Medicare: know your limits and your doctor

Ask questions to avoid surprises on your Medicare bills

If you are over 65, you may think you know your Medicare benefits pretty well (and this site has included a number of good articles about those benefits). But whether you are enrolled in a Medicare Advantage plan, only basic Medicare, or Medicare with a supplement (or gap) plan, there are aspects of Medicare that are hidden and can bite you hard if you don’t pay attention.

Read the fine print

A little known fact is that there may be no limit on what you have to pay out of your own pocket. Fortunately, the Affordable Care Act required that all Medicare Advantage plans have limits as of 2011, but even with that requirement, the limits can still be up to $6,700 – and over 50 percent of the plans still have limits of at least $3,500 or more.

Most Medigap plans provide first-dollar coverage, picking up where Medicare Parts A and B leave off.  For most services, Medicare A and B pay 80 percent of the cost, leaving the patient with a bill for the remaining 20 percent – that’s the part that Medigap plans cover.  But Medigap plans K and L only pay a portion of the enrollees’ costs until an annual out-of-pocket maximum is met (2015 edit: for 2015, the out-of-pocket maximums are $4,940 for plan K, and $2,470 for plan L).  After those out-of-pocket maximums are met, plans K and L pay 100 percent of the enrollee’s excess Medicare costs for the rest of the year.

If you hear anyone say that Medicare beneficiaries do not pay their fair share, just tell them about the Part B premium, the Part B Deductible, the Medicare Part D deductible, the hospital deductible, co-pays and coinsurance, etc. Medicare beneficiaries pay a great deal for the benefits they receive.

There is good news on the premium front, however. The Part B premium that everyone must pay decreased in 2012 because of health reform (2015 edit: in 2015, the Part B premium is $104.90 per month for most enrollees – it was $115.40 in 2011; and healthcare reform has lowered the Part B deductible as well: It is $147 in 2015, while it was $162 in 2011).

The doctor’s in, but is your doctor IN?

Even if the sign says, “The doctor’s in,” you need to double check, because even if the doctor’s in, she may have opted out of Medicare.

The term “Medicare assignment” may mean little to you until you find out that a new doctor you are seeing does not accept what Medicare pays for a given service. A “non-participating” doctor who does not accept assignment can charge up to 115 percent of the Medicare approved amount. Medicare will still pay for the services this doctor provides even if he does not accept assignment, but you are stuck with the difference.

You may also not have heard much about doctors opting out of the Medicare program. It’s different from just not accepting assignment. If your doctor formally “opts out,” she must stay out for two years and you must pay full price for her services.

That 30-minute doctor visit you had last week? It’s a shock to find out that it is going to cost you $250. Your doctor opted out and didn’t tell you – and you didn’t know to ask. Doctors are actually supposed to sign “private contracts” with patients if they opt out that make it clear the patient must pay the full amount of the service, but not all providers follow through.

How many doctors have opted out of Medicare? There are plenty of scary stories about the number, but even the Centers for Medicare and Medicaid (CMS) do not know. They recently did a study after reports that half of Texas doctors might opt out of the program.

Their conclusion: “We were unable to answer the issue questions in our proposed study on opted-out physicians because no centralized data exist and the data that we received from MACs and legacy carriers were insufficient or not provided at all. Specifically, we cannot determine the characteristics of physicians who opt out of Medicare, the trend in the number of opted-out physicians, or why physicians choose to opt out of Medicare.”

2015 Edit: According to a 2014 Kaiser Family Foundation report, less than one percent of physicians (who provide services that would otherwise be covered by Medicare) have fully opted out of Medicare.  In contrast, 96 percent are participating providers.

So do your homework

First, find out if your doctor “participates” in Medicare and takes assignment. Then, ask if the doctor has specifically “opted out” of Medicare. If she has opted out, you may want to find another doctor unless you can pay cash for the services.

Then – as with any insurance plan – you need to know your numbers. If you’re about to enroll in Medicare Advantage or Medigap, have your carrier clearly spell out your out-of-pocket costs – deductibles, co-pays and coinsurance – and your coverage limits.

And don’t hesitate to talk to Medicare. If there’s any good news here, it’s that once you make it through the recorded prompts, Medicare customer service representatives at 1-800-633-4227 could not be nicer or more helpful. Compared to many private insurance customer reps, the Medicare people seem cheerful and pleased to talk to you.