Health insurance is an empty promise if your doctor or hospital is not covered. Headlines keep on reminding us that insurance companies are restricting the doctors and hospitals covered by their plans. People covered by Medicare have their own separate rules and these Medicare-specific rules have both good news and bad news—but mostly good news.
The good news—people covered by “original” Medicare have broad access to the doctor of their choice. Over 90% of doctors take Medicare. The bad news: the Medicare rules are complicated and are filled with traps for the unwary.
This blog post will be the first in a series to discuss Medicare coverage.
People covered by Medicare can be divided into two groups:
- People who have “original” Medicare—where the federal government acts as the insurer, collecting monthly premiums and reimbursing providers under Part A (Hospital Insurance) and Part B (Medical Insurance, such as physician services), and
- People who choose to participate in a Medicare Advantage plan—where a private insurance company provides coverage for hospitalization and medical costs (and may also cover prescription drugs).
If you are in a Medicare Advantage plan the insurance company determines which hospitals and doctors will be covered—and you can be surprised by how much the insurance company limits your choices. We will discuss the limits of choice under Medicare Advantage plans in a later blog post.
If you are in original Medicare, you may buy Medicare Supplement insurance to help pay for hospital and medical costs not covered by Parts A and B.
The rest of this post will discuss the (essentially) unlimited choices available if you choose to be covered by original Medicare.
Original Medicare and Providers’ Choices
Virtually all hospitals accept original Medicare. Period. It is always worth checking—and certain specialty, for-profit hospitals (especially psychiatric hospitals) may not accept Medicare Part A—but they are a very distinct minority.
Physicians are in a different structure—a doctor can choose to (1) participate in Medicare and accept “Medicare assignment” (the best deal for you), (2) elect not to participate in Medicare, but do not fully opt-out (which costs you some more than going to a physician who accepts assignment, and (3) completely opt out of Medicare (the worst deal for you).
Here is what these terms really mean:
|Doctor’s Status||Participate/Accepting Assignment||Not Participating in Medicare||Opt-out|
|What Your Doctor Can Charge You||
Your doctor agrees to use the fee schedule established by Medicare for services and will only charge you the Medicare deductible ($166 in 2016) and coinsurance amounts (20% of the Medicare fee schedule).
Your doctor may choose (on a service-by-service basis) to charge you higher fees– but this fee cannot be more than 15% over Medicare’s fee schedule.
|Your doctor can charge you any fee he or she chooses.|
|What You Will Have to Pay||Your doctor will not bill you any additional amounts, even if the doctor charges other (non-Medicare) patients more than the amount permitted by Medicare (called “balance billing”)||
You are responsible for the portion of the doctor’s charges in excess of Medicare’s assigned rate (in addition to the standard Medicare coinsurance and deductibles)–but this cannot be more than 15% over Medicare’s fee schedule.
|Medicare does not provide any reimbursement—either to the doctor or to you—so you are responsible for the entire cost of any services you receive|
|Who Bills Medicare||
The doctor will submit the bill directly to Medicare and will usually wait for Medicare to pay its share before asking you to pay your share.
The doctor may not collect reimbursement from Medicare; rather, they bill you directly (usually at the time of service).
The doctor must submit claims to Medicare on your behalf, but Medicare reimburses you directly for its portion of the covered charges.
|The doctor bills you– neither the doctor nor you can bill Medicare|
|Impact on Medicare supplement Coverage||
Medicare Supplement insurance plans will pay some or all of your deductible.
Some plans (Plan C and Plan F) will also pay your 20% coinsurance)
Medicare Supplement insurance plans will pay some or all your deductible.
Only two types of plans (Plans F and G) will pay any of your doctor’s charges above the Medicare schedule
|Medicare Supplement insurance will not provide any coverage for doctors who have opted out of Medicare|
A Warning—and Where to Learn More
You should check directly with your doctor to learn their status under Medicare. This is especially important because some doctors who accept Medicare for current patients are not accepting new Medicare patients.
Also, Medicare maintains a web site (called Physician Compare) that allows you to check your doctor’s status under Medicare. But again, to be safe, you should check directly with your doctor.
Next: Medicare Advantage—I have to go where?
 Henry J. Kaiser Foundation, Primary Care Physicians Accepting Medicare: A Snapshot (October, 2015)