Understanding Medicare Deductibles
Medicare deductibles are one of the most important; and sometimes confusing, parts of how Medicare works. Whether your clients are on Original Medicare or a Medicare Advantage plan, understanding Medicare deductibles is an important part of healthcare decisions. Knowing what they are, when they apply, and what services count toward them can help avoid costly surprises.
As an agent, being able to break this down simply is a great way to build trust and guide clients to the right coverage.
What Is a Medicare Deductible
A deductible is the amount a beneficiary must pay out of pocket for covered services before Medicare or their Medicare plan starts sharing the cost.
There are several types of Medicare deductibles:
- Medicare Part A Deductible – applies to each benefit period for inpatient hospital care.
- Medicare Part B Deductible – applies once per calendar year for medical services like doctor visits and outpatient care.
- Medicare Advantage (Part C) Deductible – set by the private plan and may apply to medical, drug coverage, or both.
- Medicare Part D Drug Deductible – applies to certain prescription drugs (usually higher-tier medications).
Watch a quick YouTube video on Medicare Advantage vs. Medicare Supplements
Services That Use Deductibles
Here’s what typically applies to each deductible:
- Part A (Hospital) Deductible:
- Inpatient hospital stays
- Skilled nursing facility care (after meeting Part A requirements)
- Some home health care and hospice services
- Part B (Medical) Deductible:
- Physician visits
- Outpatient surgery
- Diagnostic tests (labs, X-rays, imaging)
- Durable Medical Equipment (DME)
- Preventive care is usually exempt — covered at 100%
- Medicare Advantage Deductible:
- Inpatient hospital care (if plan requires it)
- Outpatient hospital/surgical care
- Advanced diagnostic imaging (MRI, CT scans)
- Durable Medical Equipment (DME)
- Emergency/urgent care (sometimes)
- Part D Deductible:
- Applies to most Tier 3 and higher brand-name drugs
- Generic drugs on lower tiers may bypass the deductible
Services That Skip the Deductible
To keep care accessible, Medicare and Medicare Advantage plans often waive the deductible for:
- Preventive screenings (wellness visit, mammogram, colonoscopy)
- Routine lab work
- Many primary care visits
- Many Tier 1 and Tier 2 generic prescriptions
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Deductibles Are Just One Piece of the Puzzle
When reviewing coverage options with clients, don’t just look at the deductible amount. Also compare:
- Coinsurance and copays – what clients pay after meeting the deductible
- Maximum Out-of-Pocket (MOOP) on Medicare Advantage plans
- Medigap coverage – many Medigap plans cover some or all deductibles, reducing out-of-pocket costs
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By helping clients understand when and how deductibles apply, you make it easier for them to budget for healthcare and choose the plan that fits their needs.