Today we’re going to talk about how to cover Medicare excess charges. If you’ve never heard of Medicare excess charges, don’t worry. We’re going to briefly explain what they are, then teach you how to eliminate them for good. Let’s get started.
The Hidden 15 Percent Risk
Most people assume Medicare works like employer insurance: you get care, Medicare pays its share, and your out-of-pocket costs are predictable. Unfortunately, that’s not always true.
One of the most overlooked costs in Original Medicare is Medicare excess charges—a hidden expense that can permanently increase what you pay for care. Many people don’t realize these charges exist until they see a larger-than-expected bill after a doctor visit or procedure.
Medicare excess charges can apply every year, have no annual cap, and aren’t automatically covered unless you choose the right supplemental coverage.
This guide explains:
- What Medicare excess charges are
- How Medicare Part B excess charges work
- Who can charge them
- Which plans eliminate them permanently
Once you understand the risk, you can decide whether it’s one you’re comfortable taking.
How Original Medicare Part B Pays for Services
To understand excess charges, you first need to understand how Original Medicare Part B pays providers.
The Medicare-Approved Amount
For most outpatient services, Medicare sets a Medicare-approved amount—the standard price Medicare believes is reasonable for a service.
The 80/20 Structure
Under Part B:
- Medicare pays 80% of the approved amount
- You pay the remaining 20% coinsurance
There is no annual out-of-pocket maximum under Original Medicare.
Why This Gap Exists
Medicare allows some providers to bill above the approved amount. That difference is where excess charges come into play—and why this gap matters.
What Are Medicare Part B Excess Charges?
So, what are Medicare Part B excess charges?
Medicare excess charges are additional fees that certain doctors are legally allowed to charge—up to 15% more than the Medicare-approved amount.
Key Rules to Know
- Only physicians (not hospitals) can charge excess charges
- The maximum excess charge is 15%
- Medicare does not pay this extra amount
- You are responsible for paying it in full
Participating vs. Non-Participating Providers
- Participating providers accept Medicare assignment and cannot charge excess fees
- Non-participating providers can charge excess fees
Clarity matters here: what are Medicare Part B excess charges? They’re the extra 15% Medicare doesn’t cap unless you protect yourself.
Real-World Examples of Excess Charges
Let’s make this concrete.
Example 1: No Excess Charge
- Medicare-approved amount: $10,000
- Medicare pays 80%: $8,000
- You pay 20% coinsurance: $2,000
Total cost to you: $2,000
Example 2: With 15 Percent Excess Charge
- Medicare-approved amount: $10,000
- Provider adds 15% excess charge: $1,500
- Medicare still pays: $8,000
- You pay:
- $2,000 coinsurance
- $1,500 excess charge
Total cost to you: $3,500
That extra $1,500 is not capped, not reimbursed, and can happen again and again.
Do Medicare Advantage Plans Have Excess Charges?
No—and this is an important distinction.
Medicare Advantage plans do not use the excess charge structure. Instead, they rely on:
- Provider networks
- Fixed copays
- Prior authorization
While Medicare Advantage has its own tradeoffs, excess charges apply only to Original Medicare with Part B. This structural difference is why excess charges are a Medigap-specific concern.
Which Medigap Plans Cover Excess Charges?
Not all Medicare Supplement (Medigap) plans protect you from excess charges.
Medigap Plans That Cover Excess Charges
- Plan F (only for those eligible before January 1, 2020)
- Plan G (available to new enrollees)
These plans pay 100% of Medicare Part B excess charges.
Medigap Plans That Do NOT Cover Excess Charges
- Plan N
- All other Medigap plans
Why Plan G Is the Top Choice Today
Because Plan F is no longer available to new Medicare beneficiaries, Plan G is now the most comprehensive Medigap plan available for eliminating excess charges permanently.
States That Limit or Prohibit Excess Charges
Some states restrict or prohibit Medicare excess charges entirely.
Important State-Level Considerations
- In restricted states, providers cannot charge excess fees
- However, protections may not follow you out of state
Why Nationwide Coverage Still Matters
If you:
- Travel frequently
- See specialists in other states
- Receive care while relocating
You could still face excess charges outside your home state. Nationwide protection can still be valuable.
Who Should Be Concerned About Excess Charges?
Excess charges don’t affect everyone equally, but they matter more for certain people.
You should pay close attention if you:
- Visit specialists frequently
- Anticipate surgeries or complex procedures
- Do not have Medigap Plan F or Plan G
- Travel often or seek care in multiple states
The more services you use, the more that uncapped 15% can add up.
When Should You Consider Plan G Over Plan N?
This decision comes down to risk tolerance vs. monthly savings.
Cost Predictability
- Plan G: Higher premium, nearly zero surprise costs
- Plan N: Lower premium, but exposure to excess charges and copays
Copay Tradeoffs
Plan N includes:
- Up to $20 office visit copays
- Up to $50 ER copays
- Full responsibility for excess charges
Break-Even Thinking
If Plan N saves $40 per month:
- Annual savings = $480
- One excess charge event could wipe that out
If predictability matters more than squeezing every dollar, Plan G often wins.
FAQs
What are Medicare excess charges?
They are additional fees (up to 15%) charged by certain doctors above Medicare’s approved amount.
How common are Medicare Part B excess charges?
They vary by location and provider, but they are legal and used regularly in some areas.
Can hospitals charge excess charges?
No. Only physicians can charge excess fees.
Does Medicare Advantage charge excess fees?
No. Medicare Advantage uses copays and networks instead.
How do I eliminate excess charges permanently?
Enroll in a Medigap plan that covers them—specifically Plan G (or Plan F if eligible).
Final Thoughts: Eliminate the 15 Percent Risk
Medicare excess charges are one of the few healthcare costs that never cap and never go away under Original Medicare. If you don’t plan for them, they can quietly increase your out-of-pocket expenses year after year.
Medigap Plan G offers lifetime protection against this risk, turning an unpredictable cost into a non-issue. Whether that protection is worth it depends on your health, travel habits, and comfort with financial uncertainty.If you’re unsure how excess charges could affect you, Medicare School can help. Our Learning Center breaks down complex Medicare topics in plain language, and our licensed professionals are available to help you evaluate your coverage options before enrollment—so you can make confident decisions and say goodbye to unnecessary risk for good.