What is my annual 2023 Medicare Part B deductible I need to pay before Medicare Part B coverage kicks in? I don’t have a Medicare Advantage plan, Medigap or Medicare Supplement.
Like Original Medicare Part A, you must pay an annual deductible before Medicare Part B benefits kick in. For 2023, the deductible is $226. Unlike Part A, there’s only one deductible (no “Benefit
Periods” apply here), and after you pay that deductible, you’re on the hook for 20% of the remaining costs. Medicare pays the other 80%. Sounds simple, right?
Well, of course, it’s not that simple. There’s a catch to that 20% too. Medicare will pay 80% of the allowed charges. In some cases (somewhat rare, but it happens), a doctor or some other type of provider is allowed to charge up to 15% more than the Medicare-allowed charge. There’s a reason this happens, but it’s not important. The important thing is, that this is allowed to happen, and if it does happen, you’re on the hook for the extra 15%. These are called Medicare Excess Charges.
What Does Medicare Part B Cover for Outpatient Procedures?
If you have an outpatient procedure that falls under Medicare Part B, you’re on the hook for 20% of it. This doesn’t sound too bad for a $1,000 chemotherapy treatment, but when was the last time you heard of a chemotherapy treatment that only costs $1,000? Me either.
Quick Math: Let’s say the surgery costs $20,000, and that’s the Medicare- allowable amount. That means you’re on the hook for 20% of that, or $4,000, after your deductible (which, remember, is $226 if you haven’t already paid it for the year).
More Quick Math: Using the same scenario above, if this particular doctor charges the Medicare Excess Charge, that charge would be $23,000. Medicare would approve the $20,000; then you’d pay 20% of that ($4,000) and then 100% of the extra “excess” of $3,000. So, in this example, your bill would be $7,000, plus (potentially) your annual Part B deductible.
Wow. Really? Yes. In my opinion, this is another one of the Four Frustrating Flaws of Original Medicare. Medicare insurance options are available that fix this by introducing annual out-of-pocket spending maximums – a MOOP. This is another reason people buy other Medicare insurance on top of, or in place of, Original Medicare.
What else? Yep, you guessed it. There’s no MOOP to Original Medicare Part B, either.
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Author Bio Matt Feret is the author of the Prepare for Medicare book series and launched prepareformedicare.com to help people get objective answers to questions about Medicare. Matt is also the host of The Matt Feret Show. He has held leadership roles at numerous Fortune 500 Medicare health insurers in sales, marketing, operations, product development, and strategy for over two decades.