Original Medicare, Part A and Part B, cover a large portion of your medical expenses after you turn age 65. Most people can start signing up for Medicare three months prior to their 65th birthday. Part A (hospital insurance) helps pay for inpatient hospital stays, stays in skilled nursing facilities, surgery, hospice care, and even some home health care. Part B (medical insurance) helps pay for doctors’ visits, outpatient care, some preventive services, and some medical equipment and supplies. However, Medicare Part A and B can leave some significant gaps in your health-care coverage. Here are 5 things Medicare doesn’t cover, plus some information about supplemental insurance policies that can help cover the additional costs.
1.) Prescription Drugs
Part A and Part B do NOT cover outpatient prescription drugs, but you can purchase a separate Part D prescription drug policy that does, or you can purchase a Medicare Advantage plan (some Medicare Advantage plans are zero premium) that covers both medical and drug costs. You can sign up for a Part D or Medicare Advantage plan when you enroll in Medicare or when you lose other drug coverage, such as an employer plan. You can change Prescription Drug and Medicare Advantage plans during annual enrollment (October 15th – December 7th) each year.
2.) Long-Term Care
One of the largest potential expenses in retirement is long-term care. The average cost of a private room in a nursing home on average is $8,517 per month and in-home care could cost $4,385 per month. Medicare provides coverage for some skilled nursing services but not for custodial care, such as helping with bathing, dressing and other activities of daily living. To protect yourself in the future, you can purchase a long-term-care policy or a variable annuity policy with a long-term care rider to cover these costs.
3.) Deductibles and Co-Pays
Part A covers hospital stays and Part B covers doctor services and outpatient care, but you are responsible for deductibles and co-payments. In 2020, you will have to pay a Part A deductible of $1,408 before coverage kicks in. Part A inpatient hospital deductible covers beneficiaries’ share cost for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. In 2020, beneficiaries must pay a coinsurance amount of $352 per day for days 61-90 in the hospital and $704 a day for lifetime reserve days.
For skilled nursing facility stays, the rules are a little different. There’s no copayment for 20 days, but for days 21 through 100, you’ll pay $176 per day. After day 100, you’re responsible for all your costs.
Part B covers 80% of doctor services, lab test and x-rays, but you’ll have to pay 20% of the cost after a $198 deductible in 2020. A Medigap (Medicare Supplement) or Medicare Advantage plan can help fill in the gaps. There are 10 different types of Medigap plans that pick up were Medicare leaves off. In some states, if you purchase a Medigap policy within six months of signing up for Medicare Part B, then insurers can’t reject you for pre-exiting conditions. Medicare Advantage plans provide both medical and drug coverage through a private insurance company, and they may also have additional benefits such as vision and dental care.
4.) Dental, Vision, and Hearing
Medicare does not provide coverage for routine dental visits, teeth cleaning, fillings, dentures or most tooth extractions. They do not cover routine eye exams or glasses (exceptions include an annual eye exam if you have diabetes or eyeglasses after having certain kinds of cataract surgery). Medicare does not cover routine hearing tests or hearing aids.
Some Medicare Advantage plans cover dental services, basic cleanings and x-rays, but they usually have an annual coverage cap of around $1,000. Medicare Advantage plans also have some basic vision and hearing benefits, but you could purchase a stand-alone plan that helps with the cost of these services.
5.) Medical Care Overseas
Medicare does not cover care you receive when traveling outside the United States. Medigap plans, C, G, M, & N cover 80% of the cost of emergency care abroad, with a lifetime limit of $50,000. Medicare Advantage plans cover emergency care abroad. Or you could buy a travel insurance policy that covers some medical expenses while you’re outside of the U.S. It may even cover emergency medical evacuations, which can otherwise cost tens of thousands of dollars to transport aboard a medical plane or helicopter.
Original Medicare covers a large portion of your medical expenses, but it is still a good idea to get additional coverage, so you are not stuck with large medical bills. Are you approaching your 65th birthday or do you already have a Medigap or Medicare Advantage policy and are looking for a dental, vision, hearing or long-term care policy? Contact Hovis & Associates today. We have Medicare Consultants to help you understand your current benefits or help you to enroll in the right plan. We make the complicated simple!