Consider the following:
- More than 75 percent of people age 65 and older have at least one chronic condition, meaning the condition persists or worsens over time.
- People over 65 are twice as likely to be admitted to a hospital than those between 45 and 64.
- Seniors make up less than 15 percent of America’s population but consume more than one-third of all prescription drugs.
In 2017, the federal government spent more than $700 billion on Medicare benefits. That amounts to about 15 percent of the federal budget and makes it one the highest individual allotments for the budget as a whole. Some of these costs are recouped through individuals paying Medicare bills like monthly premiums, coinsurance costs, and other general health care costs. And given that there’s this much money changing hands over the course of a year, there are bound to be more than a couple hiccups along the way regarding what gets billed and for how much.
Here, we’ll discuss what exactly Medicare covers, what you can be billed for through Medicare, and what you can do if there is a billing issue.
What Does Medicare Cover?
Medicare is split into four parts—A through D. Each section covers different healthcare services. These include:
Inpatient hospital stays (including food, medication needed during your visit, general nursing care, and more), part-time home health care, hospice care, and skilled nursing facility care are covered under Part A.
This part of Medicare covers outpatient visits to doctors and second opinions, ambulance services, rehab services, durable medical equipment, and more.
This is also known as a Medicare Advantage plan, and it’s purchased through a private insurer. It covers everything that parts A and B of Medicare covers, but it also typically includes additional coverage like dental, vision, hearing, and prescription.
This is where prescription drugs are covered. Each prescription plan is purchased through a private provider, and they are usually offered in tiered plans, meaning the more expensive the plan, the more drugs that are covered.
What’s Covered in Medicare Billing?
Now that we know everything Medicare covers, it’s time to understand what Medicare will bill for.
Each section comes with varying costs, and it all depends on which sections of Medicare you choose to enroll in.
Medicare services are covered with monthly premiums, coinsurance payments, and copayments. Each section comes with varying costs, and it all depends on which sections of Medicare you choose to enroll in. These costs can range from a couple hundred dollars to nothing at all. All-in-all, the average Medicare recipient in “good health” spends about $7,500 a year (as of a 2017 report), or about $625 a month, in out-of-pocket costs.
Let’s go over what these costs can come to for each section.
There is usually no monthly premium for Part A services as long as you paid taxes into Medicare for long enough. But this doesn’t mean that every part of your hospital stays is covered.
For each benefit period—the time from when you enter a hospital until the time you haven’t been in a hospital for at least 60 days in a row—you have a $1,340 deductible, meaning you pay everything for your care up until you’ve paid this. (If you don’t use the services, you don’t have to pay.)
After this, there are $0 coinsurance payments for the first 60 days you’re in the hospital. For days 61-90, you have a $335 coinsurance cost per day. For every day after 90 days, there’s a $670 coinsurance cost until you’ve used up your lifetime reserve days (you get 60 of these across your time enrolled in Medicare). After you’ve used all of these, you’re responsible for all of the hospital costs.
Part B coverage comes with a monthly premium. According to the 2019 Medicare plan, most people (those who make less than $85,000, or $170,000 as a couple) will pay $135.50 per month. This price can be lowered by a couple dollars each month if you’re already collecting on Social Security. The rates for your monthly premium cost raises as your income does. For instance, if you make between $85,001 and $107,000, your premium will raise to $189.60 per month.
You also have a $185 deductible you must meet every year before Medicare starts covering the rest of your Part B services. After this deductible is met, Medicare will cover 80 percent of costs for items such as durable medical equipment and procedures, and you will be responsible for the other 20 percent. This is where a lot of billing issues can come into play. Insurance companies will debate how much they should or shouldn’t cover for durable medical equipment and procedures with the basis of them being “medically necessary.”
Part C (Medicare Advantage)
The cost of your Medicare Advantage plan is up to which plan you choose from a private insurer. The coverage cost, as well as what coverage the plan offers, should play a role when you’re choosing a plan.
For Medicare Advantage, you will have a monthly premium—just like you would for Part B— that covers all of your services, including hospital stays, dental visits, and prescriptions. That premium may be cheaper than the Part B premium, depending on what plan you get. However, you should keep in mind that you have to pay a monthly premium for Part B (which goes to the government) as well as your Medicare Advantage premium to get your services.
Medicare Advantage plans also typically have copayment schedules for each service you use, meaning there’s a flat rate you need to pay for each visit to your primary care physician, dentist, eye doctor, specialist, and so forth. They will also have coinsurance schedules for various services on their plan, too, but how much of a service or piece of equipment they will cover depends on your plan.
