Medicare introduces seniors to a whole slew of new terms.
Let's add one to the list.
A very important term.
What is it, how does it work, and maybe most importantly, is there a Medicare plan that will take care of it.
It's good to understand how Excess works as we go forward since it will become more important (and costly) with each year.
Let's jump right into it. First, what is it?
Here's the simple answer.
The 15% is Excess.
A little more background.
Medicare has its own list of contracted providers...similar to a PPO.
These doctors agree to certain requirements from Medicare (or CMS really).
The most important of these rules deals with how much they can charge.
For any given medical procedure, there's an agreed upon reimbursement rate. A schedule of allowed charges.
For example, a doctor visit with a dermatologist (just the consultation itself), Medicare may list a rate of $80 reimbursement back to the doctor in a given area.
The doctor must agree to a list of reimbursements based on different health care codes to be a Medicare doctor.
If not, Medicare will not reimburse the doctor for those services to Medicare members.
Pretty straight forward.
There's a catch (as always)!
Some doctors accept the Medicare rate while others choose to charge up to the
15% additional amount.
If the allowed Medicare rate for an office visit is $100, a doctor can charge up to $115 and still keep their coveted Medicare provider status.
If you only have Medicare (and not a supplement), you will have to pay this 15% in addition to the core benefits of Medicare.
Here's the deal...there's no cap to the 15%
15% on $100 is manageable to most people.
15% on $4000 is less so and 15% on $20K will pose issues to many seniors.
That 15% can continue indefinitely.
Your surgeon might accept Medicare's rates but what about the supporting staff or anesthesiologist? (from actual client experiences!!)
Again, the 15% is not curtailed by your core Part B Medicare coverage.
That's just the start of why Medicare Excess is an important consideration.
The importance will only grow with time.
Get ready for Excess playing a much more important role.
Excess is going to get much more important.
A quick lay of the land.
There's tremendous pressure on Medicare to contain costs as its financial situation worsens.
The biggest bat Medicare can take to its costs is the reimbursement to doctors and hospitals.
It's been an ongoing battle.
Look at what they're facing?:
Each year, Congress is faced with an existing mandate to roll back reimbursement
to doctors and each year, out of political pressure, they choose to delay for
another year. Understandably!
The issue is that this compounds over time and just shifts the need to the future.
The rate of inflation for doctor reimbursement is already extremely low.
Add to that a slowing birthrate (less workers to support seniors), and it's going to get "interesting".
Why does this matter?
Expect more pressure from Medicare on doctor's reimbursements.
Doctors are already under assault from falling reimbursements due to the ACA
It probably won't be unheard of to see most doctors charge excess within 5-10 years.
Alright...we established why Excess is important and how it will grow in importance.
What can we do about it?
One note..excess isn't an issue with Advantage plans since you have to
remain in network and they by definition, agree to medicare rates. See
our big review on the
trade-off between Advantage and Supplements.
Without fail, the G plan is the plan of choice and for good reason.
Aside from the comprehensive nature of the G plan in regards to the major holes of Medicare (deductibles, 20% coinsurance, etc), it's the only supplement plan that addresses...
It's the only true supplement plan (as oppose to Advantage plans which force networks) that covers Excess. We have a massive review on the G medigap plan.
By definition, a doctor must accept Medicare if they participate in an Advantage plan.
We're happy to walk through any questions on how the plans work and differ from each other.
Really...figuring out the excess piece and Part D (for medication) rounds out the decision making.
Finally, let us help you! There's no cost for our services and we have helped 1000's of California Seniors find the best supplement plan values.
Check out our Google Reviews!