Search this site:

Federal Consumer Information Center Medicare Questions and Federal Consumer Information Center: Medicare - Questions and Answers

Section 1: The Original Medicare Plan (continued)

Q: What are my out-of-pocket costs in the Original Medicare Plan?

A: The Original Medicare Plan pays for much of your health care, but not all of it. Your out- of- pocket costs for health care will include your monthly Part B premium. In addition, when you get health care services, you will also have to pay deductibles and coinsurance. Generally, you will pay for your outpatient prescription drugs. You also pay for routine physicals, custodial care, most dental care, dentures, routine foot care, hearing aids, and routine eye care. Physical therapy and occupational therapy services, except for those you get in hospital outpatient departments, have yearly limits on coverage. The Original Medicare Plan does pay for some preventive care, but not all of it.

Q: What do my out-of- pocket costs depend on in the Original Medicare Plan?

A: Your out- of- pocket costs depend on:

  • Whether your doctor accepts assignment.
  • How often you need health care.
  • What type of health care you need.

    If you choose another Medicare health plan or purchase a Supplemental Insurance Policy, your out- of- pocket costs may also depend on:

  • Which Medicare health plan you choose.
  • What extra benefits are covered by the plan.
  • What your Supplemental Health Insurance

Q: What is Assignment?

A: In the Original Medicare Plan, doctors and other providers who accept assignment accept the amount Medicare approves for a particular service or supply as payment in full. (You are still responsible for any coinsurance amount.) Doctors who don’t accept assignment can require you to pay the full amount of the bill at the time of service. Medicare will then reimburse you for its share of the bill. Always ask your doctors and medical suppliers whether they accept assignment of Medicare claims. That could mean savings for you.

In certain situations, all doctors and medical suppliers are required to accept assignment. For instance, all doctors and qualified laboratories must accept assignment for clinical laboratory services covered by Medicare. Doctors also must accept assignment if you have a low- income and Medicaid pays your Medicare coinsurance. Doctors and other health care providers who don’t accept assignment may not charge more than 15% over Medicare’s approved payment amount (the limiting charge). The limiting charge does not apply to services you get from doctors with whom you have a private contract, or for certain items and services, such as durable medical equipment, ambulance services, vaccinations, and anti-nausea drugs that are covered by Medicare. Call your Medicare Carrier* with questions.

* You can find phone numbers for your area in your copy of Medicare & You or on the Internet at under Important Contacts.

For example, assume that your $100 Part B deductible has been paid for the year. You receive a medical service and the Medicareapproved payment amount for the service is $100. If your doctor accepts assignment, the most you would pay is $20. If your doctor does not accept assignment, the most you would pay is $33.25 after Medicare pays its share of the bill. (Note: The approved amount is reduced by 5% if assignment is not accepted.)

Q: What is Medicaid?

A: Medicaid is a joint Federal and State program that provides payment for medical costs for certain individuals who have low incomes and limited assets. Coverage and eligibility vary from State to State, but most of your health care costs are covered if you qualify for both Medicare and Medicaid. Medicaid recipients may also receive benefits such as nursing home care and outpatient prescription drugs.

Q: How can Medicaid help low-income Medicare beneficiaries?

A: Medicaid has programs that pay some or all of Medicare’s premiums and may also pay Medicare deductibles and coinsurance for certain persons who are older or disabled, have low incomes and limited assets. You must have Part A (Hospital Insurance). If you are not sure if you have Part A, look on your Medicare card (red, white, and blue card). It will show “Hospital Insurance (Part A)” on the lower left corner of the card. You can also call your local Social Security office, or call them at 1-800-772-1213.

If you have Part A, your income is limited (see below) and your bank accounts, stocks, bonds, or other resources are not more than $4,000 for an individual, or $6,000 for a couple, you may qualify for assistance as a Qualified Medicare Beneficiary (QMB), Specified Low- Income Medicare Beneficiary (SLMB), or Qualifying Individual (QI).

1999 Monthly Income Limit*

  Individual Couple Benefit - Pays Medicare’s...
QMB $707 $942 Premiums, deductibles, and coinsurance
SLMB $844 $1,126 Part B premium
QI- 1 $947 $1,265 Part B premium
QI- 2 $1,222 $1,633 Part of the Part B premium

*Slightly higher amounts are allowed in Alaska and Hawaii. Monthly income limits will change slightly in 2000.

If you think you may qualify, contact your State, county, or local medical assistance office - not a Federal office.

Search this site:

Get the Savvy Consumer Newsletter! (FREE)