Medicare Excess Charges: How Assignment Affects Your Costs

Medicare Excess Charges: How Assignment Affects Your Costs

A nonparticipating Medicare provider who doesn’t accept assignment may charge a Medicare Part B excess charge, up to 15% of the Medicare-approved amount. If you’re asking what a Medicare excess charge is, it’s an extra amount above what Medicare approves for a covered service, separate from your usual coinsurance.

It’s easy to confuse assignment with whether a provider accepts Medicare at all. The key difference is whether the provider agrees to take Medicare’s approved amount as full payment. This guide explains how that choice affects your bill, walks through clear examples of the calculation, and covers how Medigap coverage and state rules may limit excess charges. You’ll also see why the amount on a bill may differ from a simple 15% calculation, so you can better understand what you may owe.

Key Takeaways

  • Assignment affects which approved amount applies. For Part B services, a non-participating provider’s approved amount is 95% of the amount Medicare would approve for a participating provider, according to the Centers for Medicare & Medicaid Services.
  • Compare Medigap benefits carefully: Plans F and G cover excess charges, while Plan N doesn’t.
  • State protections can depend on where you receive care. A rule that protects you at home may not apply when you’re treated in another state.
  • Follow the calculation from the approved amount to the provider’s charge to understand how an extra bill is determined.

What are excess charges?

With Original Medicare, a Part B excess charge can add to your costs for a covered service. Whether one applies depends on whether the provider accepts assignment.

Part B Excess Charge Definition

A Medicare Part B excess charge is an amount a non-participating provider may bill above Medicare’s approved amount. The provider accepts Medicare but hasn’t agreed to accept assignment for the service and hasn’t opted out of Medicare. This charge is separate from your usual share of the bill. Put simply, a Medicare excess charge is an additional amount tied to the provider’s billing choice.

With Original Medicare, participating providers accept Medicare’s rates as full payment for covered services. A non-participating provider may accept Medicare but decline assignment for a particular service. In that case, the provider may bill an excess charge, subject to applicable limits. This charge is separate from your Part B coinsurance and deductible.

You generally pay covered Part B costs yourself until you meet that deductible. Afterward, Medicare generally pays 80% of covered services, leaving you responsible for 20% coinsurance. An excess charge can be added on top of that coinsurance, so meeting the deductible doesn’t remove it.

For example, you may owe regular coinsurance after Medicare pays its share for a covered service. If the provider also bills an excess charge, that amount is a separate part of what you owe. It doesn’t count toward the Part B deductible or replace coinsurance, copayments, or other costs.

Limits on Excess Charges

For a Part B service, an excess charge can be up to 15% of the Medicare-approved amount. That limit puts a ceiling on the extra bill, but it doesn’t mean every non-participating provider charges the full amount. Knowing the cap helps you distinguish an excess charge from coinsurance and compare the bill with Medicare’s approved amount.

The 15% limit concerns the provider’s additional charge, not your total out-of-pocket responsibility. Your deductible and coinsurance remain separate. Also, a provider who has opted out of Medicare is different from a non-participating provider: Medicare doesn’t pay for an opted-out provider’s services. That distinction matters before you estimate what a visit may cost.

To understand a bill, identify the service, the Medicare-approved amount, and whether the provider accepted assignment. Then separate your deductible or coinsurance from any additional charge. For instance, a bill that includes both 20% coinsurance and an excess charge has two distinct components. Keeping them separate makes the provider’s calculation easier to understand.

Assignment is the key distinction, but other factors can affect what you owe. A Medicare Supplement policy or state rule may limit your exposure to excess charges. The following sections explain how these protections work and why the location of care can matter.

Medicare assignment and the Medicare-approved amount

Medicare’s approved amount is the payment basis for a covered service. Assignment determines whether a provider agrees to accept that amount as full payment.

Medicare Assignment

Medicare assignment means a provider agrees to accept Medicare’s approved amount as full payment for a covered service. Participating providers accept assignment; non-participating providers may decline it for some services. A provider that declines assignment may bill an additional amount, within the applicable limit.

