800-MEDICARE (1-800-633-4227) to speak with a representative who can tell you the current deductible for Part A, Part B, and Part D.

If you have a Medicare Advantage or Part D plan, your plan's member handbook or your insurance card will list your specific deductible. You can also log into your plan's website or call the customer service number on your card to confirm the deductible amount and which services it applies to.

Knowing your deductible in advance helps you budget for healthcare costs. Many people track their out-of-pocket spending throughout the year to know when they are approaching or have met their deductible, so they can plan larger procedures or specialist visits accordingly.

Frequently Asked Questions

Do I have to pay my deductible every year?

Yes. The deductible resets on January 1 each year, so you will owe it again in the new year even if you met it in December. This applies to Part A, Part B, and Part D. The only exception is if you do not use any covered services in a given year — then you straightforward do not owe a deductible that year.

What if I switch Medicare plans during the year?

If you switch from Original Medicare to a Medicare Advantage plan or vice versa, any deductible you paid toward your old plan does not transfer to your new plan. You will start fresh with your new plan's deductible on the effective date of the switch. This is one reason to be careful about switching plans mid-year.

Does my deductible cover preventive services?

No. Medicare covers many preventive services — such as annual wellness visits, cancer screenings, and vaccinations — at no cost before you meet your deductible. These services are exempt from the deductible requirement. Your plan documents will list which services are covered as preventive care.

Can I use a Health Savings Account to pay my Medicare deductible?

Once you enroll in Medicare, you can no longer contribute to a Health Savings Account (HSA). However, if you have funds already in an HSA, you can use them to pay Medicare deductibles, copayments, and coinsurance. You cannot use HSA funds to pay Medicare premiums unless you are using a special type of HSA called an Archer MSA.

What if I cannot afford to pay my deductible?

If you have limited income, you may be may be able to access for programs that help pay Medicare costs, such as the Medicare Savings Program or Medicaid. These programs vary by state. You can contact your state Medicaid office or call 1-800-MEDICARE to learn whether you may be may be able to access for cost information.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.