Older adult using a power wheelchair at home

Medicare DME Coverage: What Part B Pays and What You Owe

Original Medicare covers durable medical equipment (DME) under Part B when it is medically necessary and ordered for use in your home. In 2026 you pay the $283 Part B deductible, then 20% of the Medicare-approved amount, as long as your supplier accepts assignment. That covers items like walkers, hospital beds, oxygen equipment, CPAP machines and, with extra paperwork, power wheelchairs. Below, we walk through the rules, the costs, the paperwork that trips people up and how Medigap and Medicare Advantage change the bill.

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TL;DR

  • Part B covers medically necessary DME for home use. After the $283 deductible, you typically pay 20% of the Medicare-approved amount.
  • Expensive items such as hospital beds, wheelchairs and CPAP machines are usually rented. Medicare pays for 13 months of continuous use, then you own the item.
  • Use a supplier that accepts assignment, and in a competitive bidding area, a contract supplier. Otherwise you may pay up front or be denied.
  • Medigap can cover some or all of the 20% coinsurance. Medicare Advantage plans have their own networks and copays.
  • Power wheelchairs and scooters need a face-to-face exam and a written prescription, and some need prior authorization.

Table of Contents

What counts as durable medical equipment

Medicare defines DME as reusable medical equipment. The Medicare DME booklet lists home oxygen equipment, hospital beds, walkers and wheelchairs as examples. Other common items include canes, blood sugar monitors, nebulizers and traction equipment.

To qualify, the equipment generally has to meet four tests:

  1. It is durable, meaning it can withstand repeated use.
  2. It serves a medical purpose.
  3. It is appropriate for use in your home.
  4. A doctor or other enrolled provider orders it because your condition requires it.

The same booklet also covers prosthetic devices, such as ostomy supplies and urinary catheters. If you are looking at artificial limbs or braces, our guide on prosthetics and orthotics coverage goes deeper.

What Medicare does not treat as DME

Equipment you use inside a hospital or a skilled nursing facility stay covered by Part A is the facility’s responsibility, not a Part B DME benefit. Comfort and convenience items, and anything not tied to a medical need, are generally not covered. If you are unsure about a specific item, ask your doctor and the supplier to confirm before you take delivery. Our overview of Part B covered items shows how DME fits alongside other outpatient services.

What you pay in 2026

The cost math is simple, but the rental structure surprises people.

Cost element What you pay (Original Medicare, 2026)
Part B deductible $283 per year, per Medicare.gov
Coinsurance after deductible 20% of the Medicare-approved amount
Monthly Part B premium Set separately, see Medicare’s cost page
Supplier that does not accept assignment You may have to pay the full cost up front and wait for reimbursement

There is no yearly cap on out-of-pocket spending in Original Medicare unless you have supplemental coverage, such as a Medigap policy, according to Medicare.gov. That matters with DME, because 20% of a large bill is still a large bill.

Why the “approved amount” matters

Medicare does not pay a supplier’s sticker price. It pays based on a fee schedule. For 2026, CMS applied a 2% update factor to many DMEPOS fee schedule amounts that were not adjusted using competitive bidding information. Your 20% is calculated on the approved amount, so the same item can cost you different amounts depending on where the fee schedule or competitive bidding rates land in your area.

Worked example

Say your doctor orders a hospital bed for home use and the monthly Medicare-approved rental amount is $100. This number is only for illustration, not a real fee schedule rate. If you have already met your deductible, you owe $20 a month and Medicare pays $80. If you have not, you pay the full approved amount until the $283 deductible is satisfied, then switch to 20%. With a Medigap plan that covers Part B coinsurance, that $20 may drop to zero, depending on the plan.

Illustration of Medicare hospital bed rental costs

Rent or buy: the 13-month rule

Medicare rarely writes a check for you to buy expensive equipment outright. For items like hospital beds and wheelchairs, Medicare pays rent for up to 13 months of continuous use. After that, ownership transfers to you. Less costly items such as canes, walkers and blood sugar monitors are classed as inexpensive or routinely purchased, and Medicare may cover the purchase directly.

Two practical points:

  • Continuous use matters. A gap in use can affect the 13-month count. Keep using the equipment as prescribed and keep your supplier’s records.
  • “Rental” on a claim is normal. You will see it on your Medicare Summary Notice even for equipment you expect to own eventually.

