Medicare Coverage Types and Benefits

What Does Part B Cover, and What Can the Patient Owe?

• Part B generally covers physician services, outpatient care, qualifying home health care, durable medical equipment, and many preventive services.
• Durable medical equipment includes qualifying items such as walkers or wheelchairs for use in the home.
• Prevention can be covered before a person becomes ill. Part B is not limited to treatment after symptoms appear.
• A Part B classification does not by itself tell you the patient’s exact bill. The service’s coverage conditions and applicable cost sharing still matter.
• A doctor’s professional service can fall under Part B while the hospital’s inpatient facility care falls under Part A.

Cost sharing is the patient's share of covered expenses. A deductible is the amount they must pay before specified benefits apply; coinsurance is their stated percentage of a covered cost.

• The Medicare-approved amount is the amount Medicare recognizes for a covered service. It can differ from the provider's bill.
• For most covered physician services, the patient generally pays 20% of that approved amount after the Part B deductible. Different rules can apply to specified services, including many preventive services.
• Accepting assignment means accepting the Medicare-approved amount as full payment for the covered service, subject to the patient's deductible and coinsurance. Use the approved amount rather than adding the excess of the billed charge.

Example: A physician accepts assignment. The deductible is met, there is no supplement, and the Medicare-approved amount is $250 at 20% coinsurance.

1. Identify the calculation base: the $250 approved amount, even if the submitted bill was higher.
2. Find the patient's share: $250 × 20% = $50.

How Does Part D Drug Coverage Affect Total Cost?

• Part D generally helps with outpatient prescription drugs. A person can obtain it through a stand-alone Medicare drug plan or a Medicare Advantage plan that includes drug coverage.
• Parts A and B alone do not establish Part D enrollment. Medigap is private coverage that supplements eligible costs in Original Medicare, Parts A and B. A current Medigap Plan G policy also does not establish drug-plan enrollment.
• A formulary is a plan’s list of covered drugs. A tier groups drugs by their cost-sharing level. Check the exact medication, tier, pharmacy terms, and any approval requirements.

The premium is the price paid for coverage. A copayment, or copay, is a stated amount paid for a covered service or prescription.

• Compare total personal cost, including premiums, deductibles, and expected prescription payments. A low premium can be offset by higher costs at the pharmacy.
• If the stated comparison assumes a drug is not covered, include the person’s cash cost for that drug. Do not treat “not covered” as “free.”

Example: A plan has a $15 monthly premium and a $20 copay for one monthly prescription, with no deductible or other cost.

1. Add the monthly costs: $15 + $20 = $35.
2. Find the 12-month cost: $35 × 12 = $420.

Use the plan's actual terms for a real comparison.

Exam Tip: Gotchas

• Part C and Part D are different. A Medicare Advantage plan may include Part D; verify that it does.
• The cheapest premium does not necessarily produce the lowest total yearly cost.

Which Medicare Advantage Plan Meets the Person's Needs?

• Medicare Advantage plans provide Part A and Part B benefits through approved private coverage. Drug benefits and extras such as dental benefits can vary.
• Check whether a desired specialist participates in the particular plan and whether a needed medication is covered at an affordable cost.
• Apply all stated needs in a comparison. Keeping a doctor does not solve an uncovered-drug problem; covering the drug does not solve an unaffordable copayment.
• Use the current Evidence of Coverage, which describes the plan’s benefits and cost-sharing terms. An old brochure, another plan’s document, or one processed claim does not replace those terms.
• An Annual Notice of Change summarizes changes for the stated coming plan year. Match the document to the coverage period being discussed.

How Do Original Medicare Provider Categories Differ?

• First identify whether the person has Original Medicare, Parts A and B, or Medicare Advantage. For Advantage, identify the specific plan.

• Medicare can still pay for qualifying emergency services from an opted-out provider.
• Participation in a Medicare Advantage network does not establish the physician’s assignment status for an Original Medicare patient.

How Do Provider Access and Service Approval Differ?

• For a proposed Advantage switch, verify the desired provider’s participation for the coverage start date. A current listing may not resolve a known future contract change.
• Network status concerns provider participation. Prior authorization concerns approval of a service when required. An in-network provider or a physician’s order does not automatically satisfy the plan’s authorization requirement.
• A referral directs the patient to another provider, such as a specialist. Original Medicare generally does not require a specialist referral or prior authorization, but service-specific rules can apply. Medicare Advantage plans may require either under their terms.
• For recurring specialist visits, compare provider access, referral or approval rules, and the member’s visit cost. Unrelated dental benefits or hospital charges do not answer those questions.

Exam Tip: Gotchas

• A provider’s network contract and approval of a particular service are separate facts.
• Medicare Advantage delivers Medicare benefits; Medigap helps with eligible Original Medicare costs.

What Should You Check on Exam Day?

• Which Medicare part or plan supplies the benefit?
• Does the record establish current drug coverage?
• Are the provider, medicine, approvals, and expected costs acceptable under the same current plan?
• Does the information apply to the intended service date?