Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage. Here's a closer look at what isn't covered by Medicare.
by: the Editors of Kiplinger's Retirement Report October
1, 2020
Medicare
Part A and Part B, also known as Original Medicare or Traditional Medicare, cover a large
portion of your medical expenses after you turn age 65. 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. Most folks can
start signing up for Medicare three months before the month they turn 65.
It's
important to understand that Medicare Part A and Part B leave some
pretty significant gaps in your health-care coverage. Here's a closer look
at what isn't covered by Medicare, plus information about supplemental
insurance policies and strategies that can help cover the additional costs, so
you don't end up with unexpected medical bills in retirement.
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Medicare Doesn't Cover Prescription Drugs
Medicare
doesn’t provide coverage for outpatient prescription drugs, but you can buy a
separate Part D prescription-drug policy that does, or a Medicare Advantage
plan that covers both medical and drug costs. (Some retiree health-care
policies cover prescription drugs, too.) You can sign up for Part D or
Medicare Advantage coverage when you enroll in Medicare or when you lose other
drug coverage. And you can change policies during open enrollment
season each fall. Compare costs and coverage for your specific medications
under either a Part D or Medicare Advantage plan by using the Medicare Plan Finder. Also read How to Save on Prescription Drugs for
more ideas.
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Medicare Doesn't Cover Long-Term Care
One
of the largest potential expenses in retirement is the cost of long-term care.
The median cost of a private room in a nursing home was nearly $102,200 in
2019, according to the Genworth Cost of Care Study;
a room in an assisted-living facility cost $48,612, and 44 hours per week of
care from a home health aide cost $52,624. Medicare provides coverage
for some skilled nursing services but not for custodial care, such as help with
bathing, dressing and other activities of daily living. But you can
buy long-term-care insurance or a combination long-term-care and life insurance
policy to cover these costs. See The Long-Term-Care Insurance Dilemma for
more information about long-term-care insurance and other ways to cover these
costs. See Medicare Rules for Home Health Care for
information about Medicare’s strict rules for covering home health care.
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Medicare Doesn't Cover Deductibles and Co-Pays
Medicare
Part A covers hospital stays, and Part B covers doctors’ services and
outpatient care. But you’re responsible for deductibles and co-payments. In 2020,
you’ll have to pay a Part A deductible of $1,408 before coverage kicks in, and
you’ll also have to pay a portion of the cost of long hospital stays -- $352
per day for days 61-90 in the hospital and $704 per day after that. Be
aware: Over your lifetime, Medicare will only help pay for a total of 60 days
beyond the 90-day limit, called “lifetime reserve days,” and thereafter you’ll
pay the full hospital cost.
Part
B typically covers 80% of doctors’ services, lab tests and x-rays, but you’ll
have to pay 20% of the costs after a $198 deductible in 2020. 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. Medigap policies are sold by private insurers and come in 10
standardized versions that pick up where Medicare leaves off. If you buy a
medigap policy within six months of signing up for Medicare Part B, then
insurers can’t reject you or charge more because of preexisting conditions. See Choosing a Medigap Policy at
Medicare.gov for more information. Medicare Advantage plans provide both
medical and drug coverage through a private insurer, and they may also provide
additional coverage, such as vision and dental care. You can switch Medicare
Advantage plans every year during open enrollment season.
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Medicare Doesn't Cover Most Dental Care
Medicare
doesn’t provide coverage for routine dental visits, teeth cleanings, fillings,
dentures or most tooth extractions. Some Medicare Advantage plans cover
basic cleanings and X-rays, but they generally 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. See Retirees, Create a Plan to Pay for Dental Care for
more information about your options. Another alternative is to build up money
in a health savings account before you enroll in Medicare; you can use the
money tax-free for medical, dental and other out-of-pocket costs at any age
(you can’t make new contributions to an HSA after you sign up for Medicare).
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Medicare Doesn't Cover Routine Vision Care
Medicare
generally doesn’t 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). But some Medicare Advantage plans provide vision
coverage, or you may be able to buy a separate supplemental policy that
provides vision care alone or includes both dental and vision care. If
you set aside money in a health savings account before you enroll in Medicare,
you can use the money tax-free at any age for glasses, contact lenses,
prescription sunglasses and other out-of-pocket costs for vision care.
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Medicare Doesn't Cover Hearing Aids
Medicare
doesn’t cover routine hearing exams or hearing aids, which can cost as much as
$3,250 per ear. But some Medicare Advantage plans cover hearing aids
and fitting exams, and some discount programs provide lower-cost hearing aids. For
more information, see Medicare Doesn’t Cover Hearing Aids But Retirees Have Options.
If you save money in an HSA before you enroll in Medicare, you can also use
that tax-free for hearing aids and other out-of-pocket expenses.
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Medicare Doesn't Cover Medical Care Overseas
Medicare
usually doesn’t cover care you receive while traveling outside of the U.S.,
except for very limited circumstances (such as on a cruise ship within six
hours of a U.S. port). But medigap plans C through G, M and N cover 80%
of the cost of emergency care abroad, with a lifetime limit of $50,000. Some
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. and may even cover emergency medical evacuation, which can otherwise cost
tens of thousands of dollars to transport you aboard a medical plane or
helicopter. For more information see Going Abroad? Check Your Health Coverage.
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How to Look Up What Is and Isn't Covered by Medicare
To
look up Medicare’s coverage rules and other types of care and procedures, go
to Medicare.gov/coverage and
use the “Is my test, item or service covered?” tool. Also see What Original Medicare Covers.
If you believe a claim was unfairly denied, see How to Appeal a Denied Medicare
Claim.
https://www.kiplinger.com/retirement/medicare/601489/7-things-medicare-doesnt-cover
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