Does Medicare Have a Deductible?

If you’re a part of Original Medicare, it’s important to understand how your money works in the program. There are a lot of different costs, like deductibles, premiums and copayments, that can affect how much money you’ll spend on your health care. Let’s take a closer look at deductibles. Deductibles are the amounts of money you’ll have to pay before insurance starts covering the total costs. And when it comes to Medicare, there are different deductibles for Medicare Part A (hospital insurance) and Medicare Part B (medical insurance). We’re here to help make it all a little easier to understand.

What is the Deductible for Medicare?

Original Medicare is divided into two separate parts that cover different services. Each part has its own deductible.

Medicare Part A (hospital insurance) – For each benefit period, there is a deductible that applies to hospital stays before Original Medicare starts to pay. In 2024, the Part A deductible is $1,632 per benefit period.
Medicare Part B (medical insurance) – The Part B deductible is the annual amount you pay before Medicare stats to cover its share of outpatient services and doctor visits. In 2024, the Part B deductible is $224.

A key difference between these deductibles is how often you have to pay them. Part A is based on benefit periods, which are basically defined as the time from when you are first admitted to a hospital or care facility to 60 days after you last received care. There is no limit to the number of benefit periods you can have in a year. So, this means you may need to pay a Part A deductible more than once in a year. The Part B deductible is an annual cost, so you’ll only pay once a year. Deductibles for Medicare Part D (drug coverage) vary across the different plans that are available. Some plans have no yearly deducible at all. In 2024, the maximum annual deductible for Medicare Part D is $545. Deductibles also vary for Medicare Part C, also known as Medicare Advantage. In general, the lower your deductible is through these private insurance plans, the higher premium you’ll pay.

What to Account for With Your Deductible

There’s a lot you need to consider when it comes to Medicare deductibles. Most importantly, is the fact that they change annually. Medicare usually announces new deductible amounts in October, so it’s important to check for updates. Knowing the new amount you might need to pay can help you budget for the year ahead. Once you reach your Part A or Part B deductible, you’ll pay 20% of the approved cost – Medicare then pays the other 80%.

Options for Affordable Deductible Plans

There are several options to help you lower your costs on Medicare deductibles for Part A and Part B.

Medical Supplement Insurance

Medical Supplement Insurance, or Medigap, is extra insurance you buy from a private health insurance company. It can help cover some of the costs you have to pay with Original Medicare, like deductibles. You can sign up for a Medigap plan anytime. However, the best time to buy is during your six-month Medicare Supplement Open Enrollment period. Plus, you can only get Medigap if you already have Original Medicare.

Medicare Advantage

Medicare Advantage, also known as Medicare Part C, is an alternative to Original Medicare. These private insurance plans offer the same benefits as Original Medicare but will also include additional coverage. Extra Help Program Extra Help is a program that low-income Medicare recipients can enroll in. This program helps with the cost of your prescription drugs, like deductibles and copays. You can apply for Extra Help any time before or after you enroll in Medicare Part D.

Understanding Medicare deductibles is an important part of managing your health costs. You need to know which parts of Medicare you have and if you’re using a Medicare Advantage or Part D plan. Changes happen every year, so it’s a good idea to keep an eye on deductible increases so you can budget accordingly.

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What is the maximum out-of-pocket for Medicare?

Your out-of-pocket costs will vary based on what coverage you have, what providers you visit and what services you receive. The maximum out-of-pocket (MOOP) is the annual cap on these costs – and they vary by plan. •

Medicare Advantage (Part C) – In 2024, the out-of-pocket maximum for Part C plans is $8,850 for approved services. However, individual plans can set lower limits if they choose. •

Medigap – The 2024 out-of-pocket maximum for Medigap plan K is $7,060 and for Medigap plan L it’s $3,530. After you reach these limits, 100% of your costs for approved services will be paid for the rest of the year. Medicare Part D plans don't have hard out-of-pocket maximums, but they do have a “catastrophic coverage phase” after you hit $8,000 in out-of-pocket costs for covered drugs. During this phase, your copays and coinsurance for covered drugs are significantly reduced for the rest of the year.

Which is cheaper Medicare Advantage or Medicare Supplement?

Deciding if Medicare Advantage or Medicare Supplement (Medigap) is cheaper depends on a lot of things. Your healthcare needs, preferences and budget all need to be considered. Usually, Medicare Advantage plans have lower monthly premiums and out-of-pocket costs, but you might pay more when you go to the doctor. On the other hand, Medigap plans might cost more every month, but they can help cover out-of-pocket costs.