Medicare approved amount vs. Medicare paid amount, what's the diff?

JONATHAN B SPARKS

Super Genius
231
Below is from a beneficiary's medicare.gov claims history.

Medicare-approved amount$193,386.20
Medicare paid$44,386.11
You may be billed See Claim

(I don't have the claim)

If Medicare approved $193K, why was only $44K paid? Can you help me understand this better please?

Is it correct that, suspending copays and deductibles and assuming the expense not paid by Medicare was entirely 20% coinsurance, this beneficiary's Medsup paid roughly $11K (20% of the amount Medicare didn't pay of the total paid (roughly 55K))?

I'm guestimating this beneficiary has paid a total of roughly $50K for Plan F over the past 20 years. She's had other medical expenses but, at most, her share of cost with Original Medicare would not have been more than $50K. So, had she invested instead of paying her Medsup premiums she'd be way ahead, especially if she'd had a zero premium MAPD plan with a low MOOP that proved adequate.

Assuming you're in good health when you enroll in Medicare, why not enroll in a MAPD plan and invest what you'd pay for a Medsup? You could "always" drop the MAPD plan (assuming you find it inadequate) and use your investments to cover the OM share of cost. ("Always" meaning: Move out of the network or wait for AEP.)

Risk management is hard, y'all. I could corner the market with a reliable crystal ball.
 
Medicare-approved amount$193,386.20
Medicare paid$44,386.11

Approved amount = gross billed claims approved by Medicare
Paid amount = amount actually paid by Medicare A & B.
The difference is the repricing or "discount"

EDIT - The Medicare Approved Amount is most likely how much the provider BILLED.

Your attempt to justify Medigap vs MAPD is easy in retrospect. You also assume there is equal access to care with MAPD vs original Medicare.

If you want to use this example as a way to convince a T65 that one way is better than the other then you don't understand health care.

The idea of "buy MA and invest the difference" works about as well as "buy term and invest the difference".

Insurance, especially health insurance, is bought on emotion, not numbers.
 
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Thanks!

What's with the discount? If the hospital and doctors charged $193K and Medicare approved it, why would the hospital and doctors offer so great a discount? It's the same with virtually every event in the claims history. What is this nonsense?! It's as though Washington DC has a hand in it!

It's true I have much to learn about healthcare. That's why I'm here. I do understand that MA network restrictions and third party decision makers is obviously inferior to OM except for the cost.

But, isn't it true that many MAPD clients have been satisfied with their arrangement, even those who've had substantial healthcare events? It's not as though every person with MA with serious health issues is dissatisfied, right? Would it be fair to say that most of them are satisfied and some that are not would have received no better care under OM?

If MA plans are as bad as some say, have any carriers ever been sued for denying or delaying service in an unreasonable manner? Does the contract make them immune from civil suits? Given their deep pockets it would seem the attorneys would be lining up to champion any unfortunate MA beneficiary's who've experienced nightmare scenarios I've seen described. Not to mention, isn't customer satisfaction reflected in their star ratings very important to the MA carriers?

I understand that there's a cost to manage risk so, even if a beneficiary never has substantial healthcare events her Medsup premiums were not a waste of money. They served the purpose of addressing risk. But, investments could address that risk too.

There's no way to tell someone that one way is better than another without hindsight or that crystal ball.

David Belk's YT video is what got me thinking in these terms. I just needed some clarity regarding Medsup and the actual amounts one would pay if they had nothing but OM. Thus, the "what's up with Medicare approved vs. Medicare paid nonsense" question.

My referenced beneficiary hasn't had any difficulty shelling out 50K for her Medsup over the past 20 years but, given the financial situation and lack of savings of most Americans these days, I suspect MAPD has a bright future.

I believe Belk is clearly wrong about Part D. Using his logic, it only takes 8.4 years of Part D penalties to reach a break even point and that's if the average premiums never increase.

 
Thanks!

What's with the discount? If the hospital and doctors charged $193K and Medicare approved it, why would the hospital and doctors offer so great a discount? It's the same with virtually every event in the claims history. What is this nonsense?! It's as though Washington DC has a hand in it!

It's true I have much to learn about healthcare. That's why I'm here. I do understand that MA network restrictions and third party decision makers is obviously inferior to OM except for the cost.

But, isn't it true that many MAPD clients have been satisfied with their arrangement, even those who've had substantial healthcare events? It's not as though every person with MA with serious health issues is dissatisfied, right? Would it be fair to say that most of them are satisfied and some that are not would have received no better care under OM?

If MA plans are as bad as some say, have any carriers ever been sued for denying or delaying service in an unreasonable manner? Does the contract make them immune from civil suits? Given their deep pockets it would seem the attorneys would be lining up to champion any unfortunate MA beneficiary's who've experienced nightmare scenarios I've seen described. Not to mention, isn't customer satisfaction reflected in their star ratings very important to the MA carriers?

I understand that there's a cost to manage risk so, even if a beneficiary never has substantial healthcare events her Medsup premiums were not a waste of money. They served the purpose of addressing risk. But, investments could address that risk too.

There's no way to tell someone that one way is better than another without hindsight or that crystal ball.

David Belk's YT video is what got me thinking in these terms. I just needed some clarity regarding Medsup and the actual amounts one would pay if they had nothing but OM. Thus, the "what's up with Medicare approved vs. Medicare paid nonsense" question.

My referenced beneficiary hasn't had any difficulty shelling out 50K for her Medsup over the past 20 years but, given the financial situation and lack of savings of most Americans these days, I suspect MAPD has a bright future.

I believe Belk is clearly wrong about Part D. Using his logic, it only takes 8.4 years of Part D penalties to reach a break even point and that's if the average premiums never increase.


