Does Medicare have deductibles? Yes—the deductible is the annual amount you pay for covered services before Medicare starts to pay.
The Centers for Medicare & Medicaid Services recently released the 2022 Medicare Part A deductible ($1,556) and Part B deductible ($233).
If you're about to turn 65, you may have questions about Medicare costs. After all, Medicare isn't free. The amount of out-of-pocket costs you'll pay depends on the coverage options you choose and what kinds of healthcare services and benefits you use throughout the year. Deductibles are one category of costs you may be responsible for.
What is a deductible?
A deductible is the annual amount you pay for covered healthcare services before your Medicare plan starts to pay. Once you've satisfied your deductible, you'll typically only pay a copayment or coinsurance, and Medicare pays the rest. Both Medicare Part A and Part B have deductibles you may have to pay. If you have Medicare Advantage (Part C) or prescription drug coverage (Part D), you may or may not have a deductible depending on your plan's design.
The Centers for Medicare & Medicaid Services (CMS) recently released the 2022 Medicare deductibles for Parts A and B along with premiums and coinsurance amounts.
What is the Medicare deductible for 2022?
The 2022 Medicare deductible for Part B is $233. This reflects an increase of $30 from the deductible of $203 in 2021. Once the Part B deductible has been paid, Medicare generally pays 80% of the approved cost of care for services under Part B. You’re responsible for the remaining costs (20%) for services such as doctor visits, outpatient hospital services, certain home health services, and durable medical equipment (e.g., wheelchairs, hospital beds, home oxygen equipment, diabetes supplies).
The 2022 Medicare deductible for Part A (inpatient hospital) is $1,556, which reflects an increase of $72 from the annual deductible of $1,484 in 2021. This is the amount you’d pay if you were admitted to the hospital. The Part A deductible is not an annual deductible; it applies for each benefit period. A benefit period starts at hospital admission and ends when you’ve been out of the hospital or skilled nursing facility for 60 consecutive days. This means you may have multiple benefit periods requiring payment of the Part A deductible several times in a year.
In other words, your 2022 Medicare deductible for Part A would cover your share of costs for the first 60 days of a Medicare-covered hospital stay in a benefit period. On the 61st day of your stay, you would begin to incur coinsurance costs.
What is the cost of a hospital stay in 2022?
|Length of Stay||What You Pay|
|Days 61-90||$389 per day|
|Days 91+*||$778 per day|
*These are called "lifetime reserve days" because Medicare will only pay for these extra days once in your lifetime.
What is the cost of a nursing facility stay in 2022?
|Length of Stay||What You Pay|
|Days 21-100||$194.50 per day|
|After 100 days||All costs|
Under Medicare Part A, there are no deductibles or copayment for:
- Hospice care; there are only minimal costs for medications and inpatient respite care.
- Home health care, as long as you meet the eligibility criteria for coverage.
There are some services that Medicare covers 100%; no deductible applies. These fall under Medicare Part B and are called Medicare Preventive Services. Medicare Preventive Services are just that—healthcare services designed to prevent disease, promote healthy habits, and detect conditions early in order to avoid complications. They may involve health screenings, lab tests, vaccinations, and health education to help you take an active role in your health and wellness.
Is there a Medicare Part D deductible?
Medicare Part D is a separate health plan that helps cover the cost of prescription drugs. However, in addition to premiums and coinsurance, you may have to pay an annual deductible. Deductibles vary across different Medicare Part D drug plans—and some have no yearly deductible at all. In 2022, the maximum annual deductible for Medicare Part D is $480. This is an increase of $35 from the 2021 deductible.
Part D plans consist of four coverage periods:
- Deductible Period: If your Part D plan covers a medication, you'll pay the full negotiated price subject to your deductible if you have one. Once you've met your deductible, your plan will begin to pay.
- Initial Coverage Period: During this phase, you may have to pay copayments or coinsurance for each medication. For most Part D plans in 2022, the initial coverage period stops once you've accumulated $4,430 in total medication costs (including what you and your plan have paid for covered drugs).
- Coverage Gap: Once you reach $4,430 in total costs, you’ll enter what used to be called the Part D coverage gap or "donut hole." While this gap officially “closed” in 2020, you are still responsible for paying 25% of the costs of your generic and brand name drugs during this phase.
- Catastrophic Coverage: After you reach $7,050 in out-of-pocket costs for covered drugs (including your deductible), you'll pay significantly lower copays/coinsurance for the rest of the year. This amounts to 5% of the cost for each of your medications, or $3.95 for generic versions and $9.85 for brand-name versions (whichever is greater).
Is there a Medicare Part C deductible?
Many Medicare Advantage (Part C) plans have low or even no monthly premiums. Some may have separate deductibles for medical care and prescription drugs. However, you'll still be responsible for some out-of-pocket expenses, including an annual deductible. Since Part C is offered through private carriers, the deductible varies from plan to plan. Typically, the lower your deductible, the higher your premium.
As with Medicare Part D, you may be responsible for copayments or coinsurance once you've met your deductible. Before you purchase Part C coverage, be sure to conduct a comparison of multiple plans to get a better handle on what costs you'll have to pay.
What will I pay for Medicare Advantage/Part C out-of-pocket costs in 2022?
|Part C premium||Can vary from $0 to $200+ (estimated average monthly MA plan premium for 2022 is $19)|
|Part C deductible||Varies; typically just Part B and prescription drug coverage deductible|
|Copayments/Coinsurance||Varies depending on plan and service(s) received. Maximum out-of-pocket spending limit is $7,500.|
*Copayments may be required for doctors’ visits, specialist visits, labs, etc.
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