According to the Centers for Medicare & Medicaid Services, for a Medicare Part B service, a non-participating provider’s approved amount is 95% of the amount Medicare would approve for a participating provider. This lower approved amount affects how Medicare processes the claim. It also means the approved amount for a non-participating provider differs from the participating-provider amount.

Medicare sets an approved amount for each covered service. This amount is the basis for calculating Medicare’s share and your share, but it may differ from the provider’s listed fee. To understand a bill, compare the service and its approved amount with the provider’s charge and assignment status.

Almost all providers who bill Medicare participate and accept Medicare’s rates as full payment. A non-participating provider can still accept Medicare but may require you to pay the full bill at the time of care. The provider may file the claim, or you may need to submit it yourself. This affects both what you pay upfront and how reimbursement is handled.

Maximum Excess Charge Amount

A Part B excess charge can be up to 15% of the Medicare-approved amount for a service. This limit applies to the additional charge, not to your total bill. Your deductible or coinsurance is separate, so the cap helps identify one part of the amount you may owe.

That calculation illustrates the cap on an excess charge. It doesn’t include every part of your bill, such as coinsurance or any remaining deductible.

The approved amount used in a calculation matters. For a non-participating provider, that amount is lower than the participating-provider amount. As a result, the total charge may be less than 115% of the usual Medicare-approved amount. Don’t assume that adding 15% to a participating provider’s figure will always show the exact maximum bill.

Review the claim details by matching the service, approved amount, provider’s charge, and assignment status. Then separate any excess charge from your other cost-sharing. If you’re comparing how a supplement may handle excess charges, explore Medigap plan coverage as part of that review.

Medigap coverage for excess charges

No. Original Medicare doesn’t pay the excess charge above its approved amount. It pays its share for covered Part B services, while the excess charge is a separate amount the provider may bill.

Medigap, also called Medicare Supplement insurance, can help cover this specific extra cost. Plans F and G cover Medicare Part B excess charges; Plan N does not. The plan letter matters: Medigap policies with different letters can treat the same provider charge differently, even though both work alongside Original Medicare.

Plan F covers Part B excess charges, but it isn’t available to everyone. It’s available only to people who were eligible for Medicare before January 1, 2020. If you became eligible on or after that date, Plan F isn’t an option for you. Plan G also covers excess charges and may be a relevant plan letter to compare.

Plan N does not cover excess charges. If you have Plan N and a non-participating provider bills an excess charge, the policy won’t cover it. This is separate from Plan N’s other benefits, so don’t assume a Medigap policy automatically covers every possible Part B bill. Check the plan letter and benefit description for the specific protection you need.

For example, suppose a provider bills an excess charge after a covered Part B service. Plan G or an eligible Plan F policy covers the charge under its benefit. Plan N does not. The provider’s assignment status and your Medigap plan letter both matter.

When comparing Medigap plans, focus on the excess-charge benefit, not just the plan name. Confirm whether the plan is F, G, or N, then consider how that benefit fits with your Original Medicare coverage. If you already have a policy, review its benefit summary before assuming it will cover a particular charge. The plan letter is a useful starting point.

Medigap coverage for excess charges doesn’t change whether a provider accepts assignment. It affects who may be responsible for an excess amount when one applies. Keep the questions separate: first identify the provider’s assignment status, then check whether your Medigap plan covers the resulting charge.

That distinction can help you compare coverage without confusing the provider’s bill with Medicare’s payment. In 2026, Plan F’s eligibility cutoff remains important, while Plans F and G cover excess charges and Plan N does not. Knowing these differences gives you a practical way to assess this benefit when reviewing Medigap options.

Medicare Excess Charges: How Assignment Affects Your Costs

State restrictions on excess charges

State rules can limit or prohibit Part B excess charges for care received in certain states. Protection may depend on both your state of residence and where you receive care.

States Prohibiting Excess Charges

Eight states prohibit Part B excess charges for care received in the beneficiary’s home state: Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont. For eligible residents receiving covered care in their own state, this can reduce out-of-pocket costs.

However, home-state protection doesn’t necessarily apply when you travel. Someone protected in their home state may still face excess charges elsewhere. Minnesota shows why both details matter: its providers may not charge Minnesota residents these excess fees, but may charge patients from other states who receive care in Minnesota.

