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Should I be worried about Medicare excess charges?

Hidden Fees spelled out on a Chalk Board referencing Medicare Part B excess charges.

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If you’ve been comparing Medicare Supplement plans, you may have noticed that a couple of them (Plans F and G) cover “Part B excess charges.” 

Fortunately, there’s a small chance that you could be billed for excess charges. Still, it helps to know how they work and how they may impact your out-of-pocket healthcare costs. Bobby Brock Insurance is here to help you understand Medicare excess charges.

What are Part B excess charges?

Doctors and other health care providers may choose whether they participate with Medicare. Those who participate with Medicare agree to charge only the Medicare-approved amount for their services. By agreeing to accept this amount as payment in full for covered services, they are “accepting Medicare assignment.”

Many claims that are processed have no excess charges. Of the ones that do, the average amount of the charge is typically under $20. So, you should not be worried about excess charges. 

What is Medicare assignment?

Excess charges can be easily avoided if the policyholder goes to a provider that takes Medicare assignment. When a medical provider accepts Medicare assignment rates, they won’t bill you more than the Medicare-allowable amount.

Providers who don’t participate in Medicare may bill you up to 15% above the Medicare-allowable rate. This extra amount is deemed as a Part B excess charge, which you’ll need to pay out-of-pocket — unless you have a Medigap plan F or G that covers excess charges.   

The simplest way to avoid excess charges is to always see doctors who accept Medicare assignment.

How could excess charges impact you?

Let’s say you visit a nonparticipating dermatologist who performs a chemical peels procedure to treat age spots. If the Medicare allowable rate for this procedure is $500, the dermatologist could bill you $575 (15% more than $500 is $75). Assuming you’ve reached your Part B deductible already, your out-of-pocket expenses for the procedure would be $175. This is your 20% coinsurance amount of $100 plus the 15% Part B excess charge of $75. With a participating provider, your out-of-pocket costs would be just $100. 

Excess charges don’t go towards your Medicare Part B deductible. If you frequently see a doctor who doesn’t accept assignment, the excess charges can really add up by the end of the year.  

Did you know?

  • 96% of providers who offer Medicare-covered services accept Medicare assignment. 
  • 99% of all Medicare-covered services are paid on assignment.

Most physicians and clinical professionals have a participation agreement with Medicare. This means they are “Medicare approved.” If a physician opts out of Medicare, they must inform their patients.

Wall of a whitewashed silhouette of the USA with wood panels referencing the States that don’t allow Part B excess charges.
Some states have taken the initiative to protect seniors against excess charges.

States that don’t allow Part B excess charges

Some states have taken the initiative to protect seniors against excess charges. These states passed laws that forbid healthcare providers from charging people anything above the Medicare acceptable rate:    

  • Ohio
  • Vermont
  • New York
  • Minnesota
  • Connecticut 
  • Rhode Island
  • Pennsylvania
  • Massachusetts

Beneficiaries in these states may also consider Medigap Plan N, which has similar coverage to Plan G.

Plan N has lower premiums because it doesn’t cover excess charges. If you live in one of the states listed above, Plan N may interest you.    

Have Medicare concerns? We can help

At Bobby Brock Insurance, we have a dedicated staff that can help people in 45 states. Before you make a purchasing decision, please consult us to determine what’s best for your unique situation. Contact us today to discuss your Medicare options.

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