Medicare Your Coverage Options

Traditional Medicare protects people from unexpected costs

Written by Diane Archer

Traditional Medicare provides enrollees with good protections against unexpected costs. People in traditional Medicare are rarely responsible for the cost of the care they receive, even if Medicare denies coverage. 

Here are eight Medicare protections that provide people in traditional Medicare financial security.

  1. Federal regulation of provider rates  for people in traditional Medicare. This keeps provider rates down and also keeps down coinsurance and supplemental costs. (Medicare Advantage plans are not able to negotiate provider rates as effectively as traditional Medicare. Although, unlike commercial insurers for working people, they are generally able to piggyback off of traditional Medicare rates.)
  2. A stable of thousands of doctors throughout the US who are “participating providers” (96 percent); they agree to take Medicare’s approved charge as payment in full. (Medicare Advantage plans typically limit their coverage to a small network of doctors within a community, except in emergencies.)
  3. A requirement that non-participating providers, providers who “take Medicare,” but who do not agree to take Medicare’s approved charge as payment in full (4 percent), not charge more than 15 percent above Medicare’s approved charge. Some states have lower limits. (Medicare Advantage enrollees are fortunate today in that out-of-network doctors cannot charge them more than what they can charge people in traditional Medicare. But, Medicare Advantage enrollees usually have to pay the charge for out-of-network care in full out of pocket.)
  4. A requirement that both participating providers and non-participating providers submit their charges directly to Medicare so as to relieve patients from that burden.
  5. A requirement that participating doctors collect their reimbursement directly from Medicare and not charge enrollees upfront for their services. (Medicare Advantage plans also pay their doctors directly, but enrollees may have to go through a referral or prior authorization process in order for their care to be covered.)
  6. A process by which Medicare notifies most supplemental insurers after it pays its share of the charge to pay their share, relieving patients of the burden of submitting claims to supplemental insurers. That said, if enrollees do not have Medicaid or retiree coverage that fills coverage gaps, traditional Medicare enrollees must buy supplemental insurance, “Medigap.” Medigap can easily cost $150 to $200 a month. (Medicare Advantage enrollees usually must pay some amount out of pocket for their care. Copays and deductibles can be as high as $6,700 a year for in-network care alone.)
  7. A requirement that all doctors who provide services to people with Medicare must bill Medicare for their services, unless they have elected to “opt out” of Medicare (<1 percent). And, if they elect to opt out, they must inform their patients in writing and have them sign a waiver agreeing to pay privately for their services in advance of providing them services.
  8. A requirement, in many cases, that if a doctor or other health care provider does not notify a patient in writing in advance that Medicare might not pay for a service, the doctor or other health care provider is liable for the cost if Medicare denies payment. The patient is not responsible for the cost of care. (Medicare Advantage enrollees have a similar protection but are liable for the copay.)

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