For comparison, consider a Minnesota resident receiving care in Minnesota and an out-of-state patient receiving care there. The state restriction applies differently in these situations. Your state of residence and the service location both affect whether a state rule limits the provider’s bill.

State-Imposed Limits

Some states restrict excess charges without banning them completely. Their rules may cap the extra amount below the federal limit of 15%. The applicable state rule can therefore change how much a provider may bill, making the service location important when estimating your share.

New York sets a 5% limit above the Medicare-approved amount for services covered by its state rule. Certain services outside that rule remain subject to a federal cap of 15% above Medicare’s approved payment amount. The state limit is not universal across every service, so the service itself matters.

These differences mean the same provider charge can have different limits depending on the state rule and service. A 5% state cap applies to services covered by New York’s rule, while the federal 15% cap applies to certain services outside it. Neither figure describes your entire bill, which may include other Medicare cost-sharing.

Before assessing an excess charge, identify where you received care, your home state, and the service involved. Then distinguish a state prohibition from a state limit: a prohibition bars the charge in covered circumstances, while a limit allows an additional amount up to a lower ceiling. This distinction helps you understand whether a bill may include an excess charge or whether a state rule restricts it.

State restrictions are one part of the protection picture. They don’t automatically mean every patient receiving care in a listed state pays the same amount. For example, Minnesota’s rule treats residents and visitors differently, while New York’s 5% cap applies only to services covered by its rule. Checking residence, care location, and service together gives you a clearer view of possible costs.

Examples of excess-charge calculations

A clear calculation separates the provider’s charge from Medicare’s approved amount, then identifies assignment, any excess charge, and your other cost-sharing. It won’t represent every healthcare bill, because each service has its own approved amount.

Your total responsibility may also include other amounts, such as coinsurance or a deductible.

Now compare this with a provider who accepts assignment for the same service. The provider agrees to accept Medicare’s approved amount as full payment for the covered service, so the difference that creates an excess charge doesn’t arise. This is why assignment status matters when you review a bill, along with the service and its approved amount.

A non-participating provider uses a different approved amount. For a Part B service, the approved amount is 95% of what Medicare would approve for a participating provider, according to the Centers for Medicare & Medicaid Services. The excess charge is calculated against the applicable approved amount, not automatically against the participating-provider figure. That distinction explains why a total charge may be less than 115% of the usual Medicare-approved amount.

Keep each part of the bill separate. First identify the covered service and approved amount. Then determine whether the provider accepted assignment, and distinguish any excess charge from your regular Medicare cost-sharing. This breakdown helps you assess the additional amount instead of treating the entire bill as one charge.

Payment timing can also affect what you see. A non-participating provider may require payment in full at the time of care and may or may not file the claim with Medicare. If the provider doesn’t file the claim, you may need to follow up on filing it and any related coverage paperwork. Keep the bill and service details together so the claim can be matched to the right approved amount.

If a bill appears to exceed the applicable limit, keep documentation showing the excess charge, Medicare-approved amount, and service code. Use these details when contacting your Medicare carrier about an appeal.

To understand how a supplement may help with this type of cost, compare Medigap coverage alongside your expected healthcare needs.

The Modern Medicare Agency: Medicare Advantage Plans

The Modern Medicare Agency helps you compare Medicare Advantage and Medicare Supplement (Medigap) plans as you consider your coverage options. If excess charges have raised questions about Original Medicare, understanding how these plan types differ can help you decide what to explore next.

Medigap may be relevant if you want to understand coverage for Part B excess charges. Medicare Advantage Plans offer a different way to receive Medicare coverage. Compare plan benefits and how they fit your healthcare needs. The agency also offers Medicare Part D Plans for prescription drug coverage.

For help reviewing your Medicare plan options, book a free consultation with The Modern Medicare Agency.

Make your next Medicare decision with confidence

Understanding Medicare excess charges can help you ask clearer questions. Next, connect that knowledge to the coverage you want. Consider what matters most: access to particular providers, potential out-of-pocket costs, or how well your coverage fits your needs. These priorities can guide a focused conversation without requiring you to sort through every plan detail at once.