Picking a supplier: assignment and competitive bidding

This is where most surprise bills start. Two checks, before any equipment is delivered:

1. Does the supplier accept assignment? Medicare tells you to ask whether a supplier participates and accepts assignment. Suppliers that accept assignment take the Medicare-approved amount as payment in full, so you owe only your deductible and 20%. If they do not, you may be asked to pay the whole amount up front and wait for partial reimbursement.

2. Is the supplier a contract supplier in your area? In areas covered by the Competitive Bidding Program, Medicare pays for certain items only when they come from a contract supplier. The guide notes, for example, that people with both Medicare and Medicaid in a competitive bidding area get off-the-shelf back and knee braces from a contract supplier. Program rules and covered areas change, so verify the current list for your ZIP code rather than relying on an older supplier directory.

The Medicare.gov supplier search lets you find equipment and suppliers near you. Use it before you accept the first supplier a hospital discharge planner suggests.

Picking a supplier: assignment and competitive bidding — overview diagram

Power wheelchairs and scooters

Power mobility is the most scrutinized category. Medicare.gov says Part B covers power wheelchairs and scooters only when medically necessary, and you must have a face-to-face examination and a written prescription from a treating provider first. Certain power wheelchair types may also need prior authorization, which your supplier should request and send to Medicare with the required documents.

To keep a claim from stalling:

  • Ask your doctor to document why a cane, walker or manual wheelchair does not meet your needs at home. Clinicians often call this the “lesser equipment” question.
  • Make sure the exam notes describe your mobility limits in your home, not just in the clinic.
  • Confirm the supplier will handle prior authorization, if your model requires it, before you sign anything.
  • Keep copies of the prescription and exam record.

For manual wheelchairs, walkers, canes and related devices, see our page on mobility device coverage. If the real obstacle is your home layout, home modification coverage explains what Medicare will and will not pay for.

CPAP machines and other respiratory equipment

CPAP devices follow the same rental pattern. Medicare.gov says that after the deductible you pay 20% of the approved amount for the machine rental and supplies like masks and tubing, if the supplier accepts assignment. Medicare pays to rent the machine for 13 months as long as you use it continuously, and then you own it.

Coverage generally starts with a sleep apnea diagnosis. Ask your doctor what testing and follow-up documentation Medicare requires to keep rental payments going, and ask the supplier how they report your usage. Home oxygen equipment is also DME under Part B, with its own medical necessity documentation, so request the specific requirements from your prescriber.

How your plan type changes the bill

Original Medicare alone

You get the rules above: deductible, 20% coinsurance, no out-of-pocket maximum. You can use any supplier that accepts assignment (and meets competitive bidding rules where they apply).

Original Medicare plus Medigap

Medigap can be a strong tool for DME. Depending on the policy, Medigap can help pay the 20% Part B coinsurance left after the deductible. You can compare plan letters on Medicare’s benefit chart. If you expect ongoing equipment needs such as oxygen, a power chair or long CPAP use, this is worth pricing before you need the equipment, not after. See our Medicare Supplement page for how we approach plan selection.

Medicare Advantage

Advantage plans must cover what Original Medicare covers, but the cost sharing and the supplier network can differ. Medicare.gov notes that costs vary by plan, so read your Evidence of Coverage for the DME copay or coinsurance, whether you need prior authorization, and whether you must use in-network suppliers. A supplier that works fine for a neighbor on Original Medicare may be out of network for you. Our Medicare Advantage guide and plans explained walk through the network questions.

Original Medicare Original + Medigap Medicare Advantage
Supplier choice Any that accepts assignment Any that accepts assignment Often in-network only
Typical cost Deductible plus 20% Coinsurance may be reduced or covered, by policy Plan copay or coinsurance
Prior authorization Certain items Certain items (Medicare rules) Plan rules may add more
Out-of-pocket cap None Depends on policy Plan has a maximum

Pricing items outside Medicare’s DME benefit

Some wellness equipment and therapy devices are not Medicare DME, so you pay out of pocket. If you are weighing that kind of purchase against a membership, a U.S. compression therapy cost breakdown shows how a one-time unit price compares with ongoing sessions. Ask your doctor first whether a Medicare-covered alternative fits your condition.

Our perspective

We have helped Medicare consumers since 2007, and DME is one of the places where we see the gap between “Medicare covers it” and “here is what I owe.” The coverage is rarely the problem. The surprises come from three places: a supplier that did not accept assignment, a Medicare Advantage network nobody checked, and a 20% coinsurance on a rental nobody explained.

