Tip 210- Nobody Pays Retail

Recently I wrote about when to sign up for Medicare if you work past age 65.

In the wake of that Tip, I was asked if providers are paid better by our employer sponsored group insurance plans or individually owned Medicare Supplement policies.

Let’s say the Medicare approved rate for a doctor office visit is $60. Medicare pays 80% or $48. The Supplemental Plan pays the remaining 20% or $12. If the doctor’s cost is $100, he/she writes off the $40 difference.

On the commercial or group insurance side, the same Medicare approved rates are usually the jumping off point for negotiated reimbursements that are +/- 40% higher. The actual additional amounts are closely guarded.

So, in the case of our office visit, the reimbursement might be 40% higher than the $60 allowed by Medicare, or $84.

You won’t find too many providers who are happy with Medicare or commercial insurers. You also won’t find too many consumers who are happy with their premiums.