Don't let these health care costs catch you off guard in retirement.
Karla Bowsher • March 1, 2020
Turning 65 brings access
to senior discounts
galore, but there is no benefit of senior citizenship quite like
Medicare.
The federal program
extends subsidized health insurance primarily to folks age 65 and older. But,
while Medicare coverage comes with
numerous freebies, it is hardly free.
Medicare beneficiaries
pay into the system via taxes withheld from their paychecks during their
working years. Additionally, Medicare coverage is not all-inclusive:
Beneficiaries must cover all or part of certain medical expenses.
If you are already on
Medicare, you already know that — perhaps painfully well. But the costs
associated with coverage can come as a surprise to folks who have yet to sign up for
Medicare.
So, here’s a look at some
of the most expensive, most common and most surprising health care costs that
Medicare does not cover.
First, though, note that
your out-of-pocket costs under Medicare will vary depending on your coverage
type. When enrolling in Medicare, you’ll choose between two main types of
Medicare:
·
Original Medicare (aka traditional Medicare), which is offered
directly by the federal government’s Medicare program
·
Medicare Advantage plans (aka Medicare Part C plans), which are
offered by private insurers that are approved by the Medicare program
Medicare Advantage
plans must cover all
the same services that Original Medicare covers. Some Medicare Advantage plans
cover other expenses, too. So, as you read on, remember that some of the
following costs may not apply with certain Medicare Advantage plans.
1. Premiums
You might be surprised to
learn that even federally subsidized health insurance can have premiums, but
that is the case with Medicare.
For 2020,
the monthly premium for Part B — the component of Medicare plans that primarily
covers services you receive outside of a hospital — is $144.60 or more,
depending on your income.
Usually, the Part B
premium is deducted from your Social Security benefits check.
Seniors with Medicare
Advantage usually pay a premium for
their plan in addition to the standard Part B premium.
One bit of good news: A
vast majority of seniors do not pay a premium for Medicare Part A, which covers
inpatient hospital services, as we reported in “3 Big Medicare
Costs Just Got Bigger.”
How to lower your costs: The
Part B premiums are fixed. There’s nothing you can do about them.
If you have Original
Medicare, you have the option to buy a supplemental Medicare health insurance
plan, also known as a Medigap plan, which would pay for some expenses that
Original Medicare does not cover.
The Part B premium isn’t among the
costs that Medigap plans cover, though. So, if you bought a Medigap plan, you
will still have to pay the Part B premium — plus the Medigap
plan premium.
Still, a Medigap plan is
worth the extra cost in some cases — especially if you were to face big medical
bills. To learn more, see “How to Pick the
Best Medicare Supplement Plan in 4 Steps.”
2. Long-term care
Long-term care refers
to medical and nonmedical services for people who are unable to perform basic
daily tasks like dressing or bathing on their own.
You may receive long-term
care in your home, in the community or at an assisted living facility or
nursing home.
Like most health
insurance plans, Medicare generally does not cover long-term care costs, which
are notoriously high.
The national median cost
of long-term care ranges from $1,625 per month for adult day health care at a
community or assisted living facility, to $8,517 per month for a private room
at a nursing home, according to the
2019 Genworth Cost of Care Survey.
How to lower your costs: Start
by considering long-term care insurance. For help determining whether it would
be a smart buy for you, check out Money Talks News founder Stacy Johnson’s
advice in “Should I Buy
Long-Term Care Insurance?”
3. Dental care
Some Medicare Advantage
plans may cover some dental services. It depends on the specifics of the plan.
Original Medicare
does not cover most
dental care, procedures or supplies — including:
·
Cleanings
·
Fillings
·
Tooth extractions
·
Dentures
·
Dental plates
·
Other dental devices
There are some
exceptions. For example, Original Medicare covers certain dental services that
you get while in a hospital. But aside from exceptions, seniors on Original
Medicare plans are stuck paying for 100% of their dental expenses.
How to lower your costs: Check
out “5 Ways to Slash
Dental Care Costs.”
4. Hearing aids
Some Medicare Advantage
plans may pay for hearing aids, but Original Medicare doesn’t cover them.
So, if you have Original
Medicare, you are responsible for 100% of the cost of hearing aids themselves
and exams to fit hearing aids.
Original Medicare
generally does cover 80%
of the Medicare-approved cost of diagnostic hearing exams —
meaning those that a health care provider orders to determine whether you need
medical treatment. The patient or the patient’s Medigap plan pays the other
20%, though a deductible applies.
How to lower your costs: Check
out “How to Save
Hundreds of Dollars on Hearing Aids.”
5. Routine vision care
Some Medicare Advantage
plans cover some vision-related expenses, but Original Medicare does not cover routine
eye exams for eyeglasses or contact lenses. So, 100% of their cost is on you.
More bad news: Original
Medicare typically does not cover eyeglasses
or contact lenses.
Original Medicare does
cover eye exams for patients with diabetes. It also covers tests for glaucoma
and macular degeneration. It even covers artificial
eyes that your doctor orders. So, a senior on Original Medicare is responsible
for only 20% of such expenses, after a deductible.
How to lower your costs: Check
out “4 Steps to
Finding Stylish and Cheap Eyeglasses.”
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