Our approach is education first. As independent agents with access to 40+ carriers, we can look at how your likely equipment needs interact with a Medigap or Advantage choice, and we do it without pressure. If you already use oxygen, a CPAP or a mobility device, tell us. That changes which plan makes sense far more than a premium comparison does.

One habit we recommend: during your annual coverage checkup, list the equipment you use or expect to need, then confirm your suppliers are still in network and still accept assignment. It takes ten minutes and prevents the most expensive mistakes.

— Paul

Getting help with the plan side

If equipment costs are a worry, we can compare Medigap and Medicare Advantage options for your situation, review your current plan’s DME rules, and explain the tradeoffs in plain language. Start with our Medicare Supplement plans or visit Paul B Insurance to talk with an independent agent. For a broader read, see our 2026 durable medical equipment guide.

A checklist before you order equipment

  1. Get the prescription or order from an enrolled provider, with your medical need written down.
  2. Confirm the item is covered for home use under Part B or your plan.
  3. Ask the supplier if they accept assignment, and whether they are a contract supplier in your area.
  4. Ask whether prior authorization is needed and who files it.
  5. Ask whether the item is rented or purchased, and what your monthly cost will be.
  6. If you have Medicare Advantage, call the plan to confirm the in-network supplier and copay.
  7. Keep your paperwork and check each Medicare Summary Notice for errors.

If Medicare denies a claim, you have appeal rights. The notice you receive explains how to start, and your doctor’s records are the strongest evidence you can add.

FAQ

Does Medicare cover a power wheelchair?

Yes, when it is medically necessary. You need a face-to-face exam and a written prescription from a treating provider, and some power chairs require prior authorization. You then pay the deductible and 20% of the Medicare-approved amount if the supplier accepts assignment.

Does Medicare cover CPAP machines?

Yes. Part B covers CPAP rental and supplies like masks and tubing. After the deductible you pay 20% of the approved amount, and after 13 continuous months of rental payments you own the machine.

Which Medicare plans cover DME?

Original Medicare covers it under Part B. Medicare Advantage plans must also cover it, but their copays, prior authorization rules and supplier networks can differ. Medigap does not replace Part B; it may help pay your share of the coinsurance, depending on the policy.

Do I own equipment that Medicare rents?

For major rental items, yes, after 13 months of continuous use. Smaller items like canes and walkers may be purchased directly. Ask your supplier which category your item falls under.

Sources

What Is Medicare Part B and What Does It Actually Cover?

The complete guide to Medicare’s medical insurance — every service it covers, exactly what it costs in 2026, how it works with group insurance and VA benefits, and the excess charges most people have never heard of until they get a surprise bill.

The Short Answer

Medicare Part B is medical insurance — it covers doctor visits, outpatient care, preventive services, durable medical equipment, and more. Unlike Part A, Part B is not premium-free for anyone: everyone pays a monthly premium (202.90in2026formostpeople),anannualdeductible(283), and 20% coinsurance on most covered services, with no yearly cap on that 20% under Original Medicare alone. Whether you need to enroll at 65, and whether delaying is safe, depends heavily on your employment status and your employer’s size — getting this wrong is one of the most consequential and permanent mistakes in all of Medicare.

Key Takeaways

  • Part B is never premium-free — everyone pays a monthly premium, and higher earners pay significantly more through IRMAA.
  • The 20% coinsurance under Original Medicare alone has no yearly cap — this is the single biggest financial risk in Medicare, and it’s the reason Medigap and Medicare Advantage exist.
  • Whether you can safely delay Part B without a penalty depends on your employer’s size: 20+ employees generally allows delay; fewer than 20 generally does not.
  • Missing your enrollment window triggers a permanent 10% penalty for every 12-month period you went without coverage.
  • Veterans can and generally should enroll in Part B even with VA benefits, since Medicare and VA coverage don’t coordinate — each only pays for care received within its own system.
  • “Excess charges” from non-participating providers can add up to 15% on top of what Medicare approves, and only some Medigap plans protect you from them.

What Part B Actually Covers

While Part A handles hospital room and board, Part B is the half of Original Medicare that covers medical care and most services delivered outside a hospital admission — doctor visits, outpatient procedures, and ongoing medical needs.

