Before diving into the deep waters of California Medicare supplement options, it helps to have a good understanding of what the Medicare program itself covers. It\’s hard to know how the California Medigap plans work without first explaining the \”gaps\” in the original Medicare plan itself. Part B is sure to come up in this discussion so let\’s take a look at how Part B in traditional Medicare is used to cover the cost of physicians.

Medicare loves it\’s letters. Part A, Part B, C plans, F plans, etc. It\’s a veritable alphabet soup of terminology. Don\’t let that scare you away. We\’ll break down each piece of California Medicare and address how the plans work (and don\’t work) to your advantage. We\’re now on Part B. First a little history lesson (we promise it\’ll be short). Original Medicare reflects the time in which it was developed which was decades ago. In those days, they divided costs along two main categories…hospital costs (which is Part A of Medicare for Californians) and Doctor costs (which is Part B). Obviously, Part A was and is where the big bills could truly hit since facility based care is much more expensive but we can\’t completely dismiss doctor costs. Part B is important. So how does traditional Medicare for Californian\’s treat these doctor costs?

As with most things Medicare, you have a deductible and a co-insurance for Part B in California. The deductible is scheduled to go up over time (with inflation in theory) and you can find the current deductible at our annual California Medicare deductible/premium page. It\’s $162 for 2011. This means that you will pay the first $162 in a calendar year for doctor costs. After you meet the $162 out of pocket, you will pay 20% of the remaining charges for the rest of the calendar year. This is pretty standard treatment for Medicare benefits. Obviously, the real risk is with the 20% charges since they do not cap in a calendar year but we\’ll discuss how to cover or offset this risk with the right California Medicare supplement plan. The next topic is to describe what exactly we mean by \”doctor costs\” which carries an air of vagueness about it.

The best way to address what is covered by Part B for California Medicare is to talk about what isn\’t covered. We\’ll give you the list but really, it\’s covered benefits that are not performed in a facility. If the treatment is handled in a hospital, it\’s probably under Part A. If the treatment is handled out of a doctor\’s office or outpatient lab, it\’s probably under Part B. A big and expensive question is that of x-rays, MRI\’s, and other more involved labs. This is not covered under Part B in most cases so be advised that the more expensive hospital deductible of Part A will likely apply. Really, the deductible amount is what matters when comparing Part A versus Part benefits since they will both cover 80% after the deductible is met. It does matter, however, when choosing your California Medicare supplement plan.

Some of the California Medigap plans will cover the A deductible while others will not. The same is true for the Part B deductible. To avoid the headaches of deciphering which Part a particular benefit falls under, we recommend looking at the F plan (along with other reasons). The F plan will cover Part B deductible and co-insurance. It will also cover excess which is the additional amount (up to 15%) that providers can charge for Part B costs. The cost different between the California F Medigap plan and the lower plans which do not cover excess (and or deductibles) rarely justifies taking on the additional risk especially since excess has no ceiling and can continue indefinitely. You now have a good base understanding of how Part B works and more importantly, how it works with the California Medigap plans to your advantage (hint hint…it\’s the F plan).