The Medicare Part B deductible is one of the first costs many people notice after enrolling in Medicare. Part B covers outpatient and medical services, such as doctor visits, specialist care, lab work, preventive services, durable medical equipment, and many outpatient procedures.
Understanding the deductible can make it easier to plan for health care costs in retirement. It can also help you compare Original Medicare with a Medicare Supplement plan or a Medicare Advantage plan.
What is the Medicare Part B deductible?
A deductible is the amount you generally pay for covered health care services before Medicare begins paying its share. The Part B deductible applies each calendar year, from January through December.
The deductible amount can change from year to year. You do not usually pay it as one bill at the start of the year. Instead, your providers bill Medicare as you receive covered Part B services. You may pay the Medicare-approved amount until you have met the annual deductible.
For example, if you have a covered doctor visit early in the year, you may be responsible for the allowed charge for that visit if you have not yet met your deductible. That payment counts toward your Part B deductible.
What happens after you meet the deductible?
After you meet the Part B deductible, Original Medicare generally pays 80% of the Medicare-approved amount for most covered Part B services. You are generally responsible for the remaining 20%, called coinsurance.
That 20% may apply to doctor visits, outpatient surgery, imaging, physical therapy, and other covered services. Since there is no standard annual out-of-pocket limit under Original Medicare alone, the coinsurance can add up if you need frequent care or receive a costly outpatient treatment.
This is one reason some people consider a Medicare Supplement plan. Medicare Supplement insurance, also called Medigap, may help pay certain out-of-pocket costs left by Original Medicare, including Part B coinsurance. Benefits can vary by plan letter, carrier, and state.
Do all Part B services count toward the deductible?
No. Some Medicare-covered preventive services may be covered without requiring you to meet the Part B deductible first. These services can include certain screenings, vaccines, and annual wellness visits when you meet Medicare’s coverage rules and use a provider who accepts Medicare assignment.
Assignment means the provider agrees to accept Medicare’s approved amount as payment in full for covered services. You may still owe a deductible, coinsurance, or copayment when applicable, but assignment can help you avoid added charges above Medicare’s approved amount.
Not every service that feels preventive is automatically free. A routine visit may turn into a diagnostic visit if you discuss a new health concern, need testing, or receive treatment. In that situation, the Part B deductible or coinsurance may apply.
Does Medicare Supplement insurance pay the Part B deductible?
For most people buying a new Medicare Supplement plan today, the answer is no. Federal law generally does not allow Medicare Supplement plans sold to people newly eligible for Medicare on or after January 1, 2020, to cover the Part B deductible.
That means popular options such as Plan G and Plan N may help with Part B coinsurance after you meet the deductible, but they do not pay the deductible itself. You would generally pay that annual amount before your plan’s Part B cost-sharing benefits begin.
Some people who became eligible for Medicare before 2020 may still have a Plan F or Plan C that covers the Part B deductible. Those plans may not be available to people who first became eligible after that date. Availability and underwriting rules can vary by state and carrier.
How does the Part B deductible work with Medicare Advantage?
Medicare Advantage plans are another way to receive Medicare benefits through a private insurance company. These plans must cover Medicare Part A and Part B services, but they can set their own copayments, coinsurance, deductibles, provider networks, and service rules.
A Medicare Advantage plan may not use the Original Medicare Part B deductible in the same way. Instead, it may have set copayments for doctor visits and other services, along with an annual limit on covered in-network out-of-pocket costs. Plans can also include additional benefits, such as dental, vision, hearing, fitness, or prescription drug coverage, depending on the plan.
The tradeoff is that Medicare Advantage plans may have network rules, referral requirements, or prior authorization requirements for certain services. It is wise to review the plan’s doctors, hospitals, prescription coverage, and expected out-of-pocket costs before enrolling.
How can you prepare for Part B out-of-pocket costs?
Knowing about the Part B deductible is a good first step. You may also want to consider how often you see doctors, whether you expect outpatient care, and how comfortable you are paying coinsurance as you go.
- Set aside funds for your annual deductible and possible coinsurance.
- Ask providers whether they accept Medicare assignment before receiving non-emergency care.
- Review your Medicare Summary Notice to see how claims were processed.
- Compare Medicare Supplement plans if you want help with many Original Medicare cost-sharing expenses.
- Compare Medicare Advantage plans if you prefer plan-based copayments and are comfortable with the plan’s network and rules.
There is no single best choice for everyone. Your health needs, budget, travel habits, preferred doctors, and comfort with provider networks can all matter. If you would like free, no-pressure help understanding how the Medicare Part B deductible fits into your coverage choices, reach out to Eric at Medicare with Eric. With 25 years of experience, he can help you review Medicare Supplement options available in your state.