Your prescription drug costs depend on what coverage you get from a private insurer. They can range from zero dollars per month up to several hundred dollars, but the average price is about $34. That number is expected to drop by a dollar or two in 2019.
These plans typically have a deductible you need to reach before the provider helps pay for the remaining prescription costs for the year. This deductible cannot be higher than $405, as of 2018. As of 2019, your coverage limit is $3,820. If you surpass that amount, your prescriptions will start costing more until you reach $5,100 spent for the whole year. (The gap between your coverage limit and out-of-pocket max is known as the “donut hole.”) Then, you prescription costs would dramatically decrease again as your prescription coverage would be marked as “catastrophic coverage.”
How Do I Pay My Premium?
For Part B, your premium will be taken out of your Social Security check once you start collecting on Social Security. Before that time, or if you don’t qualify for Social Security, you can pay your Part B premium online using a debit card, credit card, or a connected bank account. You can also send a check or money order to the Medicare Premium Collections Center.
Medicare Advantage premiums—and billing in general with these plans—are paid to the provider. Contact them with any questions you have. If you have Part C, your Part B premium will be deducted from your monthly Social Security check. Your Part D premiums will be paid to the provider, too.
Medicare Advantage premiums—and billing in general with these plans—are paid to the provider.
What To Do If There Is A Medicare Billing Error, Or You Suspect One Occurred
Billions of dollars move around the government, hospitals, and the population’s collective pockets every year for Medicare coverage. Billing issues can arise from all this money moving hands. In fact, a 2017 report said that there were about $36 billion worth of billing errors that year.
Some of these billing issues can stem from:
- Medical coding errors
- Instances where it’s determined your services aren’t covered fully under Medicare
- Your service is deemed medically unnecessary
If a billing error with Medicare occurs, there are a few tips you should follow to make sure that your issues are corrected. These tips are as follows:
It Could Be An Accident
Accidents happen—even with billion-dollar government programs. Contact your Medicare provider and the medical provider of the services to make sure there wasn’t a mistake along the way with the types of services rendered and what needed to be billed for. Sometimes the mistake is a simple error by a coder who entered the wrong billing code—a small mistake just needs to be fixed. There are people on all ends of the healthcare industry who are there to make sure billing issues are corrected.
Make Sure You’re Not Being Scammed
On the other hand, an “accident” could disguise itself as fraud. It’s estimated that Medicare lost about $60 billion—potentially more—on fraud in 2017. Fraudulent Medicare activities include everything from someone stealing your ID to use it to file Medicare reimbursement claims, to a provider saying you need equipment and services you don’t actually need just to make more money off you. If you suspect Medicare fraud has occurred, you can report it to the Office of the Inspector General.
Check With Social Security
Contact your local Social Security office and make sure there are no issues on their end that may have resulted in an erroneous or missed bill, especially when it comes to premiums that are automatically deducted. You can also report Medicare fraud to the Social Security Administration.
Fill Out The Right Form
Medicare requires many forms for various reasons of reimbursement. These forms range from proving medical necessity for various apparatuses, to approving who will be the beneficiary for a loved one. Some of these forms are for hospitals and medical providers to fill out, others are for you to handle. Any party can make a mistake in this process, including filling out the wrong form or filling out the correct form incorrectly. For your part, make sure that you’ve filled out all of the proper paperwork that allows your equipment and treatments to be covered by Medicare.
Know Who Is Billing You
Sometimes the hospital takes on the responsibility of the claim and Medicare will pay the provider for 80 percent of Part B services and the hospital will then bill you for the rest. In other cases, the hospital may not take responsibility for the claim, and you will need to pay Medicare directly for the services that aren’t covered. You may also have to take on responsibility for the entire payment, and Medicare will reimburse you. In this case in particular, you want to make sure all the billing is precise.
Once you’ve established the reason for the billing error, it’s time to correct it.
If the issue is with the hospital or a medical provider, call them and ask to speak with the person who handles insurance. They can help assist you in correcting the billing issue. Those with Original Medicare (parts A and B) can call 1-800-MEDICARE with any billing issues. If the error is with a private insurer, they should have a claims issue hotline you can call.
If you have any questions regarding Medicare billing, contact your local Social Security Administration office, your private Medicare provider, or the medical office that administered the service. There are a lot of parties involved in every Medicare transaction, so be sure to exhaust all of your resources to make sure everyone is on the same page.