Excess charges occur under Medicare Part B, which covers physicians’ fees.
In simpler terms, excess charges refers to the difference between what Medicare approves for a service and what the provider actually charges.
These charges may occur when a healthcare provider does not accept the Medicare assignment, and instead bills the patient directly. These providers are called non-participating providers.
When you get care from a non-participating provider, you may need to pay the physicians’ fee up front—or a part of it—and then submit the bill to Medicare for reimbursement.
For example: If Medicare Part B pays $509.19 for a pacemaker procedure but your doctor charges $650, the $141.81 difference will fall under excess charges.
How Common are Excess Charges?
Not very. About 98% of providers accept the standard Medicare reimbursement rate—even in states that allow excess charges. They do not bill patients additionally.
Of the remaining 40% of providers that do charge more than the Medicare reimbursement rate, about 40% of them are mental health care providers.
What States Allow Excess Medicare Charges?
Not every state allows excess Medicare charges. As of late 2023, only nine states allow physicians to bill patients for excess charges not paid under Medicare Part B:
- New York
- Rhode Island
If you’re in any of these states, and your physician’s fees are greater than the official Medicare reimbursement rate, you may be responsible for the difference, depending on what additional private Medicare-related plan you have in place.
Contesting a Charge
If you receive a bill with excess charges, you have the right to contest it. You can ask your healthcare provider to verify if they accept Medicare assignment.
Doctors who accept Medicare assignments should never charge you extra. Anytime you do receive a bill with excess charges be sure to reach out to Medicare or your State Health Insurance Assistance Program (SHIP) for assistance.
Go to medicare.gov for further information on how to contest a charge.
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Cost-Effective Plans in States Allowing Excess Charges
In states allowing excess charges, having coverage like Medi-Share 65+ or Plan G can save you a good deal of money.
- Medi-Share 65+. pays for all excess charges under Medicare Part B, after you pay the first $500 per household per year. In fact, once you have paid the first $500 per household per year in Medicare Part A and Part B costs, the Medi-Share 65+ health sharing plan pays all additional costs approved but not paid by Medicare Parts A and B, with a few limited exceptions.
- Medigap Plan G. Provides robust coverage for excess charges, making it a cost-effective choice in states where such charges are permitted. Your only Part A and B out-of-pocket cost with Plan G is your Part B deductible, which is $240 per year per individual, as of 2024. Other than that, Medigap Plan G pays all deductibles, co-insurance, and copays under Medicare Parts A and B—including any physicians’ excess charges.
Visit MediGapAdvisors.com for a comprehensive, side by side comparison of these two options.
Medigap Plan F also pays all excess charges. In fact, it pays all out-of-pocket costs under Medigap Part A and Part B, including the $240 Medicare Part B deductible. With Plan F, as long as you pay your premiums, you will pay nothing out of pocket for Medicare Part A and Part B services.
However, Plan F is no longer available to new Medicare enrollees.
I’m in a State That Doesn’t Allow Excess Charges. What Should I do?
Although Plan G is more popular overall, Plan N is an excellent choice if you live in a state with no excess charges.
- Lower Premiums: Plan N generally comes with slightly lower premiums compared to Plan G or Medi-Share 65+.
- Comprehensive Coverage: While it may have slightly more cost-sharing than Plan G, Plan N still provides comprehensive coverage for essential healthcare services under Part A and Part B.
Medi-Share 65+ Health Sharing vs. Medigap
The Medi-Share 65+ health sharing plan isn’t health insurance.
Instead, it’s a more affordable and competitive non-insurance alternative to Medigap Plan G and Plan N.
With health sharing, you don’t use a for-profit insurance company. Health sharing ministries are non-profit associations of like-minded, health-conscious individuals who agree to help share one another’s medical costs.
At $99 per month for those ages 65-74 and $150 per month for those age 75 and up, Medi-Share 65+ is typically available at a much lower monthly cost than these two comprehensive Medigap plans.
Medi-Share 65+ has several advantages:
- Full Coverage for Excess Charges. Medi-Share 65+ provides comprehensive coverage for excess charges.
- Predictable Out-of-Pocket Costs. With Medi-Share 65+, you have a clear understanding of your healthcare costs. All your out-of-pocket costs under Medicare Parts A and B are shared by your fellow plan members, except for an annual household portion of $500. In other words, you pay the first $500 in Part A and Part B deductibles, co-insurance, copays, and excess charges. Medi-Share 65+ shares 100% for these costs above that amount. This predictability helps in planning and budgeting for medical expenses without worrying about surprise fees.
- Extensive Benefits. The plan offers a wide range of benefits, sharing costs for various medical services, hospital stays, and doctor visits. Plan members also have access to a powerful discount program for prescription drugs, 24/7 access to telehealth services at a zero-copay, and other important benefits.
- Choose Your Doctor. Unlike Medicare Advantage plans, Medi-Share 65+ doesn’t restrict you to a narrow provider network. Both Medi-Sare 65+ and Medigap allow you much more freedom to choose your own provider.
Note: Since neither Medigap plans nor Medi-Share 65+ include prescription drug coverage, you should consider purchasing a separate, stand-alone Medicare Part D plan to work alongside whichever one you select.
Medi-Share is a faith-based, expressly Christian organization. On enrollment, Medi-Share asks that all new members agree to live healthy lifestyles according to Biblical principles.
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Navigating the maze of Medicare and private plans can be daunting. It’s pretty complex, and there’s a lot to keep track of.
Fortunately, you don’t have to do it alone. In fact, we can make things downright easy.
If you need to make a change, we can help get you in a plan that better suits your needs. Make an appointment with your Personal Benefits Manager to get FREE personalized guidance based on your specific situation.
Here are few more blog for further reading: What To Do If Medicare Denies Your Prescription | The Less Expensive Medicare Supplement Alternative: Medi-Share 65+ | MediShare 65+ Health Sharing Plan vs. Medigap Plan G
Misty Berryman is one of your Personal Benefits Managers at Medigap Advisors. She loves working for Medigap Advisors for many reasons, including being part of the solution to one of life’s most important healthcare challenges: choosing the right Medicare plan. Read more about Misty on her Bio page.