What’s covered

  • Doctor visits — primary care and specialists
  • Outpatient surgeries and procedures
  • Diagnostic lab work, X-rays, and MRIs
  • Emergency room visits
  • Ambulance services
  • Outpatient mental health care
  • Physical, occupational, and speech therapy
  • Chemotherapy and radiation received in an outpatient clinic
  • Durable Medical Equipment (DME) — wheelchairs, oxygen equipment, blood sugar monitors, walkers, and similar equipment
  • Ambulatory surgical center services

Preventive services: the part Medicare gets genuinely right

Most preventive services are covered at 100%, with no deductible and no copay, as long as your provider accepts Medicare assignment. This includes:

  • Your one-time “Welcome to Medicare” wellness visit, available within your first 12 months on Part B
  • Annual wellness visits after that
  • Flu shots and most other recommended vaccines
  • Mammograms
  • Colonoscopies and other cancer screenings
  • Diabetes and cardiovascular screenings
  • Many other screenings recommended by the U.S. Preventive Services Task Force

Paul’s Honest Take: This is one of the most underused parts of Medicare, full stop. I’ve had clients who paid for a private physical every year out of habit and never realized their annual wellness visit through Medicare was completely free. If you haven’t used your Welcome to Medicare visit or your annual wellness visit, that’s real value sitting on the table.

What’s NOT covered

  • Routine dental care — cleanings, fillings, dentures, extractions
  • Routine vision exams and eyeglasses
  • Hearing aids (though diagnostic hearing tests ordered by a doctor may be covered)
  • Long-term custodial nursing home care — help with daily living activities, as opposed to short-term skilled or medical care
  • Routine prescription drugs you pick up at a retail pharmacy — that’s Part D’s job, not Part B’s
  • Cosmetic surgery, unless medically necessary (such as reconstruction after an accident or mastectomy)
  • Most care received outside the United States, with very limited exceptions
  • Routine foot care, such as nail trimming, in the absence of a qualifying medical condition
  • Acupuncture, except for a narrow, specific chronic low back pain benefit
  • Concierge medicine fees and membership-style charges some practices add on top of standard care
  • Long-term care insurance-style services, including most home-based personal care that isn’t tied to a skilled medical need

Paul’s Honest Take: The dental and vision exclusions are the ones that surprise people most, especially since they’re such routine parts of healthcare for most adults. This is exactly why so many Medicare Advantage plans build dental, vision, and hearing benefits into their coverage — Original Medicare was simply never designed to include them, and that gap doesn’t go away on its own.

What Part B Costs in 2026

Part B has three separate cost components, and understanding all three matters:

Cost Component

2026 Amount

Standard monthly premium

$202.90

Annual deductible

$283

Coinsurance on most covered services

20%

The premium is deducted automatically from your Social Security check if you’re already collecting benefits. If you’re not yet collecting Social Security, you’ll receive a bill, typically every three months.

The deductible works differently than Part A’s — it’s a straightforward annual figure. You pay the first $283 of Medicare-approved outpatient costs each calendar year, and then Medicare’s cost-sharing kicks in.

The coinsurance is where the real risk lives. After your deductible is met, Medicare pays 80% of the Medicare-approved amount for most covered services, and you’re responsible for the remaining 20%. There is no yearly cap on this 20% under Original Medicare alone. If you have a $100,000 course of cancer treatment, your 20% share is $20,000 — unless you have a Medigap policy or Medicare Advantage plan absorbing that cost.

Paul’s Honest Take: I put this in bold because it’s genuinely the single most important number in this entire guide. That uncapped 20% is the whole reason Medigap and Medicare Advantage exist as products in the first place. Original Medicare by itself was never designed to protect you from a truly expensive year — it was designed to cover 80% of it and leave the rest to you.

IRMAA: What Higher Earners Actually Pay

If your income is above certain thresholds, you’ll pay more for Part B through the Income-Related Monthly Adjustment Amount (IRMAA) — based on your tax return from two years prior. For 2026, that means your 2024 income determines your premium tier.

2024 Income (Individual)

2024 Income (Married, Joint)

Total Part B / Month

$109,000 or less

$218,000 or less

$202.90

$109,001 – $137,000

$218,001 – $274,000

$284.10

$137,001 – $171,000

$274,001 – $342,000

$405.80

$171,001 – $205,000

$342,001 – $410,000

$527.50

$205,001 – $499,999

$410,001 – $749,999

$649.20

$500,000 and above

$750,000 and above

$689.90

At the top tier, you’re paying more than three times the standard premium. If your income has recently dropped — retirement, the loss of a spouse, or certain other life-changing events — you can appeal your IRMAA determination using Form SSA-44.

