Cost of Medicare

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When you consider the cost for Medicare, there are three main areas to understand.

  1. The premium for Part A and Part B.
  2. The monthly premium that you are going to pay for a Medicare supplement or Medicare Advantage Plan.
  3. How much do Medicare providers charge and how are they paid? What is the fee schedule for their services?

Is Medicare Free?

Is Arizona Medicare FreeMedicare Part A is free, if you have worked and paid Medicare taxes into social security for at least 40 quarters.

Consequently, Part A is referred to as premium free Part A. If you are not eligible for premium free Part A, you may be able to buy it. The conditions for doing so are found on the Medicare website at www.medicare.gov.

While Medicare Part A is free in most cases, Part B requires a monthly premium.

Most people will pay the standard premium amount which is deducted each month off the top of their social security check. If you are on Part B, but are not receiving social security benefits, then you will be billed by the government for the monthly Part B amount.

If, however, your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you may pay more.

With both Part A and Part B, if you don’t sign up when first eligible, you may have to pay a late enrollment penalty and a higher premium when you enroll later. Consequently, your Medicare prices will be higher at that point.

What are Medicare Prices for Medicare Supplements and Medicare Advantage Plans?

These prices vary greatly from plan-to-plan.

Medicare supplement prices differ based on the coverage you choose and the company you choose. Medicare Advantage (MA) plans may be “free” in that some companies do not charge a monthly premium to enroll in their plan. Often people refer to these plans as “free Medicare plans”.

While there is sometimes no monthly premium with Medicare Advantage plans, there are co-pays and deductibles. Consequently, there are out of pocket expenses with Medicare Advantage plans that you may not incur with Medicare supplements.

On the other hand, Medicare supplements generally have a higher premium attached to them so your charges are higher upfront with those types of plans.

What is the Medicare Provider Fee Schedule?

Most doctors who accept Medicare accept “assignment.”

Assignment means that your doctor, provider, or supplier has signed an agreement with Medicare (or is required by law) to accept the Medicare-approved amount as full payment for covered services. There are several advantages to you if your doctor accepts assignment.

  1. Your out of pocket costs may be less.
  2. They agree to only charge you the Medicare deductible and co-insurance amount and usually wait for Medicare to pay its share.
  3. They have to send your claim to Medicare directly. They can’t charge you for submitting the claim.

Written by Medicare Expert Andy Lockridge

Here is what happens if your doctor, provider, or supplier does not accept Medicare assignment:

  • They are supposed to submit a claim to Medicare when they give you Medicare covered services. In some cases, you may have to pay the entire charge at the time of service, and then submit your claim to Medicare to be paid back.
  • They may charge you more than the Medicare-approved amount, but there is a limit called the “limiting charge”. They can only charge you up to 15% over the Medicare approved amount. This amount is also sometimes called the “Part B excess.”

How much your out of pocket expenses will be depends upon the Medicare supplement or Medicare Advantage plan that you have. Be sure to read the plan coverage details so you are aware of what your out of pocket costs are in each situation.