We\’re blessed in California with not only extensive shoreline and a beautiful State but with an extensive and sophisticated health care infrastructure. Some of the premium hospitals and physicians in the U.S. call California home. Just think of UCLA, UCSF, Stanford, and Cedar Sinai to name a few of the prestigious medical facilities available. This does not even scratch the surface of the broad level of physician expertise that also resides in California. How does all of this work with Medicare and a California Medicare supplement insurance plan. Fortunately, we can report back that it works very well although the future does provide some challenges which we\’ll discuss. Let\’s take a look at doctors and hospitals available with California Medicare supplement plans.

Let\’s start with the basics. First, does California Medicare have a \”network\” of allowed providers be it hospital or physician? The quick answer is yes but it\’s less of a concern than you would think (for now). A California medical provider does need to participate with Medicare. The vast majority of hospitals participate in the California Medicare network. In fact, we have never seen an issue with a facility lacking participation although it\’s always good to check first with a desired facility for non-emergency care. As for California physicians, you\’re more likely to find a doctor not in the California Medicare network than with a facility but it\’s still very unlikely. A physician does need to \”opt in\” and participate with Medicare which among other requirements, dictates an allowed amount that the provider can charge for a given procedure. This is the main means of Medicare to control health care costs as the typical re-imbursement has been estimated to be 60% of what a provider would charge otherwise. There is a wrinkle however with this designated California Medicare negotiated rate and that has an important impact on which California Medigap plan to choose.

California health care providers can choose to charge \”excess\” or up to 15% higher than what Medicare allows for California providers. If the allowable amount is $1000 for a given procedure, the provider that is charging full excess would charge $1150 or an additional $150. That\’s manageable but what if you have a series of expenses that run $10K? Now we\’re looking at an additional $1500 out of pocket. So how important is this with California Medicare providers? It\’s still relatively manageable since most providers will accept Medicare\’s negotiated rate. Unfortunately, this is changing with time as Medicare continues to struggle with finances pointing in the wrong direction. More and more California Medicare providers will likely start to charge the excess to compensate for reduced re-imbursements from the program. Every year, Congress has voted to put off sizeable reductions in California Medicare provider reimbursements but eventually, Congress will be forced to squeeze more out of that side in spite of the political jeopardy this creates. When that happens, more California Medicare doctors will be forced to charge excess.

The F plan is California Medicare supplement insurance plan that covers this excess charge and for that reason, it stands above the beyond the other Medigap plans. The actual California Medigap carriers themselves look to Medicare to establish benefit and provider eligiblity so they will act accordingly in dealing with California health care providers. Occasionally, we have seen California Medigap carriers have slightly different benefits for their own PPO network (such as a small office copay for a limited number of visits) but the trend is towards a uniform network of providers that follow California Medicare\’s dictate.

Dennis Jarvis is a licensed insurance agent concentrating on California Medicare supplement insurance.