What you pay before Medicare coverage starts

A deductible is the amount you pay out of your own pocket for healthcare services before Medicare begins to pay its share. Medicare has different deductibles depending on which part of coverage you use — Part A (hospital care), Part B (doctor visits and outpatient services), and Part D (prescription drugs) each have their own yearly deductible that resets on January 1st.

The deductible amounts change each year. For 2024, the Part A deductible is $1,632 per benefit period for hospital stays, the Part B deductible is $240 per year, and Part D deductibles vary by plan but range from $0 to several hundred dollars depending on which prescription drug plan you choose. These numbers are set by Medicare and announced in the fall for the following year.

Once you meet your deductible for the year, Medicare starts to share the cost with you — but you will still pay copayments or coinsurance for most services. The deductible only covers the initial threshold; it does not mean all your care is free after you reach it.

Key Takeaways

  • Medicare Part A, Part B, and Part D each have separate yearly deductibles that reset every January 1st.
  • Part A deductibles explore per benefit period for hospital stays, while Part B deductibles are yearly amounts for doctor and outpatient services.
  • Deductible amounts change annually and are announced by Medicare in the fall for the following year.
  • Reaching your deductible does not mean your care is free — you will still owe copayments and coinsurance for most services.
  • Medigap and Medicare Advantage plans may cover some or all of your deductible costs, which can lower your out-of-pocket expenses.

How Part A deductibles work for hospital stays

Part A covers inpatient hospital care, skilled nursing facility care, hospice, and some home health services. The deductible applies per benefit period, not per year — a benefit period begins when you enter the hospital and ends after you have been out of the hospital or skilled nursing facility for 60 consecutive days.

If you are admitted to the hospital multiple times in the same calendar year but within the same benefit period, you only pay the deductible once. However, if you are readmitted after the 60-day break, a new benefit period starts and you owe a new deductible. This means you could potentially owe multiple Part A deductibles in a single calendar year if you have separate hospital stays.

After you meet the Part A deductible, Medicare covers all costs for days 1 through 60 of your hospital stay. For days 61 through 90, you pay a daily coinsurance amount. If your stay extends beyond 90 days, you enter your "lifetime reserve days" and owe a higher daily coinsurance.

How Part B deductibles work for doctor and outpatient care

Part B covers doctor visits, outpatient services, medical equipment, and preventive care. The Part B deductible is a yearly amount — once you pay it in a calendar year, it does not reset until January 1st of the following year, regardless of how many times you see a doctor or use outpatient services.

The deductible applies to most Part B services, but some preventive services are covered at no cost even before you meet your deductible. These include annual wellness visits, cancer screenings, and certain vaccinations. When you use a service that counts toward your deductible, your provider or Medicare will track it and let you know when you have met it.

After you meet your Part B deductible, Medicare typically pays 80 percent of the approved amount for most services, and you pay the remaining 20 percent as coinsurance. This coinsurance continues throughout the year and does not stop once you reach a certain out-of-pocket maximum under Original Medicare.

How Part D deductibles work for prescription drugs

Part D is prescription drug coverage offered through private insurance companies approved by Medicare. Each Part D plan sets its own deductible, which can range from $0 to several hundred dollars per year. Some plans have no deductible at all, while others require you to pay the full cost of medications until you reach the deductible.

The Part D deductible resets on January 1st each year. Once you meet it, you move into the "initial coverage phase," where you and your plan share the cost of medications through copayments or coinsurance. The exact amounts depend on your specific plan and the tier of the drug — generic drugs typically have lower copayments than brand-name drugs.

Part D also has a coverage gap (sometimes called the "donut hole") that occurs after you and your plan have spent a certain amount on drugs. During the gap, you pay a higher percentage of drug costs. However, Medicare has been gradually closing this gap, and the out-of-pocket costs during the gap have been decreasing in recent years.

How Medigap and Medicare Advantage plans affect your deductible

If you have a Medigap (supplemental insurance) plan, it may cover some or all of your Medicare deductibles and coinsurance. Different Medigap plans offer different levels of coverage — some plans cover the full Part A and Part B deductibles, while others cover only part of them. Your Medigap policy will specify exactly what it covers.

If you have a Medicare Advantage plan (Part C), it replaces Original Medicare and has its own deductibles, copayments, and out-of-pocket maximums. Medicare Advantage deductibles are often lower than Original Medicare deductibles, and many plans have an annual out-of-pocket maximum — once you reach it, the plan covers 100 percent of your in-network care for the rest of the year.

When comparing plans, check the deductible amounts carefully. A plan with a higher deductible might have lower monthly premiums, while a plan with a lower deductible might cost more per month but save you money if you use healthcare services frequently.

Tracking your deductible throughout the year

Medicare sends you a summary of your deductible status, but you can also track it yourself. For Part B, ask your healthcare provider or check your Medicare Summary Notice (the bill Medicare sends you after each service) to see how much of your deductible you have met. Your provider's office can also tell you whether you have met your deductible before you receive services.

For Part D, log into your prescription drug plan's website or call the plan directly to find out your deductible status. Many plans have online portals where you can see your claims history and remaining deductible amount. Pharmacies can also tell you your deductible status when you pick up a prescription.

Keeping track matters because once you meet your deductible, your out-of-pocket costs change. Knowing where you stand helps you plan for upcoming medical expenses and understand what you will owe at your next doctor visit or pharmacy pickup.

Frequently Asked Questions

Does my deductible reset if I change Medicare plans?

No. Your deductible resets on January 1st regardless of whether you change plans. However, if you switch to a different Part D plan mid-year, the new plan's deductible applies to drugs filled under that plan going forward — your previous plan's deductible does not carry over.

What happens if I do not meet my deductible before the year ends?

If you do not meet your deductible by December 31st, it does not carry over to the next year. The unused deductible amount is lost, and a new deductible resets on January 1st. This is why some people try to schedule necessary services before year-end if they are close to meeting their deductible.

Can I see how much of my Part B deductible I have used?

Yes. Check your Medicare Summary Notice, which shows claims submitted to Medicare and how much counts toward your deductible. You can also call Medicare at 1-800-MEDICARE or log into your Medicare.gov account to view your claims history and deductible status.

Do preventive services count toward my deductible?

Most preventive services covered by Medicare do not require you to meet your deductible first — they are covered at no cost. These include annual wellness visits, cancer screenings, and vaccinations. However, if a preventive visit leads to additional testing or treatment, those services may count toward your deductible.

What if I cannot afford my deductible?

Talk to your doctor or healthcare provider about your situation. Some providers offer payment plans or can refer you to local resources that help with medical costs. You can also contact your State Health Insurance information Program (SHIP) for free counseling about your Medicare options and potential cost-saving programs.