The Modern Medicare Agency helps you compare Medicare Advantage, Medicare Supplement, and Part D plans. Bring your questions and the details you want to compare to a free consultation. Personalized guidance can help you focus on the points that matter as you decide what to explore.

Contact The Modern Medicare Agency to discuss your Medicare coverage questions. You can take the next step at your own pace, with a clearer sense of what you want from your coverage.

Frequently Asked Questions

What is a Medicare excess charge?

A Medicare excess charge is an additional amount a non-participating provider may bill for a covered Part B service. It applies when the provider hasn’t opted out of Medicare but doesn’t accept assignment for that service. For example, if you see an extra line on a bill, compare it with the Medicare-approved amount and the provider’s assignment status. That helps distinguish an excess charge from regular cost-sharing.

How much can a doctor charge above the Medicare-approved amount?

A doctor may charge an excess amount of up to 15% of the applicable Medicare-approved amount. That limit applies to the excess charge, not your full bill. For a non-participating provider, the approved amount is lower than the amount Medicare would approve for a participating provider, so don’t assume the total bill equals 115% of the participating-provider amount. Check which approved amount the bill uses.

Which providers are allowed to bill Medicare excess charges?

A non-participating provider who hasn’t opted out of Medicare may bill an excess charge for a service when they don’t accept assignment. The provider can accept Medicare without agreeing to accept its approved amount as full payment for every service. Some services require assignment even from non-participating providers, including Medicare-covered ambulance services. A provider who has opted out is different: Medicare doesn’t pay for that provider’s services.

What does it mean when a doctor does not accept Medicare assignment?

It means the doctor hasn’t agreed to accept Medicare’s approved amount as full payment for the service. The doctor may ask you to pay the full bill at the time of care and may or may not file the claim with Medicare. If the doctor doesn’t file it, you must submit the claim yourself. Keep the bill and service information together to support your claim.

Which states prohibit or limit Medicare excess charges?

Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont prohibit excess charges for care received in the beneficiary’s home state. Some states instead set a lower limit. For example, New York caps charges at 5% for services covered by its rule, while certain other services face the federal 15% cap. Home-state protections may not apply to care received elsewhere.

Do Medicare Supplement (Medigap) plans cover Part B excess charges?

Some Medicare Supplement plans cover Part B excess charges, but the benefit depends on the plan letter. This coverage is separate from Medicare’s payment for a covered service. When reviewing an existing policy, look for its excess-charge benefit rather than assuming every Medigap plan handles the bill the same way. Both the provider’s billing status and your plan’s benefits matter.

Which Medigap plans cover Medicare Part B excess charges?

Medigap Plans F and G cover Part B excess charges; Plan N doesn’t. Plan F is available only to people who were eligible for Medicare before January 1, 2020. For instance, someone comparing Plan G with Plan N should pay attention to this difference, especially if they want a plan that covers excess charges. Review the plan letter and benefit details together.

How can I avoid or dispute a Medicare excess charge?

To avoid excess charges, use Medicare-approved providers who accept assignment. If you dispute a charge, gather the bill, Medicare-approved amount, and service code, then contact your Medicare carrier. If the provider didn’t file the claim, submit it to Medicare and, if you have one, your Medigap plan. These records help connect the disputed amount to the service.

Paul Barrett

Article by

Paul Barrett

Paul Barrett, CMIP is the founder of The Modern Medicare Agency, an independent Medicare-only brokerage based in Melville, NY. With 18 years of Medicare-exclusive experience, a CMIP designation, and more than 5,000 clients served across 37 states, Paul is one of the most credentialed independent Medicare specialists on Long Island — and one of the most direct.

He represents 40+ carriers with no quotas and no allegiances, which means his recommendations are based entirely on what fits each client's specific situation. He is the author of Medicare Mastery Unlocked and host of the Wise Guys Retirement Talk podcast. His content is grounded in primary sources, real carrier intelligence, and 18 years of watching what happens when people get Medicare right — and when they don't.

📞 631-358-5793 | paulbinsurance.com

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.

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