What Federal Annuitants Need to Know About Medicare and Preferred Providers

We rate plan costs based on the assumption that you will always or almost always want to use preferred providers, also known as "staying in the network". However, network problems largely disappear if you have Medicare Parts A and B, since most of the national plans waive most doctor and hospital cost-sharing whether you obtain care in or out of the network. Even in HMOs that don't waive these costs, you can use Medicare to go out of network. Therefore, for annuitants who participate in Medicare Parts A and B preferred provider restrictions largely disappear when enrolled in almost all plans. You can go to any hospital and almost any doctor without penalty. Moreover, persons over age 65 are by law guaranteed a Medicare rate and can use all doctors who have not opted out of Medicare without fearing very high charges, even while enrolled in plans that offer no reduced cost sharing for those with Part B of Medicare.

You should be aware, however, that there are many complexities. For example, some doctors do not accept new Medicare patients, even if the patients are in a plan whose network includes these doctors. Some doctors accept no insurance of any kind. And still others will accept new Medicare patients but do not "take assignment" and have their patients pay in full and submit Medicare claims. In such cases a 15% higher Medicare rate called the "limiting charge" may apply. The great majority of doctors do not present such problems, so your best option will often be to avoid those who do.