Do You Have to Enroll? And What Happens If You Don’t?

Technically, Part B is optional — Medicare won’t force you into it. But opting out without a valid alternative is genuinely risky, because of how the penalty structure works.

If you don’t sign up during your Initial Enrollment Period (the 7-month window around your 65th birthday) and you don’t have qualifying employer coverage, you’ll face a permanent 10% penalty added to your premium for every full 12-month period you went without Part B. That penalty doesn’t expire — you pay it for as long as you have Part B, which for most people means for the rest of your life.

Example: If you delayed enrollment by 24 full months without a valid exception, you’d pay an extra 20% on top of the standard $202.90 premium in 2026 — roughly $40.58 more, every month, permanently.

How Part B Works with Group Insurance

Just like Part A, whether you can safely delay Part B without penalty comes down to one specific number: how many employees your company has.

Companies with 20 or more employees: If you or your spouse are actively working and covered by a genuine group health plan, your workplace insurance is primary, and you can legally delay Part B without any penalty. When that employment or coverage eventually ends, you get an 8-month Special Enrollment Period to enroll in Part B penalty-free.

Companies with fewer than 20 employees: Medicare automatically becomes your primary insurer at 65, regardless of your employment status. You need to enroll in Part B right on schedule. If you don’t, your small employer’s plan can legally refuse to pay claims that Medicare should have covered first — potentially leaving you responsible for the full cost.

Paul’s Honest Take: I say this in nearly every guide I write, because it’s genuinely one of the costliest misunderstandings I encounter: “I have good coverage at work” and “I’m protected from Medicare’s enrollment deadlines” are two completely different statements, and whether the second one is true depends entirely on your employer’s size — not how generous the coverage feels. Confirm the actual employee count before you decide to delay anything.

Retiree Coverage Is Not the Same as Active Employer Coverage

This is a distinction that catches a genuinely large number of people off guard: the “20 or more employees” exception only applies to active employment. If you retire and your former employer offers you retiree health benefits — sometimes a genuinely good, comprehensive plan — that coverage does not create a Special Enrollment Period the way active group coverage does, and it does not exempt you from enrolling in Part B on time.

Paul’s Honest Take: I’ve seen this mistake more than once, and it’s an especially painful one because it happens to people who did everything right during their working years. Someone retires with a strong retiree health plan from a large employer, assumes it works the same way their active coverage did, and delays Part B — only to find out later that retiree coverage was never a valid reason to delay in the first place. The moment you stop actively working, that clock starts, regardless of how good your retiree plan looks on paper. If you’re retiring and keeping employer retiree benefits, treat enrolling in Part B as something to handle right on schedule, not something retiree coverage lets you postpone.

Why You Need Both Part A and Part B for Medigap or Medicare Advantage

Here’s a foundational requirement worth understanding clearly, since it shapes every other coverage decision in Medicare: you must be enrolled in both Part A and Part B before you can buy a Medigap policy or enroll in a Medicare Advantage plan. Neither product exists as a standalone substitute for Original Medicare — both are built specifically to work alongside it.

  • Medigap fills the cost-sharing gaps left by Original Medicare (Parts A and B) — it has nothing to fill in if you’re not enrolled in both parts to begin with.
  • Medicare Advantage legally must provide at least the same coverage as Parts A and B combined, which is only possible because you’re required to be enrolled in both before a Medicare Advantage carrier can enroll you.

Paul’s Honest Take: This surprises people who assume they can somehow “skip” Part B and go straight into a Medicare Advantage plan to avoid the extra premium. It doesn’t work that way — Part B enrollment, and its premium, is a prerequisite either way, whether you end up on Original Medicare with Medigap or on a Medicare Advantage plan. There’s no path through Medicare that avoids the Part B premium once you’re actually using the system.

Does Medicare Work If You’re a Veteran?

Yes — and if you have VA health benefits, understanding how the two systems relate is genuinely important, because they work differently than most people assume.

Medicare and VA benefits do not coordinate. These are two entirely separate systems that each pay only for care received within their own network. Medicare doesn’t pay for care you receive at a VA facility, and VA benefits don’t pay for care you receive from a non-VA doctor or hospital. You, the veteran, choose which system to use each time you seek care.

