From a Medicare Broker
As a Medicare broker for 23 years, I have seen many Medicare rules that do not make any sense, yet these anomalies continue with no effective change in site.
The most critical one in my opinion is that Medicare is the only insurance in the US that does not have a maximum out-of-pocket. All other health insurance policies have a deductible, have copays or a percentage and have a maximum out-of-pocket. Original Medicare is an 80/20 plan with a Part A deductible (Hospitalization) and a separate Part B (all outpatient services) deductible. WITH NO MAXIMUM OUT-OF-POCKET.
Meaning you, the Medicare recipient is on the hook for 20% of the bill with no maximum. Said another way; if you had a $350,000 hospital bill, you’d be responsible for $70,000 or 20% of that bill. Having no maximum out-of-pocket leave seniors on the hook for the 20% Medicare does not pay. Seniors are not told this when they apply for Medicare and they should be due to the potential financial disaster awaiting them when something serious happens, medically.
There is another part of Medicare called assignment of benefits. If the doctor or facility accepts assignment of benefits, they will Medicare directly and agree to write off the balance that Medicare did not accept as standard charges for that geographic location. Conversely, if the doctor or facility does not accept assignment of benefits, they can bill you the portion of the bill that Medicare disallowed. This applies to Original Medicare only and for seniors that do not have a supplement plan or an MAPD plan but have Original Medicare only. That represents about 8% of all Medicare beneficiaries or about 4.6 million seniors. Many do not understand the potential monetary risk remain uninformed of the potential fiscal disaster their decision may cause. Said another way; if your hospital bill was $350,000 and Medicare reduced it to $270,000, the Medicare beneficiary would be responsible for 20% of the $270,000 or $54,000 and the difference between $350,000 and $270,000 or $84,000.
With all the advertisements for MAPD (Medicare Advantage Prescription Drugs) plans, none mention the lack of a maximum out-of-pocket with Original Medicare. Nor is assignment of benefits discussed although it is not an issue when you have an MAPD plan. It is a serious situation if you have only Original Medicare with no supplement plan.
One of the many benefits of either a supplement or an MAPD plan is the lack of this exposure. The MAPD plans have fixed costs for most services and a Maximum-out-of-pocket, and the supplement plans pick up what Medicare does not pay including the 15% that Medicare disallows. These MAPD plans usually do not have a monthly premium, so it is affordable, and the plan spells out all their charges for a variety of medical services. For the most part, you are locked in their network of doctors and hospitals. Usually this is not an issue but needs to be mentioned.
The supplemental plans are designed by the government, so each plan has their own benefits, and some have costs while other plans do not. These plans are designated by an alpha code, like plan F, G, N or other codes. While the plan benefits based on alpha code are the same, each insurance company can charge what they want for the plan. So, a plan G could have different premiums based on the carrier you choose. Typically, once you choose your plan you cannot change that plan unless you live in one of the 6 states that have the birthday rule. Nevada is one of those states so the month of and the month after your birthday you can change Medicare supplement plans to the same or lower plan without having to prove you are insurable. As an example, your birthday month is March, you can change your supplement plan without going through underwriting in February for a March or April effective date with guaranteed issue.
Another concern is that the government publishes an annual Medicare and You booklet. We just got ours for 2026. The issue is that Congress has not decided yet what the cost for Medicare Part B will be for 2026. I started selling Medicare in 2003 where the Part B monthly premium was only $55.00. Today it is $185.00 monthly. Seniors on fixed incomes are having trouble affording that premium. It will increase for 2026 when Congress gets to vote on it usually in mid-December. The problem I see is Congress is not on Medicare and seems care less about the cost. They look at the Medicare costs and increase the Part B monthly premium each year without regard for those seniors who cannot afford that premium. If Congress were on both Medicare and Social Security both plans would be in better fiscal shape as self-preservation is alive and well in Congress.
Consider if you are married you pay double that amount for you and your spouse. That’s $370.00 per month for a couple and many cannot afford it. I’m not sure what the answer is but with the monthly premium increasing annually, many seniors will not be able to pay that bill.
There is also a surcharge for those making more than what the government decides for Part B and Part D. This surcharge is based on your annual income so if you make a lot of money, you pay a surcharge for Parts B & D, and it can amount to a significant amount based on your income. The government looks at your annual tax return two years ago and establishes the surcharge or Part B & D based on that income. Each year they increase the surcharge amount and if your income also increases, your monthly Part B & D premiums will do the same.
As you know, there are many issues with Medicare that are not being addressed by Congress, and they need to be addressed. I hope many seniors read this blog and call their Congress person and tell them to address these serious issues.
If we don’t call our Congress people, these costs will continue to rise annually.
I hope this information is useful and if anyone has questions, please contact me via phone or email and I will respond quickly.
Also, you may want to take a look at Medicare 2025 Information.
The Barend Agency Inc.
Len Barend, Broker
Cell:702-250-2200