What is a Deductible?

by Doug Benson on September 10, 2011. Updated December 8, 2012

in Glossary

A deductible is the portion of coverage not covered by the insurance provider. Deductibles are normally quoted as a fixed amount. The deductible must usually be paid first before the insurance starts paying.

Deductibles can be annual or a per-service. An example of an annual deductible is the Medicare Part B deductible – $140 for calendar year 2013. This means that you are responsible for the first $140 of Doctor (non-hospital) costs for the year. Most Medicare Supplements cover this deductible for you.

An example of a per-service deductible is the $1,186 Part A deductible. Each time you are admitted into a hospital, you are responsible for the first $1,186. Again, most Medicare Supplement plans cover this cost for you.

Medicare Part-D prescription plans have a deductible as do most Medicare Advantage plans when seeking treatment outside their coverage network.

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