Here’s the critical point: having VA benefits does not exempt you from Medicare’s enrollment deadlines. VA coverage is not considered a qualifying reason to delay Part B without penalty. If you don’t enroll in Part B during your Initial Enrollment Period and you’re relying solely on VA benefits, you can still trigger the permanent late enrollment penalty.

Why the VA itself recommends enrolling in Medicare anyway:

  • It gives you access to civilian doctors and hospitals outside the VA system
  • VA healthcare funding depends on annual Congressional appropriations, which isn’t guaranteed to remain stable
  • If VA authorizes only part of your needed care at a non-VA facility, Medicare can help cover the rest
  • Having both gives you meaningfully more flexibility and security than relying on either system alone

Paul’s Honest Take: This is one of the most common misconceptions I run into with veterans specifically, and it’s an expensive one to get wrong. Good VA coverage feels like it should be enough, and it might genuinely handle most of your care — but it doesn’t protect you from the Part B enrollment clock the way employer coverage from a large company can. The VA itself actively encourages enrolling in Medicare Parts A and B for exactly this reason. If you have VA benefits and are approaching 65, this is worth a direct conversation before you assume you’re covered.

Veterans who enroll in Part B can also purchase a Medigap policy, which can be particularly valuable if you use non-VA providers regularly — though if you primarily rely on VA facilities for most of your care, the value of an added Medigap policy may be more limited, and worth weighing carefully.

How Long Does It Actually Take to Get Part B Approved?

This is one of the most practical, and most overlooked, pieces of planning — especially if you’re leaving a job after 65 and coordinating your Part B start date around the end of your employer coverage. Applying isn’t instant, and the timeline depends heavily on which enrollment window you’re using.

Enrollment Situation

Typical Processing Time

When Coverage Actually Starts

Initial Enrollment Period (around 65)

2–4 weeks, sometimes up to 6

1st of your birthday month (if applied in the 3 months before) or 1st of the month after you apply (if applied during or after your birthday month)

Special Enrollment Period (leaving employer coverage)

4–8 weeks, sometimes longer

1st of the month after your application is submitted

General Enrollment Period (Jan 1–Mar 31, missed window)

4–6 weeks

1st of the month after you apply

Why the Special Enrollment Period takes longer: applying after leaving employer coverage requires two forms, not one — Form CMS-40B (the actual Part B application) and Form CMS-L564 (Request for Employment Information), which your employer needs to complete to verify you had qualifying coverage. Social Security has to manually review both, which is exactly why this route consistently takes longer than a standard Initial Enrollment Period application.

Paul’s Honest Take: This timeline question comes up constantly with clients who are retiring or leaving a job after 65, and it deserves real attention — not just because of the penalty risk we’ve already covered, but because a slow approval can leave you with an actual gap in coverage if you time it too tightly. My standard advice: start this process at least 2 to 3 months before you need Part B to actually begin, not the week your employer coverage ends. If your former employer is slow to complete their portion of Form CMS-L564, that alone can hold up the entire application — so it’s worth following up with your HR or benefits department directly rather than assuming it’s been submitted.

Practical tips to avoid delays

  • Apply online through SSA.gov whenever possible. It’s consistently the fastest method — mailed or faxed forms are more prone to getting lost or delayed.
  • If you’re on a Special Enrollment Period, submit Form CMS-L564 alongside Form CMS-40B, not separately. They need to arrive together, and one incomplete form can stall the whole application.
  • Expect a short intake lag even with online applications. It can take several business days for an online submission to actually appear on a local Social Security agent’s screen — don’t panic if you call shortly after applying and they say they don’t see it yet.
  • Once approved, you don’t have to wait for your physical card. Your Medicare Beneficiary Identifier typically appears in your online Social Security or Medicare.gov account within a day or two of approval, and you can print a temporary card from there — the physical card generally arrives by mail within about 30 days.

Excess Charges: The Cost Almost Nobody Knows to Ask About

Here’s a detail that surprises even people who’ve been on Medicare for years: not every doctor who accepts Medicare agrees to accept Medicare’s approved amount as full payment.

Providers fall into three categories:

  • Participating providers accept Medicare assignment, meaning they agree to accept the Medicare-approved amount as payment in full. This covers the vast majority of providers — roughly 98% of doctors nationally.
  • Non-participating providers still accept Medicare patients but haven’t agreed to accept the standard rate. They can charge an excess charge of up to 15% above the Medicare-approved amount.
  • Opted-out providers have left the Medicare system entirely and can charge whatever they want under a private contract — Medicare pays nothing at all for care from these providers, except in emergencies.