Could you be confusing the billed amount with the approved amount? :)
 
Could you be confusing the billed amount with the approved amount? :)
Yes! That would make more sense. If the providers bill 193 but Medicare only approves 44, that jibes. So, why doesn't is say "Billed amount" instead of "Medicare approved amount?" (That question was rhetorical. I'm pretty sure it has to do with the efficacy of Washington.) Thank
 
Thanks!

What's with the discount? If the hospital and doctors charged $193K and Medicare approved it, why would the hospital and doctors offer so great a discount? It's the same with virtually every event in the claims history. What is this nonsense?! It's as though Washington DC has a hand in it!

It's true I have much to learn about healthcare. That's why I'm here. I do understand that MA network restrictions and third party decision makers is obviously inferior to OM except for the cost.

But, isn't it true that many MAPD clients have been satisfied with their arrangement, even those who've had substantial healthcare events? It's not as though every person with MA with serious health issues is dissatisfied, right? Would it be fair to say that most of them are satisfied and some that are not would have received no better care under OM?

If MA plans are as bad as some say, have any carriers ever been sued for denying or delaying service in an unreasonable manner? Does the contract make them immune from civil suits? Given their deep pockets it would seem the attorneys would be lining up to champion any unfortunate MA beneficiary's who've experienced nightmare scenarios I've seen described. Not to mention, isn't customer satisfaction reflected in their star ratings very important to the MA carriers?

I understand that there's a cost to manage risk so, even if a beneficiary never has substantial healthcare events her Medsup premiums were not a waste of money. They served the purpose of addressing risk. But, investments could address that risk too.

There's no way to tell someone that one way is better than another without hindsight or that crystal ball.

David Belk's YT video is what got me thinking in these terms. I just needed some clarity regarding Medsup and the actual amounts one would pay if they had nothing but OM. Thus, the "what's up with Medicare approved vs. Medicare paid nonsense" question.

My referenced beneficiary hasn't had any difficulty shelling out 50K for her Medsup over the past 20 years but, given the financial situation and lack of savings of most Americans these days, I suspect MAPD has a bright future.

I believe Belk is clearly wrong about Part D. Using his logic, it only takes 8.4 years of Part D penalties to reach a break even point and that's if the average premiums never increase.



1st I have seen this guys videos in the past and he is a joker his logic has always been full of holes and I don't have the patience to watch this one as I know what he is all about

2nd have some been better of with MA sure its a gamble, either way, Each way has its plus and minus

3rd star ratings are not a real reflection of customer satisfaction, That is only one part of the star ratings, Many times there is more satisfaction with a 4 star than a 5 star or a 3 star vrs a 4 star

Many other things factor into star rating too like how many got their physical this year, and other things that make the Govt happy

4th MA is here to stay for sure, Does not make them great, I do believe MA has a place in my tool belt but Med Supp will always be a superior product
 
What's with the discount? If the hospital and doctors charged $193K and Medicare approved it, why would the hospital and doctors offer so great a discount? It's the same with virtually every event in the claims history. What is this nonsense?! It's as though Washington DC has a hand in it!

Repricing has been around for years and predates mangled care and Medicare. Prior to managed care the carriers paid UCR/R&C (usual customary and reasonable or reasonable and customary).

Doc Welby charges $13 for an office visit, carrier reprices to $8. Patient pays the difference.

Providers don't "offer" a discount. The payor offers it on a take it or leave it basis. If the provider wants to be paid by a carrier, Medicare or any other third party then they accept the discount.

You can blame DC for a lot of things but this isn't one of them.

It's not as though every person with MA with serious health issues is dissatisfied, right?

Who said "every person"?

As Seniors Get Sicker, They're More Likely To Drop Medicare Advantage Plans

have any carriers ever been sued for denying or delaying service in an unreasonable manner?

Yes.

Insurers profit from Medicare Advantage's incentive to add coding that boosts reimbursement

David Belk's YT video

He is an ***.
 
Not an agent.

My Medicare eob's for hospital charges were incomprehensible to me. I waited for the medigap eob's to see the right amounts.

Investing the difference may be just as complicated as dealing with medical claims for some and they may not do it for that reason.
 
Thank you! That's good information. I'm still unclear what purpose the "discount dance" serves but at least I know the steps now. I'm a little bummed that free markets are to blame. Although, there's always FDR's wage freeze that made insurance common and, eventually, essential, no? May I pin the blame on FDR? ; )

I don't doubt Belk is in left field regarding insurance. I was trying to form a real world example with historical claims to counter any prospects who share his opinions. That’s when I went down the “approved vs paid” rabbit hole.

Assuming your prospect has no VA or other coverage and is skeptical that they need a Medsup or MA plan, what’s the one thing you tell them to convince them they do? Do you talk about the potential hit of 20% coinsurance? Do you state that X number of Americans go bankrupt each year due to healthcare expense? Does anyone have a reliable number for X?

When a beneficiary is in the hospital and a variety of doctors see her, are all the doctors’ fees under Part B subject to the 20% coinsurance? Which, if any, doctor’s services in the hospital are billed under Part A? For example, is emergency treatment Part B for the attending doctor’s billing purposes?

While I’m taxing your help so much, here’s another unrelated question. If a veteran is happy with The VA, why should he or she pay for Part B? I understand it doesn’t hurt to have broader resources of healthcare but, if The VA is serving them well, is it worth it?

Thanks LD. It seems I'm overthinking some things. I'm still at the stage where I don't know what I don't know or what I don't need to know.

Thanks for all your help. I hope everyone had a great Christmas.
 
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