As the U.S. health care system continues to change, more Americans are being told “your doctor is not in the network” or “your insurance won’t cover that.” This concern also affects Americans on Medicare. The good news is that most Medicare beneficiaries can use Medicare to pay for 99% of the physicians in America. The bad news is that the system is complicated and can cause unnecessary concerns about coverage.
Let’s try to cut through some of the clutter.

First, a few key points. If you are on Medicare, your health care is paid for through “traditional” Medicare unless you choose to be covered by a Medicare Advantage (or “MA”) plan. If you choose an MA plan, your health care is paid for by a private insurance company that receives payments from Medicare. MA plans are, generally, “managed care” plans—and if you are in an MA plan your coverage is going to be limited to physicians in your MA plan network. So, although MA plans have many advantages—if you choose MA you need to learn which physicians are in your network and be very careful because going out of network can be expensive.

However, if you are in “traditional” Medicare your health care is paid for directly by Medicare—Part A of Medicare pays for hospital (and related) costs and Part B pays for physician costs. Generally, Part B pays for 80% of the services you receive from your doctor (after an annual deductible—currently $147— is met.) Medicare has very strict limits on how much they will pay physicians under Part B—and has also set very strict limits on how much a doctor can charge you above the amount paid by Medicare. And, over 99% of physicians follow these limits. Here are the key rules:

-If your doctor “participates” in Medicare, they agree to use the payment schedule established by Medicare for all care provided to Medicare recipients, to collect 80% of the scheduled amount from Medicare, and to limit their charges to you to 20% of the scheduled amount. In a recent study, 96% of physicians participate in Medicare.

-If your doctor does not “participate” in Medicare, they can choose to charge you more than the Medicare scheduled amount. If they do this, they can charge about 10% more of the Medicare schedule. Also, they will (initially) make you pay this entire amount and you can then get reimbursed by Medicare for Medicare’s portion of the charges. About 3% of physicians are “non-participating.”

-If your doctor “opts out” of Medicare there are no limits on the amount you can be charged for services. And, Medicare will not reimburse you for any of those costs. Fortunately, less than 1% of physicians have opted out of Medicare. If your doctor has opted out of Medicare, they have to tell you that you will be responsible for the entire bill.

If you are in Traditional Medicare, you can buy supplemental insurance to pay for your annual deductible and for the 20% not covered by Medicare Part B. And, Medicare Supplements do not limit your choice of doctors—as long as your doctor is not one of the 1% who opt out of Medicare, the Medicare Supplement will cover you.

So, the bottom line is that Medicare—and Medicare Supplement insurance—covers you for 99% of the doctors in America. So, for the vast majority of traditional Medicare beneficiaries—your doctor is covered.