A new study details the
uncovered costs retirees face for those services as Congress considers
expanding Medicare Part B to include such coverage.
September 28, 2021 By Mary Beth Franklin
One of the biggest differences
between retirees and pre-retirees is their knowledge about what Medicare covers
— and more importantly, what it doesn’t. Many newly minted retirees are shocked
to learn that traditional Medicare doesn’t
cover dental, hearing or vision services, despite the fact that the need for
that type of care increases with age.
Some beneficiaries in
traditional Medicare may have private coverage for these services, but many do
not.
All-inclusive Medicare
Advantage plans typically include some coverage for dental,
hearing and vision services, but the extent of that coverage and the value of
these benefits varies.
As a result, Medicare
beneficiaries who need dental, vision or hearing care may face out-of-pocket
costs that can run into the hundreds and even thousands of dollars for
expensive dental treatment, hearing aids or corrective eyewear. Many forego
getting the care or treatment they need due to cost. Financial
advisers should be aware of how much money their clients need
to set aside for medical premiums and uninsured expenses each year as health
care costs are often the single largest line items in a retiree’s budget.
A newly
released report from the Kaiser Family Foundation explores the
extent and impact of these coverage gaps just as Congress debates whether and
how to expand Medicare Part B coverage to include dental, hearing and vision
services.
Higher-income
beneficiaries, defined as individuals with incomes over $88,000 and married
couples with joint incomes over $176,000, pay higher monthly premiums for
both Medicare Part B, which covers doctors’ fees and outpatient services, and
Medicare Part D prescription drug plans, than average income retirees.
High-income surcharges, known as income-related monthly adjustment amounts or
IRMAA, will be announced in November for coverage beginning Jan. 1.
The KFF report found that
only 8% of beneficiaries used hearing services, but close to half reported
having difficulty hearing. Similarly, 35% report using vision services and more
than one-third reported difficulty seeing. Dental services were the most widely
used, with 53% of beneficiaries reporting using dental services in the past
year.
But high out-of-pocket
costs can prevent beneficiaries from obtaining needed care. In 2019, 9.5
million beneficiaries — including 16% of traditional Medicare beneficiaries and
17% of Medicare Advantage enrollees — reported that there was a time in the
last year they could not get dental, hearing or vision care,
Among users of these
services, beneficiaries enrolled in Medicare Advantage plans spent less out of
pocket for dental and vision care than beneficiaries in traditional Medicare in
2018, but there was no difference between the two groups in spending on hearing
care. Both groups spent substantially more for dental and hearing services than
vision services.
For dental services, average out-of-pocket spending was $766 among beneficiaries in Medicare Advantage and $992 among beneficiaries in traditional Medicare. For vision services, average out-of-pocket spending was $194 among beneficiaries in Medicare Advantage and $242 among beneficiaries in traditional Medicare. Most Medicare Advantage enrollees had coverage for some dental, vision and hearing benefits, but still incurred out-of-pocket costs for these services.
Lower average out-of-pocket
spending among Medicare Advantage enrollees for dental and vision care is
likely due to several factors, the KFF report said. Most Medicare Advantage
enrollees have coverage for dental, hearing, and vision services through their
plan, which helps to improve the affordability of these services. Lower
out-of-pocket spending among Medicare Advantage enrollees may also be related
to lower overall income levels among these beneficiaries.
Previous KFF
analysis showed that average out-of-pocket spending on dental
care rises with income because higher-income beneficiaries are better able to
afford such expenses, not because they have greater dental needs. It is
possible that some traditional Medicare beneficiaries used more, or more
expensive, types of dental and vision care than those in Medicare Advantage,
contributing to their higher average out-of-pocket costs for these services,
the report said.
Lawmakers are considering
adding dental, hearing, and vision benefits to Medicare as part of the budget
reconciliation bill — a change that would be the largest expansion of Medicare
benefits since the Part D drug benefit was launched in 2006. These program
improvements would lead to higher federal spending of $358 billion over 10
years, according to the Congressional Budget Office, and likely to eventually
lead to even higher premiums for upper-income retirees.
(Questions about Social
Security rules? Find the answers in Mary Beth Franklin’s 2021 ebook at MaximizingSocialSecurityBenefits.com.)
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