Medicare Supplement Insurance, often called Medigap, is a private health insurance policy designed to work alongside Original Medicare (Part A and Part B). Original Medicare typically covers about 80% of approved medical costs, leaving the beneficiary responsible for the remaining 20% coinsurance, deductibles, and copayments. Medigap policies are standardized plans sold by private companies to cover these out-of-pocket expenses. The central question is whether a doctor’s willingness to treat a patient is affected by this secondary insurance.
The Foundation: Doctor Acceptance of Original Medicare
A doctor’s decision to see a patient is based entirely on their relationship with Original Medicare, not on the patient’s supplemental coverage. Doctors who treat Medicare beneficiaries fall into two categories: Participating (PAR) or Non-Participating (Non-PAR). PAR providers agree to accept the Medicare-approved amount as full payment for all covered services. They receive 5% more in reimbursement from Medicare and must accept “assignment,” meaning they cannot charge the patient more than Medicare’s set rate.
Non-Participating providers have not signed the full agreement but still accept Medicare. They are not required to accept assignment on every claim, which means they can charge the patient a “limiting charge” of up to 15% above the Medicare-approved amount. This extra cost is the patient’s responsibility, though some Medigap plans may cover it. The only difference is the potential for the patient to incur a small balance bill from a Non-PAR provider.
How Medigap Policies Affect Payment
A doctor who accepts Original Medicare cannot refuse a patient solely because the individual carries a Medigap policy. Medigap functions as secondary coverage, and its presence does not add administrative burden or financial risk to the medical practice. The claims process is highly streamlined and automated, regardless of which of the standardized Medigap plans the patient has.
Medicare processes the claim first and pays its share of the approved amount, typically 80%. This claim information is then automatically sent, or “crosses over,” to the private Medigap insurer. The Medigap company then pays the doctor directly for the remaining cost-sharing amounts covered by the specific policy. This automatic process ensures the doctor receives payment efficiently, guaranteeing the collection of the patient’s cost-sharing portion. Because Medigap policies are standardized, the doctor receives payment the same way, regardless of the specific plan.
Situations Where Doctors Can Refuse Medicare Patients
While a doctor cannot refuse a Medigap policy, there are specific situations where a medical practice can refuse a patient with Medicare. The most definitive form of refusal is when a physician chooses to “opt out” of the Medicare program entirely. Opt-out doctors have no contract with Medicare and do not submit claims to the program for any services they provide.
If a patient sees an opt-out doctor, they must pay 100% of the bill out-of-pocket, as neither Original Medicare nor the Medigap policy will provide any reimbursement. This is a rare occurrence, with fewer than 1% of physicians formally opting out of Medicare. Another common source of confusion is the distinction between Medigap and Medicare Advantage (Part C) plans.
Medicare Advantage plans are a private alternative to Original Medicare, and they operate using specific provider networks. A doctor can refuse a patient who has a Medicare Advantage plan if that plan is not part of the doctor’s contracted network. This refusal, however, has no bearing on a Medigap policy, which works with any doctor who accepts Original Medicare. The key decision for the doctor is their participation status with the federal program, not the patient’s choice of private supplemental insurance.