How excess charges actually work: if the Medicare-approved amount for a service is $300 and you see a non-participating provider, they can legally charge up to an additional $45 (15%) on top, for a total bill of $345 — and that excess amount doesn’t count toward your Part B deductible.

Eight states currently prohibit or limit excess charges entirely: Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont. If you live in one of these states, you’re generally shielded from excess charges from providers within your state — though you could still face them if you receive care from a non-participating provider elsewhere.

Paul’s Honest Take: This is exactly why Medigap Plan G matters so much for people who want maximum flexibility. Plan G covers excess charges in full — Plan N does not. If you’re the kind of person who wants the freedom to see any doctor without worrying about billing surprises, that distinction is worth understanding clearly before you pick between the two. And regardless of which plan you choose, it’s always worth asking a new provider directly whether they accept Medicare assignment before your first appointment.

The HSA Rule: Part B Closes the Door Too

If you’re hoping to keep contributing to a Health Savings Account, know this clearly: enrolling in Part B — or any part of Medicare — ends your ability to make new HSA contributions. This isn’t unique to Part B; it applies the moment you enroll in Medicare in any form, including premium-free Part A.

If keeping your HSA active matters to you, the only way to legally delay both Part A and Part B is through qualifying employer coverage — which, as covered above, generally requires an employer with 20 or more employees. And because Part A enrollment can be backdated up to 6 months once you do enroll, it’s smart to stop HSA contributions 6 months before you plan to sign up for Medicare or file for Social Security, whichever comes first.

Frequently Asked Questions

Is there a cap on what I’ll pay for Part B services in a year? Not under Original Medicare alone — the 20% coinsurance has no yearly limit. A Medigap policy or Medicare Advantage plan is what actually caps your exposure.

What happens if I don’t sign up for Part B on time? You’ll generally face a permanent 10% penalty on your premium for every 12-month period you went without coverage, unless you qualify for a Special Enrollment Period through active employer coverage.

Do I need Part B if I have good coverage through a small employer? Almost certainly yes. If your employer has fewer than 20 employees, Medicare becomes your primary insurer at 65 regardless of your job coverage, and not enrolling can leave you exposed to unpaid claims and a lifelong penalty.

Do veterans need Medicare Part B if they have VA benefits? Generally, yes. Medicare and VA benefits don’t coordinate — each only pays for care within its own system — and VA coverage doesn’t exempt you from Medicare’s enrollment deadlines or penalties.

What is a Part B excess charge? An additional charge, up to 15% above the Medicare-approved amount, that a non-participating provider can legally bill you. It doesn’t count toward your deductible, and only Medigap Plan G (among current plans) covers it in full.

Can I keep contributing to my HSA if I enroll in Part B? No. Enrolling in any part of Medicare, including Part B, ends your HSA contribution eligibility going forward.

How long does it take to get approved for Part B? It depends on the enrollment window. Initial Enrollment Period applications typically process in 2–4 weeks. Special Enrollment Period applications, used when leaving employer coverage, generally take 4–8 weeks since Social Security must manually verify your prior coverage using Form CMS-L564. Start the process at least 2–3 months before you need coverage to begin, especially when coordinating around a job ending.

The Bottom Line

Part B is the half of Medicare that covers your everyday medical care — and it’s also where the real financial exposure of Original Medicare lives, thanks to that uncapped 20% coinsurance. Whether you should enroll at 65, whether you can safely delay, and how much of that exposure you’re carrying all depend on details specific to your situation: your employer’s size, your income, your VA status, and which doctors you actually see.

If you want help sorting out exactly how Part B applies to your specific circumstances — or want to understand how Medigap or Medicare Advantage could close that uncapped coinsurance gap — that’s exactly the conversation I have with clients every day, at no cost to you.

Call 631-358-5793 or visit paulbinsurance.com to set up a time to talk it through.

Paul Barrett, CMIP, is the founder of The Modern Medicare Agency, based in Melville, NY, and has spent 18+ years exclusively helping people navigate Medicare — never life insurance, never annuities, just Medicare. He’s licensed in 37 states, represents more than 40 carriers, and has personally helped over 5,000 clients choose coverage that actually fits their lives.

Figures current as of 2026 and sourced from CMS, Medicare.gov, and the Social Security Administration. Individual circumstances vary, especially around employer coverage, VA benefits, and income-based premiums — always verify your specific situation before making enrollment decisions.

Sources

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