Medicare is an important benefit to millions of retired Americans. If you’re retired, or about to retire, you’ve likely considered what Medicare will cover you for. However, it can be just as important to plan for what Medicare doesn’t cover. By reviewing these gaps in coverage, you can make a smart plan for your retirement, and enjoy a vibrant life in your golden years.
The most basic rule to remember, whether you’re thinking about Medicare Part A or Part B, is that Medicare will only cover procedures that are medically necessary and Medicare-approved. So, unless you’re receiving treatment for a Medicare-approved clinical trial, experimental treatments and procedures won’t be covered.
The same goes for cosmetic procedures; Medicare won’t cover them. However, some elements of cosmetic surgery may be covered if it’s necessary as part of regular treatment for a medically necessary condition. This is extremely rare.
While there are proposals under consideration to cover these three services, they are not currently covered by Original Medicare. Medicare will cover certain elements of vision care related to eye health, like glaucoma or macular degeneration; it won’t cover basics like vision exams, eye glasses, and contacts.
Likewise, Medicare will only in very rare cases cover dental procedures. The exceptions include if dental issues need to be repaired to treat a Medicare-covered condition, like with certain cancers of the mouth.
Medicare won’t cover hearing exams, hearing aids, or hearing aid batters.
Neither Part A nor B will cover prescription drugs in most cases. There are a few very rare exceptions, but you should plan on having your medication needs covered by either a Part D Prescription Drug Plan (PDP) or a Medicare Advantage Prescription Drug Plan (MAPD). Both of these health plans are provided by private insurance companies, and are not available from government-sponsored Medicare.
Another benefit that Medicare doesn’t cover is travel outside the United States. The only rare cases of coverage outside the US are when you’re traveling to or from Alaska, or if you are in a remote region of the US where the closest emergency facility is in Canada.
If you want coverage for international travel, you’ll need to either purchase special coverage, or find a Medicare Supplement Insurance or Medicare Advantage plan with international coverage. In The case of Medicare Supplement or Medicare Advantage, most plans will only cover emergency situations, and you may be required to pay some of the costs (typically 20% in the case of Medicare Supplement Insurance).
Medicare also won’t help you pay for custodial care, or costs associated with activities of daily living. This includes room and board in places like nursing homes or assisted living facilities. Medicare Part A will cover 20 days of skilled nursing under your Part A deductible ($1,484 for 2021). For days 21-100, Medicare will cover your skilled nursing stay for a daily co-payment of $185.50 per day. Medicare provides no coverage at all beyond 100 days. Keep in mind that while Medicare will pay for medically necessary care you receive in these facilities, it won’t pay for you to stay or live in them on a permanent basis.
The lack of long term care coverage in particular is a burden since Medicare Supplement (Medigap) and Medicare Advantage plans also don’t cover custodial care beyond medically necessary skilled nursing. If you’ve known someone who needed long term care, you’ve seen first-hand the stress making these arrangements can cause. Unfortunately, needing long term care isn’t a remote possibility; according to a Genworth Financial study, seven out of ten people will need long term care at some point in their lives. Given the likelihood that you’ll need this care, the cost of it, and the almost non-existent coverage provided by Medicare, you’ll need to make a plan to cover the cost of long term care.
Original Medicare, Parts A, and B don’t pay 100% of your health care expenses. Instead, you’re responsible for various payments depending on the specific service or procedure you receive.
For Part A, there are two main types of out of pocket cost:
You will have to pay the Part A deductible before Medicare begins paying for your hospital stay.
For Part B, there are three main kinds of out of pocket costs:
With Part B, your biggest out-of-pocket expense will probably be the 20% co-insurance. You’ll pay this amount on every Part B service or procedure you receive during the year.
The biggest point to remember is that with Original Medicare, Parts A, and B, there is no cap on your out-of-pocket costs. They are theoretically unlimited, and they can be quite high for certain illnesses like cancer.
While some of these gaps are pretty big, and potentially expensive, you have a number of private options to help close them and protect yourself from high out of pocket costs.
To protect yourself from the high cost of custodial or nursing home care, you have a number of options for Long Term Care Insurance. It’s also possible to get help paying for this from your State’s Medicaid program.
Medicare Advantage plans are an alternative to Original Medicare that combines Part A and B. They also frequently add Part D prescription drug coverage. With Medicare Advantage coverage, you’ll pay small co-pay or co-insurance when you receive services or procedures. Another big benefit of Medicare Advantage plans is that they offer out-of-pocket maximum protection. Every Medicare Advantage plan has a limit on your spending; you’ll never pay more than the out-of-pocket maximum in any year.
Medicare Advantage plans also frequently offer coverage beyond what’s available from Original Medicare. These Extra Benefits often include:
Medicare Advantage plans often require you to use a network of providers and require referrals, but they tend to be low cost in terms of premium.
Another private option to lower your out-of-pocket spending is Medicare Supplement Insurance. Medicare Supplement, or Medigap, Insurance comes in ten standardized “Plans” known by letter: A, B, C, D, F, G, K, L, M, and N.
Medigap plans work with Original Medicare by covering most or all of your required cost-sharing. In other words, Medicare is your primary insurance, and Medicare Supplement Insurance acts as secondary coverage, filling in the gaps for you.
While Medigap is usually more expensive than Medicare Advantage, it frequently offers more protection from out-of-pocket spending and allows you to see any medical provider in the nation, as long as they accept Medicare patients. Medigap is the most flexible private coverage available. However, Medigap doesn’t cover prescription drugs, so you’ll have to get a standalone Prescription Drug Plan for your medication needs.
While there are many gaps in Original Medicare, you have good options to protect yourself. Finding the right fit can be intimidating, though. If you’d rather work with a professional, reach out to Texas Medicare Advisors today. We can help you find the plan that fits your needs and your budget. Call 512-900-3008 today for a free consultation.
To help cover the costs of Medicare, insurance companies offer standardized Medicare Supplement Plans. There are ten available plans, which help to pay for your out-of-pocket expenses from Part A and Part B.
These expenses can include:
Are you having trouble choosing a plan? We can help. Call the Texas Medicare Advisors at 512-900-3008.
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