Medicare Doesn’t Cover Everything

Medicare doesn’t cover everything. Avoid surprise bills. 

The average couple retiring today at age 65 will spend an estimated $325,000 on health care during the remainder of their lives. 

For example, many people signing up for Medicare don’t realize the budget-busters that come with the gaps in Medicare coverage. Dental care and hearing aids are generally not covered. Neither is care received overseas, long-term care, and routine vision. Even the difference between being kept at the hospital for observation instead of being admitted as a patient can result in surprise costs. 

Medicare coverage explained

Each day in the United States, about 10,000 baby boomers celebrate their 65th birthday. Their gift from Uncle Sam is Medicare. After years of paying payroll taxes, many new enrollees are surprised to discover that basic Medicare does not cover a variety of health-care expenses that can hit retirees pretty hard. In fact, Medicare only covers about 80% of approved services. To cover the gaps in Medicare, paying out of pocket or buying additional insurance are their options. 

Here are some common things basic Medicare does and does not cover and how to prepare. 

The ABCs (and D) of Medicare. 

Basic or original, Medicare consists of two parts: Part A and Part B

Part A provides coverage for hospital stays, skilled nursing, hospice, and some health services. Most people pay nothing for Part A. However, it comes with a deductible of $1,340 per benefit period and has annual caps on benefits. A Medicare Supplement can cover this deductible and eliminate caps on benefits. 

Part B coverage kicks in when you visit a doctor or receive other outpatient services and also covers medical equipment. The monthly premium for Part B is based on income. If you earn more, you’ll pay more (see chart below). It also comes with a $198 deductible. After it’s met, you typically pay 20% of covered services unless you have a Medical Supplement that covers all or some of that 20%. 

Basic Medicare (again, Parts A and B) does not cover prescription drugs, although you have the option of getting coverage when you first sign up for Medicare. If you choose not to and change your mind later, you’ll likely pay a life-lasting penalty. You can get this coverage either through a standalone prescription drug plan (Medicare Part D) or through a Part C plan, which is also called a Medicare Advantage Plan.

Teeth, eyes, and ears

Generally speaking, Original Medicare does not cover dental work and routine vision or hearing care. This means that it does not cover dentures, which can run anywhere from about $1,000 to north of $5,000 for a complete set. While a routine clearing and X-ray could set you back about $200 and a filling runs about $150 or $200, a single tooth implant can be upward of $4,000. However, if a dental condition involves an emergency or complicated procedure, it could be covered. The same goes for routine vision checks. If you need glasses, it’s generally not covered. However, if you have an eye condition like glaucoma or cataracts, basic Medicare will cover your care. 

If you decide to go with an Advantage Plan, there’s a good chance you either choose this type of plan because dental and vision will be included. However, it is much more limited coverage than expected. Whether you choose an Advantage Plan or stick with Orginal Medicare and a Medicare Supplement, you can purchase a separate policy that gives you more extensive coverage. 

Standalone vision plans can cost about $10 a month, and dental plans could run somewhere in the neighborhood of $30 to $50 a month, depending on how much coverage you choose to get. 

Some of these dental vision plans add in hearing coverage, usually, they only pay up to $500. Hearing aids can run anywhere from $1,000 to $4,000 or so. Your need for additional coverage may not be necessary. 

For those of you who are jet setters, Medicare generally does not cover care you receive outside the United States unless it’s an emergency. To avoid out-of-pocket expenses, you can look into travel-medical policies specifically targeted at the 65-and-over crowd. If you choose to go with just basic Medicare (Parts A and B) instead of an Advantage Plan, you have the option of purchasing a Medigap policy that includes coverage while traveling. 

The most popular Medigap plan runs about $159 to $236 for a 65-year-old male, according to the American Association for Medicare Supplement Insurance. In general, Medigap plans cover the cost of deductibles or coinsurance associated with basic Medicare. Some of them also over coverage during overseas travel, with a cap of $50,000. You also can purchase a standalone plan in addition to Medigap if you anticipate that cap being too low. 

Long-term care

In general, Medicare does not cover long-term care, it includes things like daily help with bathing and eating. There are insurance policies that cover it, although they can be pricey. 

Observation vs. admission 

If you end up in the hospital, make sure you know whether you have been admitted or are there for observation. It can make a big difference in what Medicare pays for your after-care which could involve skilled nursing. Skilled nursing care is covered through Medicare Part A if you have been admitted to the hospital for at least three days. However, if the hospital keeps you there for observation instead of admitting you, your rehab woll not be covered. 

“Observation is considered outpatient,” more often than not clients are reporting aftercare issues because they are admitted as inpatient. In some cases, the hospital won’t admit you even if you ask them to. 

There are hospital indemnity plans that can cover up to $600 per day for a set number of days. Depending on your coverage, they can run about $35 a month and higher and offer coverage in situations like these. Medicare also generally does not cover acupuncture, cosmetic surgery, or routine foot care. 

Conclusion: 

Overall, the important thing is to head into your Medicare years armed with knowledge so you can avoid surprises. Everyone’s situation is a little different. If you can plan in advance, you’ll be able to make sure you have the coverage you need when Medicare takes effect.