what does medicare really pay for if you also have a medicare supplement, why two premiuns?

Answer 1

This is from the experience of dealing with my mother's bills. Medicare has a base schedule of prices that they pay for just about everything, it is long and complicated, but then medical billing is, fixing humans isn't like fixing Barbie dolls.

The hospitals and doctors pack a high price for their services to cover those who don't have insurance and are at risk to stiff them for the bill. (Stores do the same, with hidden costs such as "shrinkage" where the pilfering is figured into the price and allowances for bad returns in their accounts receivables for defaults in payment--stores usually get most of their money for their goods though).

The hospitals and doctors also pack in a different sort of shrinkage for the game that gets played with the supplement. For instance, my mother had a doctor's visit. She was billed $200 for the consultation. Medicare paid something like $30, leaving $170. Her supplement paid something like about $40 and "negotiated" the forgiveness of the balance. We all know that there wasn't any negotiation beyond her supplement sending a note that $40 is all they were going to pay, a sort of 'take it or leave it' deal.

Now if she had gone in without insurance, then mom would have had to do her own negotiating and probably be charged between $100 to the whole balance. If she just had the medicare, she would have had to pay about $30 less, but she still wouldn't have "negotiated" with the clout of the big insurance agent, the doctor or whomever would have referred her to a collection agency if she didn't make arrangements to pay.

Your supplement is generating part of the shrinking in the process, but you are on the beneficial side if you've got it. It does seem like a rip-off, but grit your teeth and pay it, it will cost an arm and a leg if you don't.

Answer 2

The supplement insurance pays what medicare doesn't. For example, medicare receives a bill for $100, if the provider is a medicare participate they must accept what medicare will pay for according to a pay scale set by medicare. If medicare scale for the $100 is $40 then medicare pays 80% of the $40 and the remaining 20% of the $40 is paid by your supplemental or secondary insurance. If you do not have the insurance you must pay the remaining 20%. 20% may not seem alot but if you have very large med bills (like for hospitalization or operations etc.) the 20% can be a rather large amount to pay out of pocket. The secondary ins may seem a bit expensive, but I wouldn't go without it. (unless you are VERY RICH!) A secondary ins premium is not as high as the premium for private ins. My husband has Medigap from Blue Shield of PA and pays about $147/month. There are some reasonable medicare supplements offered, like through AARP. It's a good idea to shop around a bit before buying the insurance.