Switching to Medicare from a traditional employer’s health insurance plan can be a little unnerving at first. There are things that Medicare does cover, however, there are also things that it doesn’t. Let’s start with understanding Original Medicare or Traditional Medicare, known as Medicare Parts A and B. They cover a fair amount of medical expenses once people turn age 65. Part A is all about hospital insurance when you are an inpatient, part of your stay in a skilled nursing facility, surgery, hospice care and some (but not all) health care provided at home. Part B is your medical insurance that helps pay for doctors’ visits, outpatient care, some preventive services and some medical equipment and supplies. Most seniors can enroll in Medicare three months before the month they turn 65.
As mentioned, Medicare doesn’t cover everything, and Kiplinger’s article, “7 Things Medicare Doesn’t Cover,” takes a closer look at what isn’t covered, plus information about supplemental insurance policies and strategies that can help cover the additional costs, so you don’t wind up with unanticipated medical bills in retirement.
Prescription Drugs. Medicare doesn’t provide coverage for outpatient prescription drugs. However, you can purchase a separate Part D prescription-drug policy for that or a Medicare Advantage plan that covers both medical and drug costs. You can sign up for Part D or Medicare Advantage coverage, when you enroll in Medicare or when you lose other drug coverage. You can switch policies during open enrollment each fall.
Long-Term Care. Medicare provides coverage for some skilled nursing services but not for custodial care. That includes things like help with bathing, dressing and other activities of daily living. However, you can purchase long-term care (LTC) insurance or a combination long-term-care and life insurance policy to cover these costs.
Deductibles and Co-Pays. Part A covers hospital stays and Part B covers doctors’ services and outpatient care. Nonetheless, you have to pay out-of-pocket for deductibles and co-payments. Note, over your lifetime, Medicare will only help pay for a total of 60 days beyond the 90-day limit(“lifetime reserve days”). After that, you’ll pay the full hospital cost. Part B typically covers 80% of doctors’ services, lab tests and x-rays. However, you must pay 20% of the costs after a $183 deductible (in 2018). A Medigap (Medicare supplement) policy or Medicare Advantage plan can fill in the gaps, if you don’t have the supplemental coverage from a retiree health insurance policy. If you purchase a Medigap policy within six months of signing up for Medicare Part B, insurers can’t reject you or charge more because of preexisting conditions. Medicare Advantage plans have medical and drug coverage through a private insurer. They may also provide additional coverage, like vision and dental care. You can switch Medicare Advantage plans annually in open enrollment.
Most Dental Care. Medicare will not provide coverage for routine dental visits, teeth cleanings, fillings, dentures or most tooth extractions. There are Medicare Advantage plans that cover basic cleanings and x-rays, but they usually have an annual coverage cap of about $1,500. You could also get coverage from a separate dental insurance policy or a dental discount plan.
Routine Vision Care. Medicare doesn’t cover routine eye exams or glasses (exceptions include an annual eye exam, if you have diabetes or eyeglasses after certain kinds of cataract surgery). However, some Medicare Advantage plans give you vision coverage, or you may be able to purchase a separate supplemental policy that provides vision care alone or includes both dental and vision care. If you saved money in a health savings account before you enroll in Medicare, you can use the money tax-free at any point for glasses, contact lenses, prescription sunglasses and other vision care out-of-pocket expenses.
Hearing Aids. Medicare doesn’t cover routine hearing exams or hearing aids, but some Medicare Advantage plans cover hearing aids and fitting exams, and some discount programs provide lower-cost hearing aids.
Overseas Medical Care. With a few exceptions, Medicare does not pay for care you receive when outside of the country. The exceptions are few and far between, like if you were on a cruise ship, and then only if you are within six hours of a U.S. port. There are Medigap plans that will cover 80% of the cost of emergency care abroad with a lifetime limit of $50,000. Those are parts C-G, M and N. It is also possible to purchase select Medicare advantage plans to cover emergency care while overseas. You can also buy a travel insurance policy to cover some medical expenses, while outside of the United States. However, shop wisely for these policies, since there can be strict limits on what they actually pay.
The key to navigating Medicare is to start early, don’t wait to figure out what coverage you will need in the months leading up to your enrollment, you preemptively plan for your retirement and that should include Medicare planning. Working with a financial advisor and estate planning attorney can help you adequately prepare for whatever life will throw at you financially and medically.
Reference: Kiplinger (May 23, 2019) “7 Things Medicare Doesn’t Cover”